Gold, greed and lies at the Cordova mine

Jordan This is a story about gold and greed, and lies, three things that are often found together. The gold allegedly was in a mine called Cordova, a little bit northeast of Peterborough, Ontario. The greed was understandable. Everyone dreams of a tiny investment, bringing them a windfall in return, especially people with little in the way of retirement savings and a small nest egg that needs to get much, much bigger. The lies, the lies were everywhere, although there’s some dispute about which were technically lies, and which were questions that never got asked, or advice that nobody got. But in the end, it didn’t matter, because the money was gone, and the gold never existed. The only question left was if anyone who had offered up their life savings would ever get it back.

Jordan I’m Jordan Heath Rawlings. This is the big story. Grant LaFleche is a member of the Torstar investigations team. Hello, Grant.

Grant LaFleche Hey, how you doing?

Jordan I’m doing well. Why don’t you start by just answering a simple question Who are the Mori’s?

Grant LaFleche So the Mori’s are, I want to say well-known family in the Niagara region. They’re mostly well known for the garden center that they ran in Niagara on the Lake on highway 55. It was sort of an upscale garden center. A lot of people didn’t just get flowers there you would get you know, the trees and the verge or whatever you wanted to plant in your backyard or front yard or something. So that’s how most people know the name. The family patriarch, a gentleman by the name of Leno Mori is known in certain business circles. He’s a very wealthy person, he sort of rubbed shoulders with the wealthy winery owners and wine producers of Niagara region, even if he’s not even if people in the public don’t know Leno by name, or any of his children. They certainly know the garden center. It has been a fixture for over 50 years in Niagra.

Jordan So that’s the family now, who is Alex Christoff, and we’ll use him as an example. I know that this story contains more than 100 Alex Christoff’s, really, but But how did he come to be involved with the Mori’s, and who is he?

Grant LaFleche So Alex Christoff, was the late Alex Christoff was a Niagra resident, right. As a young man, he was involved in a hunting accident up north in northern Ontario. He had really hurt his back evidently, according to his nephew trying to drag a moose back to camp after he had shot it which, if you know the size of a moose and the attempt to move such an animal, you can imagine the back injury.

Jordan Yeah,

Grant LaFleche And it really was It was bad. He never really found any pain relief for it his whole life and if you leap ahead to his 70s. This is 2001. He meets through a mutual friend, a woman named Bonnie Mori, she is the wife of one of Leno Mori’s kids, a gentleman by the name of Richard. And Bonnie presents herself as an alternative medicine practitioner. And Alex, he goes to meet Bonnie at her clinic in her home in Niagara on the Lake, effectively looking for pain relief, he’s looking for someone who can get this phantom knife out of his spine so he can live his twilight years, pain-free if possible, and that’s where his relationship with the Mori’s begins.

Jordan So first of all, did he find any pain relief and how did the relationship develop after that?

Grant LaFleche He did. He did not ultimately, he visited her quite often. He spent hundreds and hundreds of dollars on treatments and herbs and supplements and you know, kind of the New Age alternative healing stuff for which there may be dubious efficacy. But he did become quite close with Bonnie they became friends. She would bring food to his home or groceries or dinner to his home. She even invited him at one point to join the family vacation in Florida. So while the healing aspect of her visits to her, ultimately went nowhere and didn’t provide him with any pain relief. Mr.Christoff certainly found a new friend in both her and the Mori family.

Jordan And how did the Mori family approach that new friendship and I’m speaking specifically here about the opportunity that Alex was presented with because that’s really where this whole thing picks up speed.

Grant LaFleche Absolutely. So at one point, while he’s visiting her at her clinic for more of these treatments that as we know didn’t provide any pain relief. She says to him, in effect, you know, Alex I’ve got a great opportunity for you because she knew by this point that Alex had some money put aside that he may want to invest and she brings him down the hall to meet her husband, Richard, who then presents the golden opportunity, which is for him to invest in Richards gold mine company called Gold Insight Resources. And he promises a huge return on an investment, he says, Look, you have to invest now because we’re about to hit the stock exchange. Once we do, the value of these stocks in the shares in this gold mine company is going to go through the roof. He says they have a gold mine in a place called Cordova, which is farther north in Ontario. And so now they say to Mr.Christoff, now is the time to invest and he trusts them. He has been a friend and patient of Bonnie for some time, he knows the Mori name, just like many people in Niagra do. And he knows Leno’s reputation as a wealthy businessman, so he decides to invest some $22,000 with the Mori’s with Richard in this Goldmine venture, and even convinces his nephew Rick to pitch in $4,000 of his own money.

Jordan At the time this opportunity was presented. Did he also see any evidence any gold taken from the mind any evidence this was a working mine, or that there were working mines owned by this company?

Grant LaFleche No. And to be fair to Mr. Christoff and other investors in a gold insight. I don’t think he ever looked. He was operating solely on two things. He was operating his trust in Bonnie, his friend. And he was operating on believing the story that Richard Mori is telling that he has this gold mine that this you know that this will earn him and his investor is just a ungodly amount of money. So he, he didn’t do any of his own research. And it’s, I guess, key to understand here, Jordan, that although Alex Christoff had in the past, his nephew says, you know, had some small investments in different aspects of the stock market, he had no experience in mining, he had no experience in securities, really. So he really is placing his trust in people when he’s giving them their money, as opposed to, you know, a journalist or some other experience doing a bunch of due diligence to figure out you know, exactly what this company may or may not be.

Jordan Okay, so you’re a journalist, you’ve done due diligence. This is a lengthy and in-depth investigation, maybe just explained to us of all the things you just described that Alex and folks like him were told and promised, what do we know now about how much of that was true and how much wasn’t?

Grant LaFleche Yeah, I mean, broad strokes, you can say virtually none of it was true. There as we said in our investigation, in the Toronto Star, every claim that Richard made about his gold mine, it touched on reality it abutted reality a little bit. So for instance, the gold mine in Cordova there is a town north of Peterborough called Cordova it’s a wee little place and there is a goldmine there. What Mr.Christoff and the other investors that Richard Mori found, what they did not know was that that gold mine hadn’t produced a single ounce of gold since before the end of World War Two, okay, that the land is contaminated. The gold mine was shut down in 1940. The tunnels are flooded the mine office, I went and visited the place the mind office is filled with bats. So if somebody does go up there, please don’t stick your head in a window. And it’s being crushed by vines and vegetation in the forests up there. The the mine, the mine entrance is completely blocked off with giant piles of this blackened stone, which were probably leftover excavation from the original digging of the mind tunnels back in the 19th century. None of Richard Mori’s investors knew this. And they were just going on trust. I mean, I’m not even sure that Richard Mori himself actually even visited the site. Although he certainly knew that there was no gold being produced there. He was able to convince people like Mr.Christoff to invest with him, because he could tell the story really well. And they believed him because of it.

Jordan We’ve alluded a few times here already to Alex and others like him, what is the scale of this investment? How many others are we talking about and what kind of money?

Grant LaFleche In total, we were able to confirm that there were 188 investors who gave money to Richard Mori, either directly for his gold mine company, or and we can talk about this in a bit. This kaleidoscope of shell companies that he also created at around the same time to keep bringing in investor money. Those 188 people invested over $2 million with Mr. Mori none of them saw so much as a dime in terms of return on their investment. And, and again, I just need to stress that none of these people for the most part were experienced investors they didn’t know about the stock market, right? They didn’t even know you know, to pay 100 bucks to go get a financial investment advisor for a couple of hours and say, what does this look like to you? So, you know, at the end, a lot of them were seniors. I mean, the one thing we haven’t mentioned about Mr Christoff is that he he died in his 90s still trying to get his money back from Richard Mori. And there were a couple of other cases of investors who sought to get money from him that they were owed. And they ended up dying in their mid to late 90s. Still looking for justice.

Jordan You mentioned a minute ago, that we could talk about shell companies. What are they? Why were their shell companies? And what purpose did they serve? For Mr. Mori?

Grant LaFleche So a shell company, for your listeners who are unfamiliar, the basic way to describe it is it is literally an empty shell. It is a company that will have a name, it’ll have a president, it could be a numbered company. But the key thing is it has no assets whatsoever. It makes no money. It is simply exist as a vehicle through which to move funds, but it in itself does and produces nothing. For Mr. Mori, he very quickly this scam begins in 2001. But he very quickly runs into a problem. And that problem is the Ontario Securities Act. It’s the legislation that governs how companies can sell shares and sell securities in Ontario. If you have a privately traded company under the law in Ontario, you can have no more than 50 shareholders. Now that 50 shareholders may be giant investors, and you will see private companies with this few investors who can you know, give you 10s of 1000s, hundreds of 1000s millions of dollars. In Mr mores case, he’s getting $500 $5,000 $10,000, right. But he runs, he hits that 50% limit quite quickly.

Grant LaFleche He needs to keep this is how he’s generating money. Well, he can’t just sell more shares and gold inside anymore because he’s hit 50. So the first thing he does after that is he creates three shell companies, again, companies that don’t own anything, but the gold inside company, the real one may not be making any money. And it may not be mining gold, but it does own land, at the very least it owns the Cordova property, right. These shell companies are named they have similar names, their gold insight 2003, gold insight, 2004 and gold insight 2005. And he proceeds to find investors to give him money for shares in these companies. But he’s pitching it as though it’s the original company that again, well, maybe worthless does own land, the investors don’t know the difference, they in fact, at that point, have no way to know the difference. So the shell companies were ultimately a vehicle for him to continue running this scheme, where he thought would ever wiki would not run afoul of the Ontario Securities Act and his governing body, the Ontario Securities Commission. And that allowed him to keep this scam running for more than a decade.

Jordan How did the scam run for so long? I mean, just based on what you told me about what Mr. Christophe was told, you know, this is a company pitch, just like it’s about to go public. It’s about to be really hot. There’s about to be an IPO, et cetera. So at what point over the decade, do the chickens come home to roost and people realize this company is doing nothing?

Grant LaFleche It turns to the first part of your question is how did he keep it running for so long, there were a couple of ways in which he operated that essentially prevented the left hand from knowing what the right hand was doing. So if you were investor in the original Gold insight, you wouldn’t necessarily know about the existence of the shell companies, you had no idea this was happening. There were other shell companies he created, there was a diamond mined version of it that he created. And he had these other dubious ventures, including at one point, saying he owned a perfume company that was going to sell something called Niagara mist that somehow smelled like the mist off Niagara Falls, which I don’t know if anybody wants to smell like the mist off Niagara Falls. But that’s what he tried to say.

Jordan Sure

Grant LaFleche Going so far as to claiming that former Niagara-based supermodel Linda Evangelista was going to market it all of which was false. The other way he kept it running was internally in gold insight. So the accountant who was also managed the books, he actually there were there were transactions happening and money moving around that he would not be told about until well after the fact. So there was nobody internally even who knew what was going on. And for a long time, the board of directors of gold insight, were essentially just his family and friends and his lawyer, all of whom, you know, for a long time, we’re not going to drop a dime on him. So he always had a way to kind of throw up smoke around parts of the scheme so that nobody got a clearer picture of it. And it didn’t start to fall apart for Him until you get into about 2017 and there’s a couple of new investors who ended up taking a hard look at what where their money is going. And once they began to pull on the thread, the entire tapestry begins to become on woven. But it took more than a decade for, for enough people, only a couple really, to start taking a hard look at what was going on and saying, Wait, this doesn’t make any sense. And the inciting event of the downfall of the entire scheme was a lawsuit filed by a family that had invested in total more than $350,000 with Richard Mori. And that lawsuit made the Board of Directors nervous. It prompted other people in the company to start saying, Yeah, wait a minute, like, where is this money going? These promises that Richard are making aren’t making sense. And so that’s really the beginning of the end it even at that point, it would take a little bit of time before the whole thing collapsed.

Jordan What have you been able to find out about because this part fascinates me about who else in the company, knew what was going on or suspected something funny was going on? And kind of let it slide you just mentioned there were members of his family, but also that the board of directors would be nervous over a lawsuit. So I guess I’m trying to get a sense of how much of this is like, not a pyramid scheme, I guess. But how much of this is kind of an organized scheme? And how much of it is just Mr. Mori, duping people on both sides?

Grant LaFleche Well, certainly, although she denies it, when we talked to her, Bonnie Mori was a central piece of the way in which this scheme operated. A number of investors were coming to Richard through her and her clinic. she presented herself as a doctor, for instance, well, she has no higher education whatsoever. Nevermind being a PhD or an MD of anything. But she earned people’s trust, introduce them to Richard and they went on. We did interview lino Richard’s father. And he essentially just says, Well, yes, this entire thing was a money losing venture. But I kept giving Richard money and covering his costs for lawsuits when they came up and propping him up and giving him huge mortgages and things. Because Richard asked for it. So Leno was certainly aware that parts of this were happening.

Grant LaFleche And his lawyer, the late Joe sequin, who was a board member for a long time, he was aware, however, before he died in 2020, he penned an affidavit almost a deathbed statement, that got notarized saying, in effect, I told Richard not to do this. And he ignored me and went ahead and did it anyway.I told him it was against the law, and he ignored me. And there’s this interesting moment when I’m interviewing Richard Mori, and he’s saying this before I told him, I have the affidavit. And he blames the shell company scheme on Joe’s will Joe, my lawyer told me to do this. So if there was something wrong with it, it’s the lawyers fault until I read him the affidavit. And Mr. Mori really doesn’t have an answer for that. The board members who ultimately rebelled, which included his lawyer, Joe Seguin. That didn’t happen until the this large lawsuit dropped and they felt you know, what, Richard is now become a liability. If we’re ever going to make this company work, he can’t be around anymore. And they essentially forced him out. But and this will sort of give you an indication of how much the family is overall involved in what this scheme was. They owned most of the shares in both the real gold inside company and in the shell companies. And so Leno used his majority shareholder position to force an emergency meeting to have Richard restored to his position as company president. And it takes like almost another full year before new board members are able to really dig deep enough to expose the scheme and push Richard out for good.

Jordan What happens when this all gets exposed? You know, we’ve mentioned a lawsuit. I am not I am the furthest thing from a legal expert, it feels like there might be some illegal activity going on here. Is there any criminal investigation happening?

Grant LaFleche So here’s the part of the story that frustrates the board members who were the the whistleblowers in this entire thing. And they’re the ones who initially had uncovered the existence of the shell companies and how much money was being moved through them, etc. They went to the Ontario Securities Commission, which again, is the regulator that’s supposed to protect Ontario citizens from schemes like this. And they brought the documentation they had at the time and said, look at us, you know, more than 180 people have been taken. We think it’s, you know, the dollar values into the millions you should investigate. The answer from that Ontario Securities Commission was we’re not going to investigate, because under the Act, there was a statute of limitations of six years from the from when the alleged offense began, which in this case would have been 2001. And they didn’t get the information they had until 2017 2018. Long after that six year limit, so they they the Securities Commission has declined to investigate. And although board members have brought these issues to both the Ontario Provincial Police and the Niagara Regional Police, they also have not pursued an investigation, which really does leave most of the former shareholders in gold insight, sort of holding an empty bag, there are a couple of families who sued and got payouts. But for most of them, most of that 188 people, their money’s gone forever. And this includes, by the way, Jordan, and it’s one of the sadder stories, a family in Windsor, who there was a gentleman who was a GM worker who remortgaged his home, in order to get $50,000 to invest in gold insight. And when the whole thing fell apart, the GM worker had died, his widow who was stuck raising their children, because she lost her husband had asked for her money back and she was ignored by Mr. Mori. So this entire thing leaves in its wake victims who have lost in some cases, all of their savings, and there doesn’t seem to be a mechanism through which they’re going to be able to recoup any of it

Jordan That was going to be one of my last questions is, is there any fight still going on? have most of these people abandon the idea of ever getting their money back and, you know, are they gonna get away with it not to put words in your mouth.

Grant LaFleche So there’s, there’s, to my knowledge, there’s only one current lawsuit still active, and the investors who launched it, have told me that they may just have to give up because Leno Richards father is bankrolling his son, they’re able to extend this out in court for quite some time, you know, making motions and other things. They basically can outspend other people, and so that this family has launched this lawsuit, they can’t afford to proceed any further with the court action. And they’re considering dropping it to your point, most of the others have just given up trying to find a way to get money back, they either can’t afford a lawyer or they don’t know what avenue to pursue. And without the Ontario Securities Commission, investigating this, to use the act to bring some degree of justice to this case, there may be no way for them to do it there. And even Leno Mori Richard’s father, said to us in an interview, that his son is broke, his son has never made $1 in his life. And he said to us, and I quote, he can’t even afford a goddamn cup of coffee. So how is he going to pay people back? So, I mean, Richard Mori, we found doesn’t even own his own home, he’s leasing it in Niagara Falls, he’s never owned, you know, anything of real value, that we’re not even sure where most of that money disappeared to have that $2 million collected over that span of time out there, most of it is unaccounted for, we don’t know where it went. So to answer your question, in a short word, the answer is no. There doesn’t seem to be an avenue for people to get their money back and most have given up trying.

Jordan Last question, and it’s about the big picture. You know, Richard Mori is one thing. And you know, we know there’s stuff like this, that happens sadly, often to seniors. What did you realize while reporting this story about the bigger picture of shell companies and regulations and securities in Ontario, that allowed this to happen? Is there something fundamentally different that could have been in place that would have created a mechanism that could have stopped this or protected these people?

Grant LaFleche It’s hard to know if you could create a mechanism that could have started the scheme in its infancy. However, certainly, if there are more stringent reporting requirements, that companies even privately held companies have to produce to the Ontario Securities Commission, that would have been a red flag immediately, because once you take a hard look at the books as we did, it immediately start stops making sense. And you can see how the Mori family in many instances are when there was money in the in the kitty, they would just take most of it for themselves. So they were profiting, the investors were left with nothing. I think the other thing is, and I don’t know if this is a regulatory issue, but it is kind of a buyer beware morality tale, which is don’t give your money to anybody until you’ve checked them out. If it sounds too good to be true, don’t do it. And I know that sounds very cliched, but when you look at the number of times in, you know, this entire scheme, the number of times people were taken by promises that you and I or you know, maybe a sophisticated investment person or an investigative journalist or something would immediately look at and go No way that’s crazy. Most people does not where their headspace is at because that’s not how they think that’s not their day to day. And they’re living hand to mouth and they’re being promised with, you know, turning over what little money they have, will secure their future and their kids future forever.

Grant LaFleche I don’t know what the answer is there, Jordan, but there certainly needs to be a way to better inform the public and better protect them from being taken by schemes like this. And finally, that six-year statute of limitations in the Ontario Securities Act probably needs to go before because that limit that limits your ability to investigate historic crimes. I mean, if you look at something more ghastly, like the sexual crimes of Catholic priests that date back decades, well, we can still the criminal justice system can still pursue them decades after the fact. But in Ontario as a white-collar security’s potential securities crime, there’s not even an investigation to determine if a charge can be laid, because of a statute of limitations. And that is a real roadblock for the victims of a scheme like this one.

Jordan Grant, thank you so much for taking the time today. And thanks for your work on a story like this. I think sometimes these kinds of things don’t seem as important as a global pandemic. But when you think about the 72-year-old folks who are losing their life savings, they absolutely are.

Grant LaFleche Absolutely thank you for your time. Jordan, appreciate your interest.

Jordan Investigative reporter, Grant LaFleche, that was the big story. For more from us, head to thebigstorypodcast.caFind us on Twitter @TheBigStoryFPN and talk to us anytime via email,thebigstorypodcast@rci.rogers.com [click here!] You can listen to us in any podcast player. And of course, if you have a smart speaker, just ask it to play the big story podcast. If you’re in Canada, you’ll get us if you happen to be in India, you will get their version of the big story, which is strikingly similar to ours, even though we came out first. Stefanie Phillips is the lead producer of the big story. Joseph Fish and Braden Alexander are our associate producers. And I’m Jordan Heath Rawlings. Have a great weekend. Stay safe. We’ll talk Monday