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Saskatoon News

Fraud trial begins in Saskatoon

Hundreds of investors out several million dollars
Reported by Bryn Levy
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A Saskatoon woman is on trial for fraud after hundreds of people lost money invested in Marathon Leasing Corp., a car leasing company that went bankrupt back in 2008.

Danielle Fast-Carlsson's trial got underway Monday at Saskatoon Court of Queen's Bench with the Crown calling forensic accounting expert Doug Kalesnikoff.

Kalesnikoff went over a report he helped put together for the RCMP covering Marathon's finances through fiscal years 2006-2008.

He painted a picture of a troubled company, which he described as "insolvent," with liabilities exceeding assets in each of the three years looked at.

Kalesnikoff then outlined how he thought the company's 'pro forma' sheets given to potential investors didn't reflect the financial reality of the company.

He then testified that what little profit there was on things like sales of vehicles after they came back from being leased or sales of stock bought using company funds were often paid out in commissions or consulting fees to other companies related to Marathon or to Fast family members.

Kalesnikoff said the enterprise followed the classic Ponzi scheme model. Investors kept getting their interest payments, often as high as 12 per cent. That led many to invest more money, or to recruit friends and family to put their cash into the company.

However, Kalesnikoff said the payments weren't actually coming from revenue being generated by Marathon, rather, he charged that previous investors' interest was being paid from the principals put in by new investors.

He said that by 2008, the interest Marathon owed to investors was equivalent to about eight times the company's total revenue.

Kalesnikoff said that his investigation for the RCMP also found that Fast-Carlsson, a certified general accountant, was the one reviewing Marathon's books, rather than an independant accounting firm.

Fast-Carlsson's father, Ron Fast, was president of Marathon. He was due to go on trial Monday as well, but in a move that came as a surprise to prosecutors, he pleaded guilty to fraud, possessing proceeds of crime and making false statements before those proceedings could get started. Fast cited poor health and worries that he might not live through a trial as reasons for his plea.

Fast-Carlsson's trial is expected to continue past Christmas.

blevy@rawlco.com

Follow on Twitter: @BrynLevy