Hope for refund dashed

"This is really a very elaborately thought-out plan," said Elisabeth Bruckmann, a lawyer with Parkdale Community Legal Services…"I think quite a number of employers have identified that new immigrants are a group of people who can be targeted with this kind of scheme."

The Toronto Star
July 29, 2007

Hope for refund dashed
Cleaners lose thousands as company operates under new name and authorities can't help
Rita Daly

Yoel_Artega.jpeg

Yoel Artega

Stored in a Toronto paralegal's office is an inactive court file containing letters from people pleading for help to get their money back.

They wrote the letters five years ago, in the summer of 2002, following the bankruptcy of a company called Countrywide Maintenance Services Inc., a Mississauga janitorial business. Nearly 100 unsecured creditors lost money, many having paid thousands of dollars for the promise of office-cleaning jobs in the Toronto area.

"Please help us," wrote one woman who, along with her husband, paid $4,000 plus GST to Countrywide. "We have two kids to feed, car, house to pay rent. The money we gave was borrowed on our Visa."

The couple waited four months for cleaning work when they suddenly got notice the company had gone bankrupt.

Angst turned to anger, however, when some noticed Countrywide continued to do business from the same office and run the same employment ad looking for cleaners. Its trademark company, Countrywide Gleam Masters Inc., took over management, while a new firm called Countrywide Maintenance Systems Inc. resumed operation.

Cleaners tried and failed to get federal and provincial authorities and police to investigate further.

Today, Countrywide continues to operate and still complaints persist. Since the bankruptcy, the operation has, in fact, expanded into a web of incorporated companies, much like a franchise. It attracts investors or so-called "partners" who pay $12,000 to start their own cleaning companies, and who, in turn, are supposed to find cleaners or "subcontractors" who also pay a fee, often thousands of dollars, for the promise of work.

But former partners and cleaners, many of them immigrants, contacted by the Star said they lost their investment and any hope of steady work promised in a contract signed with Countrywide. They, too, have not been able to get anyone to fully investigate, although the Better Business Bureau last month revoked the membership of several Countrywide companies.

"This is really a very elaborately thought-out plan," said Elisabeth Bruckmann, a lawyer with Parkdale Community Legal Services, which is filing claims on behalf of seven cleaners with the labour ministry and small claims court. "I think quite a number of employers have identified that new immigrants are a group of people who can be targeted with this kind of scheme."

No law seems able to protect them. Since the bankruptcy in 2002, people have complained to Ontario's consumer protection branch, labour relations board, Industry Canada, the Better Business Bureau and Toronto and Peel Region police. The typical response: go to court.

Many have done so. Countrywide companies have been sued at least 45 times in Brampton small claims court alone in the past five years. But few cleaners have been refunded their money.

Thomas Morrissey is founder and president of Countrywide Gleam Masters Inc. A real estate broker and former franchisor, he moved into the booming commercial cleaning sector in the late 1990s.

In an interview, Morrissey said it wasn't his company that went bankrupt five years ago, that he sold Countrywide Maintenance Services a licence to operate and that he was only a small shareholder. Incorporation documents list Morrissey as president, secretary and treasurer of Countrywide Maintenance Services in 2001, less than a year before the firm went bankrupt.

Morrissey attributed the bankruptcy to the bad management of others and said he takes no responsibility for the creditors' loss.

Based on federal bankruptcy laws, if a company goes bankrupt, a related company can take security of its assets until they are sold off. But as vulnerable investors with no bargaining power and little ability to assess Countrywide's risk or account for its assets, the cleaners found no one willing to police the law to see if they were being exploited.

The federal Bankruptcy and Insolvency Act provides for creditors to demand an accounting of a bankrupt firm's assets, but it means hiring a lawyer and going to civil court.

Toronto paralegal Paulette Gabrielle-Roy began researching Countrywide in 2002 after Alma Magno, one of the bankruptcy creditors, called her for help.

Magno had paid Countrywide a $1,070 fee in June 2001 – nearly a year before the bankruptcy – for the promise of $500 a month worth of cleaning jobs. She also put out $1,500 to rent a van for five months. She waited six months and when no jobs were offered she demanded a refund. Countrywide refused.

In March 2002, she won a judgment in small claims court for $2,670. A month later, Countrywide had the judgment set aside, saying the defendants weren't served properly. Then, suddenly, Magno got the bankruptcy notice.

Gabrielle-Roy helped Magno write other unsecured creditors with a view to proceeding with a class action. "Suddenly all these other cleaners came out of the closet with their stories," she said.

Together they wrote to government agencies, convinced some regulatory body ought to investigate further.

"I have a long list of people we contacted: the Ontario ministry of consumer and business services (now the Ministry of Government Services), the federal Competition Bureau, the fraud unit at Peel Regional Police. We contacted them all and wrote them nice letters," Gabrielle-Roy said.

"The response was always the same: There is nothing we can do, there's nothing we're going to do, there's nothing that can be done."

Then Morrissey filed a $290,000 defamation lawsuit against her client and suddenly Magno disappeared. The Star also tried to locate her without success. "She was just terrified," said Gabrielle-Roy. "She went broke and had to live with one brother and one cousin."

Some creditors sued Countrywide on their own after the bankruptcy, hoping the courts would at least listen. Yoel Arteaga said the experience was a bitter and costly lesson.

He was 21 at the time, just married and recently arrived from Ecuador when he paid $8,560 to Countrywide in January 2002. He signed a $13,000 contract that promised a refund if no cleaning jobs were offered within 120 days.

He took out a loan, even bought a used car for the job. When no jobs came and he demanded a refund, he was refused.

Suddenly in May, he got notice of the bankruptcy and then a call from Countrywide asking him to sign a new contract with another company if he didn't want to lose his money. Again he waited 120 days and received nothing. "I was so angry," he said. "And I got so scared, so scared. It almost cost me my marriage."

Morrissey couldn't explain why cleaners like Arteaga still received no work after signing a new contract, but said at least they didn't have to pay another fee when Countrywide Gleam Masters took over management.

"(Gleam Masters) didn't have to, but it just accepted them and didn't charge them," he said.

Arteaga said he tried many times to get someone to investigate.

"You have no idea how many times I went to the cops. I went to a government regulator and told them everything and all I got was, ‘We’ll look into it.' They never got back to me."

He took Countrywide to small claims court in 2003, but lost.

"The judge said I couldn't do anything because the company went bankrupt. He told me to forget about my money and just move on.

The cleaners
A Brampton small claims court judge dealt a significant blow to Thomas Morrissey three weeks ago when he ruled Countrywide's president was "personally liable" for Premkumar Seenivasagam and Yogeswary Premkumar's loss of $9,630 paid in 2005 for unfulfilled cleaning jobs, plus interest and court costs.

In his ruling, Justice Ian Latimer said Morrissey "negligently misrepresented" the way his group of companies operates, noting the husband is an immigrant who has difficulty with English. However, the Thornhill couple didn't have a chance to celebrate.

Four days ago, Morrissey served them notice he is appealing the decision. The couple initially sued and won judgment last year against a "partner," who later told the court that Morrissey had their money. The couple then filed the second claim against Morrissey in July 2006. As parents collectively working three jobs to put three children through university, Premkumar said they no longer want to fight Countrywide.

They spent close to $2,000 on legal fees already and are still paying off the debt.

"We don't have time any more to take off work and go and hear (the case)," she said. "We're very stressed."

The cleaner
In November 2001, Sonia Bakalova was working as a cleaner but needed a second job. She saw an ad and went for an interview where she paid $5,000 to Countrywide for the promise of cleaning work.

Months later, she still had no jobs.

"They were nice talking, like you can make this kind of money in this month. I believed," she said of the initial interview.

Suddenly in May 2002 the company went bankrupt and the mood in Countrywide's office changed.

"They said, ‘You can’t do anything. Who cares? I don't care. You lost the money.'"

But she noticed Countrywide still ran ads offering jobs. She was told new people had taken over the business and was asked to sign another contract. She still received no work or any explanation. Bakalova, 46, doesn't believe anyone is willing to investigate.

"I don't have money to sue them or go somewhere to talk. I'm an immigrant here."

The partner
Milka Tegovski said she could smell something was wrong a few months after she gave $12,000 to become a partner with Countrywide in 2005. Tegovski, 56, paid the money with her credit card and never saw it again.

She says she got nothing for the money and tried to find jobs for a cleaner without success. "The way (Thomas Morrissey) talked it was like a piece of cake. You were just going to get out there and it would be so easy."

Countrywide withdrew about $500 a month in administrative fees from her company's account, on top of 10 to 30 per cent commission from cleaners' fees. Although "president" of her own company, Tegovski said she could not even withdraw money from her company account. After three months she wanted out, but was told she had to pay $2,000 for a new partner to take responsibility for her cleaner, plus $3,000 in penalty fees. She is still paying off the debt.


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