Holoday jailed on new allegations

McNeely said it would be hard for the public to believe Holoday would not commit another crime if the court allowed him to remain free in view of the litany of bounced cheques.

The Toronto Star
February 8, 2001

Holoday jailed on new allegations
Ex-broker’s bail revoked on fresh cheque complaints
Tony Van Alphen

Convicted broker Michael Holoday, who left Bay Street and a trail of misery behind him in 1994, has landed in jail - and in more trouble.

Madam Justice Patricia German supported a crown request yesterday to place Holoday in custody rather than allow him to remain free until sentencing Feb. 28 for defrauding more than 20 clients and two brokerages.

Furthermore, Toronto police confirmed in the Superior Court of Justice that they will charge him with fraud again in a subsequent incident involving a bank.

The move came after the judge heard startling testimony about the possible defrauding of the Hong Kong Bank of Canada in 1998 and a print shop recently.

Toronto police Detective Jeff Thomson testified that in the most recent incident, Holoday bounced cheques paying for the production of legal briefs for use at his trial.

Outside the court, Thomson noted the alleged incident, if proven, left the judge and the court in the unusual position of holding property obtained from a crime.

The judge quickly rejected arguments by Holoday's lawyer that he is not a violent criminal, poses no flight risk and can better prepare arguments for his sentencing outside jail.

“I am going to revoke Mr. Holoday's bail,” Justice German said immediately after hearing submissions. “The circumstances have changed considerably since the trial.”

German added Holoday's actions damaged the Canadian securities industry, which relies on trust. Holoday raised doubts about that trust, she said.

“A lot of people have been hurt,” she said. “Everbody has been a victim. It has to be taken very seriously by the court.”

Wearing a stylish gray suit, Holoday appeared subdued as a police officer handcuffed the former high-living broker and led him off to jail while his wife sobbed only a few metres away.

The judge, who convicted the 36-year-old ex-broker of fraud on Monday, had allowed him to remain free until she heard the crown's request to revoke his bail on grounds he had breached its conditions.

A lawyer for the former Hong Kong Bank of Canada testified Holoday had engaged in cheque kiting in 1998 after the earlier charges were laid, leaving it with a debt of more than $25,000. Cheque kiting occurs when delays in the banking system are used to commit fraud.

In Holoday's case, lawyer Jeffrey Hoffman, who represented the Hong Kong Bank, said Holoday wrote cheques between the bank and National Trust with no money to cover them in an effort to gain credit.

Hoffman said the bank, now HSBC Bank Canada, had reached a settlement for Holoday to repay the money, but had been unable to collect.

Thomson revealed police will soon charge Holoday with fraud in connection with that incident. They informed Holoday about the pending charge late yesterday.

German found Holoday guilty after a 41-day trial of defrauding more than 20 clients, Midland Walwyn Inc. and First Marathon Securities from 1992 to 1994. He faces up to 10 years in prison on each of 14 counts of fraud, plus a possible fine and restitution order.

Toronto police, who charged him in 1997, have described the fraud as one of the largest involving an individual broker in Canadian history. Clients suffered more than $22 million in losses in trading and other dealings with Holoday, according to the police.

Evidence showed the smooth-talking Holoday conducted unauthorized trades, issued phony reports to clients, covered their losses, borrowed from them, lied to brokerages and participated in forgery.

The victims included his mother-in-law, the father of the best man at his wedding, a television producer, an elderly couple, a retired radio actor and the president of a brokerage holding company.

A forensic accounting report for Elaine Roberts, president of Fahnestock Viner Holdings Inc, indicated her family lost at least $7.8 million (U.S.) in dealings with Holoday and concluded he also engaged in cheque kiting.

At yesterday's bail hearing, Thomson told the court his investigation showed Holoday wrote cheques to cover more than $2,000 in printing costs for his legal briefs at the trial.

However, Thomson said Holoday did not have funds in his bank account to cover the cheques and they bounced. The former broker then replaced them with postdated cheques last month, Thomson added.

He said the first new cheque bounced last week. But a print shop employee testified the cheque finally cleared on Monday when he passed it again.

Crown lawyer Brian McNeely added in his submission that Holoday also left a process server, who notifies witnesses, with a bounced cheque during the trial.

“If anybody should take pains to make sure cheques don't bounce, it would be Mr. Holoday,” McNeely said.

McNeely said it would be hard for the public to believe Holoday would not commit another crime if the court allowed him to remain free in view of the litany of bounced cheques.

In her remarks, the judge said if Holoday needs assistance in preparing sentencing submissions, he can apply for legal aid.

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