Home renovation deposits used to cover gambling debts, lawsuit alleges
|Toronto Star 08 Sep 2017 at 12:53|
When GarCon Building Group went bankrupt more than two years ago, Karim Hajee was one of several homeowners who collectively lost more than a million dollars in deposits on home renovation work.
Court documents filed last week allege that the money — which hasn’t been returned — went partly toward the company owner’s personal expenses, including gambling debt, and bills for his former Toronto home.
“Just that realization that ‘Wow, I trusted someone and now a big chunk of my finances are gone’ — that was devastating,” Hajee said in an interview Thursday with the Star.
Eight families, including Hajee and his wife, launched a lawsuit in June 2015, against Adam Gardin, his wife Naomi and GarCon, collectively seeking $1.5 million in damages, plus $500,000 in punitive damages and their legal costs.
They accused Gardin, who now lives in Michigan, of fraud, theft, conversion, breach of contract and unjust enrichment. None of their allegations have been proven in court.
In a statement of defence from August 2015, Gardin denied wrongdoing, saying that increased costs forced GarCon to file for bankruptcy, that the company used advanced funds to pay for the work on the plaintiff’s homes, and that he acted in good faith.
Last week, the plaintiffs filed new court documentsthrough their lawyer Ryan Wozniak, which included bank records they argue show “Adam and Naomi used the plaintiffs’ deposits to pay myriad personal expenses.”
“Adam requested large deposits from the plaintiffs at a time when GarCon was hemorrhaging cash and on the brink of financial collapse,” a portion of the motion reads.
They also allege that those expenses included hefty gambling debts. The bank records show $95,617.04 of credit card expenses incurred at Caesar’s Palace Windsor and Fallsview Casino between December 2013 and December 2014.
The Star contacted Gardin asking him to respond to detailed allegations contained within the Aug. 31 motion. He declined to respond to the specific allegations, but emailed the following statement:
“GarCon, the company I started from nothing in 2004, has now been closed for over two years now. Over this time, my family has suffered immensely by the closure of the company, and the subsequent negative media I have gotten, as well as the legal matters I am currently dealing with. Although I am deeply saddened by what has happened to the clients of GarCon, my main focus right now is my family and my health. I hope that we will all be able to put this behind us soon.”
Wozniak declined to comment on this story.
Hajee, his wife and four kids, now live in the home he hired GarCon to renovate back in 2015, but it’s taken a long time to get to that point. Even now the interior of his home isn’t completely finished, nor is his driveway.
“Our home still isn’t completed because we’ve run out of funds,” he said.
He said he paid GarCon $155,909 in deposits but the work was not completed; his home was only ever gutted, and a big hole was dug in the backyard before GarCon went bankrupt.
He hopes homeowners see what he went through as a cautionary tale.
“There’s no clear protection for you, the homeowner, once you pay the contractor any amount,” he said.