Waterloo-based gun wholesaler accused of alleged $48-million fraud

Firearms wholesaler accused of fraud From CTV Kitchener's Krista Simpson: A Waterloo firearms wholesaler has been accused of an alleged multi-million dollar fraud.

WATERLOO — Waterloo firearms seller Trigger Wholesale, Inc. is facing allegations that it is millions of dollars in debt, and that its directors and officers were behind what its creditor calls “a massive fraud.”

Trigger is an importer/exporter and wholesale distributer of firearms that it says works with federally licensed dealers, retailers, law enforcement and government and military agencies across Canada.

A screenshot from Trigger's website

ClearFlow Commercial Finance Corp. had been providing financing to Trigger since 2015 and alleges it was owed more than $48.6 million as of October 6, 2020 by the firearms dealer.

A screenshot from Trigger's website showing available shotguns

In civil court documents filed in October, ClearFlow claims there is “evidence from different and independent sources” supporting a “long-standing, organized pattern of fraud” that came to its attention recently, following an investigation.

ClearFlow says Mark and Jaimee Lynn Gdak, identified as the directors and officers of Trigger Wholesale Inc., orchestrated the alleged fraud.

The allegations include falsified invoices, falsified purchase orders, forged property documents, forged cheques, and verbal and email impersonations of executives at Canadian Tire and Home Hardware.

The civil court documents indicate that ClearFlow believes the Gdaks did this “in order to induce Clearflow to advance tens of millions of dollars to Trigger.”

In October, ClearFlow applied to the Ontario Superior Court of Justice Commercial List—a team of judges who have experience in managing complex commercial litigation—requesting a receiver be appointed over the assets of Trigger Wholesale Inc. and its guarantors, including the Gdaks and the En Cadre Group Inc., whose directors are also Mark and Jaimee Lynn Gdak.

The judges appointed Grant Thornton Limited as receiver of Trigger Wholesale Inc. and En Cadre, as well as Jaimak Real Properties Inc., which is owned by Jaimee Lynn Gdak and holds real estate in Waterloo and Huron County.

ClearFlow alleges “there is good reason to believe that the title to these properties has been placed in the names of Jaimee and Jaimak in an effort to shield assets from the reach of ClearFlow and other creditors in the event that the fraudulent scheme was discovered.”

In the application to the court, ClearFlow provided a number of examples of what it claims are falsified invoices and cheques as evidence of the alleged fraud.

In an affidavit, Glenn Petersen, a Clearflow director and partner, compares a Home Hardware purchase order, obtained from a third party not connected to Trigger, with one he believes Mark Gdak forged.

Home Hardware purchase order from Clearflow Commercial Finance Corp. documents

According to Petersen’s affidavit, the latter included three spelling errors, and was missing details such as delivery method, routing information, UPC codes for products being ordered and the store and vendor numbers.

In a separate affidavit, ClearFlow’s Director of Operations Alexandra Kanichis says Gdak provided photocopies of cheques from Canadian Tire and Home Hardware, that were allegedly deposited into Trigger’s bank account in July and August 2020.

Kanichis says the cheques were “obviously suspicious,” with the bottoms cut off in photocopies so that account numbers were not visible. She also says the name of a Canadian Tire executive was misspelled, they included an “attention of” line that is not normal for business cheques, and there were no stamps on the front.

Grant Thornton’s initial report says it found uncashed cheques at Trigger Wholesale Inc. with the names of three different banks that all had the same background and font. It also found boxes of cheque stock paper in the Gdaks’ office.

In court documents, ClearFlow claims false email addresses were provided by Gdak for executives at Canadian Tire and Home Hardware, and there were verbal and email impersonations of these executives.

A screenshot of emails logged into email accounts from Clearflow Commercial Finance Corp. documents

In its report, Grant Thornton says it found emails requesting a Trigger employee set up new domains and email addresses, and laptop computers found in the office belonging to Mark and Jaimee Lynn Gdak were logged in to those email accounts.

A screenshot of emails logged into email accounts from Clearflow Commercial Finance Corp. documents

“It would appear that Mr. Gdak and/or Mrs. Gdak were using these computers to impersonate Canadian Tire and Home Hardware employees," the report states.

A Home Hardware spokesperson tells CTV News that the company has never been involved with Trigger Wholesale. A Canadian Tire spokesperson declined to comment, citing the ongoing litigation, to which it is not a party.

ClearFlow also says it was provided with what it claims was a forged transfer of real property, making it look like En Cadre owned a property on Martin Grove Road in Waterloo. ClearFlow says its investigation revealed the property is not owned by any company related to Trigger Wholesale Inc.

ClearFlow claims Mark Gdak told the company he was selling the property and putting some of the proceeds towards debt repayment.  ClearFlow says it believes the real property agreement of purchase and sale was falsified, and that the purchasers named in it do not exist.

The Grant Thornton report also says Trigger told ClearFlow in September 2020 it had approximately $6 million in inventory at its secure facility at 588 Colby Dr. in Waterloo.

The Grant Thornton report says when investigators went to the property, they found numerous boxes of rusted handguns as well as numerous boxes of rifles that appeared to be new, estimating the value of the inventory is “significantly less” than $6 million.

Grant Thornton says it will require a more extensive investigation to understand what happened to Clearflow’s cash advances and the use of those funds.

According to Trigger’s website, it is “the fastest growing company in the Canadian Industry.”

A screenshot from Trigger's website

“We have been in business for 10-years (2019),” it says. “We are centrally located and have extensive offices, staff, property and holdings to serve our customers as a Stocking Distributor.”

“We carry a global selection of brands to meet the needs of outdoor lifestyle enthusiasts for all of their unique requirements whether it is Olympic Target Shooting, Competition, Hunting or protecting our streets and borders as a First Responder.”

A list of products available from Trigger's website

Because ClearFlow applied to have Trigger Wholesale Inc. placed in receivership immediately, without notice to Trigger, it was required to include facts or arguments the company and the Gdaks could make if they were given the chance to respond.

As part of that, the affidavit from Martin Rees, who identifies himself as the main contact person at Clearflow in respect to the Trigger account, lists Trigger’s high visibility in the industry and real firearms warehouse, which he has personally visited.

Additionally, Rees states there is no direct evidence Mark Gdak has personally benefitted from the alleged fraud and no obvious motive. ClearFlow also notes that as a firearms seller, Trigger would have undergone extensive background checks by various regulatory authorities.

Mark Gdak and his lawyers declined to comment to CTV Kitchener on the allegations as did Jaimee Lynn Gdak and her lawyer. In an affidavit, Jaimee Lynn Gdak said she is no longer a guarantor of Trigger, and denies knowing of or taking part in the fraudulent activities alleged by ClearFlow.

None of the allegations have been proven in court.