The investigation
The board retained some corporation records and they got some more from
Channel. The board then spent hundreds of hours piecing together
what
happened to their money and where did it go. What they found was
disturbing.
Bylaw #10
There was a complete set of documents showing that the board passed a
resolution changing the five-year term on the $1.5 million loan to a
ten-year loan. The board members read the notice that was sent to the
unit owners and the detailed minutes of the April 2006 Special Owners
Meeting.
However, there was no board meeting resolution and no owners meeting.
All these documents and signatures were forgeries.
Couldn’t find the
$120,000
When the condo took out the loan, the board and management put out a
leaflet saying that the owners have an option of paying a lump sum of
$8,575.
At the Special Owners Meeting, the Maxium representative said:
“If an
owner chooses to pay for his own special assessment, Maxium will
accommodate his. Therefore after a phase of a project has been
completed, the individual unit owner can pay the special assessment by
sending the cheque directly to Maxium.”
Fourteen owners paid a lump sum of approximately $8,575 each. Where
this money went is unknown. Maxium did not receive it and when Don
Snider asked the auditor, he did not respond. The board did not see it
in the financial statements.
Separate chequing
account
Unknown to the board, Manzoor Khan opened a separate chequing account
in the corporation’s name. The board has evidence that one cheque for
$2,500 was deposited in that account and the money disappeared.
It is unknown if there were any others.
Mr. 50%
Quebec’s construction inquiry heard that Montreal city official, Gilles
Surprenant, was called Mr. 1% for the percentage of city contracts he
took for himself and that the Montreal mafia was content with 2.5%.
There are ministers in the Nigerian government who are called Mr. 10%
and one of the president’s of Pakistan has been called Mr. 15% but all
of them are small time operators compare to Manzoor Khan.
The board was digging deep. Don Snider took Kahn’s invoice for the tile
purchase to Olympia Tile and managed to see the original invoice. Once
they were compared, it was obvious that Khan’s invoice was a forgery.
The
invoice that Manzoor submitted to the corporation
Manzoor billed the corporation for more than double the price he paid
for the tiles. It is interesting that he used the name of a company
that has not been mentioned since; “Manzoor Moorshed Khan Ltd.” From
the size of the markup, it must have been an incredibly profitable
company. It is also interesting that Khan paid for the order in cash.
The actual invoice from Olympia Tile.
As an aside, if discounts of 40% and 50% are available to contractors,
which seems unlikely, then there must be a huge profit margin on ceramic tiles.
Utility supplier
Manzoor talked the board into changing electrical suppliers stating
that the change would save them money. The contract called for a fixed
rate for the price of the electricity but not for all charges.
There is documented evidence that Channel was receiving a commission
from the supplier and that he illegally kept that money instead of
paying it to the corporation. It is known that he transferred several
other condo corporations that he managed from their existing suppliers
to the same electrical provider.
When the board canceled the contract, they received a $9,140.50 rebate
covering the difference in charges that Manzoor’s supplier charged
compared to what a local supplier was billing the condo. It appears
that the condo was overcharged $47,221.30 for the length of the
contract.
Canali Engineering
Group Ltd
This “company” submitted invoices to Maxium for $81,482.20. It is
unknown what this company—discovered in 2010 to be a shell company
owned by Manzoor—did in return for this payment.
Building permit
When the emergency diesel generator needed to be replaced, due to a
flood, Manzoor did not get a building permit authorizing the
installation of the replacement nor did he have it inspected.
Liability insurance
By the terms of the their contract, Channel was required to have a
minimum of $1,000,000 liability insurance. Manzoor ignored the board’s
requests that he show proof that his company carried the required
liability insurance.
Poor workmanship
The board had two third-party engineering companies conduct studies on
the tile installation. Both studies concluded that the workmanship did
not meet industry standards.
The floor expansion joints. Notice the cracked tile.
The laying of the floor tiles by the general contractor and/or the
subcontractors did not make allowances for the building’s expansion
joints. The tiles were laid over the expansion joints so the tiles were
crushed when the building expanded and contracted.
Where
the floor tiles meet an existing wall tiles. These wall tiles should
have been replaced as part of the contract.
In the corners some of the tiles were not neatly trimmed. The floor is
not even so the tile edges were not flush. This problem was exasperated
by Manzoor ordering 1’ by 2’ tiles instead of the 1’ by 1’ tiles that
were authorized by the board and were the samples that were bought
prior to the start of the project. The tiles were also laid length-wise
along the hallways. Besides being a most unimaginative layout, this
made the uneven floor more obvious.
Some of the mortar had started to dry before the tiles were laid and
the substrates were not properly prepared.
The wall tile was installed using a spot mortar method and had
insufficient adhesive to sufficiently bond the tiles to the walls. That
is why some of the tiles cracked and fell to the floor.
A large gap under the bottom wall tile.
Some of the new paint on the doors started to peel. The contractor
should have repaired this.
A spot where the paint peeled off a door.
Inferior materials
The elevator cabs were refurbished with cheap laminate sheets for the
walls and plain linoleum floor tiles. The refurbished cabs did not
match the quality of the materials that were removed.
The cheap floor tiles in a renovated elevator cab
I had a tour of the property and these elevator cabs were the dreariest
looking ones I ever saw in a residential building.
Carpeting
Manzoor had the marble flooring removed from in front of the elevators
and the garbage rooms on all the floors and replaced with carpet. This
was so unwise that the condo later removed the carpet and laid tile
where they once had marble.
There are three grades of carpet; residential, commercial and
hotel-hospitality. Manzoor had hotel-grade carpet replaced with
commercial carpet. It is a violation of the Act to use lower quality
materials during repairs and renovations than what is being replaced.
Fire
code violations
Manzoor lied when he said that the elevator cabs didn't meet the fire
code. The city's Notice of Violation dealt with missing written records
for the regular fire alarm testing and a few minor issues. The
elevators were not listed.
Uttering forged
documents
The board and their new law firm found 23 incidents where Manzoor
forged signatures on corporation documents. He forged board minutes,
resolutions, invoices and all required documentation to have Bylaw #10
registered.
Maxium
The loan was set up as a line of credit with a maximum withdraws of
$500,000 a year over three years. Yet the new board discovered that
$1.3 million was withdrawn in less than a year and it appears that
Manzoor was floating the idea of taking out a second loan for a further
million dollars.
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