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The Molson Coors brewery in Montreal. Molson Coors Canada has accused its former director of sales, Frank Ivankovic, of orchestrating ‘a complex scheme’ to defraud the company of millions of dollars.Ryan Remiorz/The Canadian Press
Brewing giant Molson Coors Canada TPX-B-T has uncovered an alleged embezzlement scheme that led to losses totalling at least $9-million since 2021, court documents show.
The details of the scheme were revealed in a lawsuit filed with the Ontario Superior Court of Justice on Wednesday, against two former Molson Coors employees, as well as some of its vendors and business partners – including the Firkin Hospitality Group president.
The lawsuit accuses Molson Coors Canada’s former director of sales, Frank Ivankovic, of orchestrating “a complex scheme to defraud the company of many millions of dollars over many years,” by approving fraudulent invoices to two companies that then made secret payments back to Mr. Ivankovic and his wife.
Those two firms – a numbered company in Ontario associated with a Firkin pub, and a company called Letz Go Consulting Inc. – are controlled by Firkin Group president Larry Isaacs and his wife Ellen Bacher. They shared in the proceeds of the fraud, according to the Molson Coors statement of claim.
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The lawsuit claims that Mr. Ivankovic also enlisted two other former employees to join the scheme, including national sales account manager Michael Conforti – who allegedly issued fraudulent purchase orders to those companies, and also received secret payments in return – as well as another unnamed individual.
The alleged scheme was confined to the Canadian operations of the multinational beer maker, according to the court records.
None of the allegations have been tested in court.
The Molson Coors investigation is continuing. The lawsuit alleges that Mr. Ivankovic, for example, received 63 secret payments totalling more than $3.6-million, which represented half of the amount invoiced to Molson Coors Canada by Letz Go.
Both Mr. Ivankovic and Mr. Conforti resigned from the company in October, while they were under investigation, according to the lawsuit. The men “destroyed or withheld” relevant data during the investigation, and discovery (a legal process in which parties to a case exchange information and evidence) which is necessary “to reveal the full extent of the fraudulent scheme or schemes,” according to court documents.
Ms. Bacher was in charge of creating invoices that appeared legitimate – in one case invoicing the company falsely for “event planning” – at the direction of Mr. Ivankovic and Mr. Isaacs, the lawsuit alleges.
Molson Coors discovered the alleged fraud recently, when it uncovered an exchange that Mr. Ivankovic had with his bank using his company e-mail.
The correspondence showed that Mr. Ivankovic had received more than $276,000 from Letz Go and the numbered company, and the bank inquired as to the source of the funds. Mr. Ivankovic then texted his accountant asking about how to respond to the bank. The accountant advised him to tell the bank to go away, using a profanity, according to the court document.
In further investigations, Molson Coors discovered a spreadsheet in Mr. Ivankovic’s e-mail that it alleges kept track of the fraudulent payments.
The lawsuit alleges that Letz Go bank records show it has no expenses or operations consistent with the services it says it provided to Molson Coors on the invoices. They also show that virtually all of the company’s receipts come from Molson Canada. Many of those invoices cited services relating to the Firkin Group.
Other payments were directed to K.O. Consulting and Marketing Inc., a company controlled by Mr. Ivankovic’s wife, Kelly O’Brien-Ivankovic, according to the lawsuit. The invoices said that Ms. O’Brien-Ivankovic, who is a chiropractor, had provided event management services to Molson Coors.
Some of the payments were also directed to the Mississauga Golf and Country Club for Mr. Ivankovic’s membership there, according to the court document.
Niklas Holmberg, a lawyer for Ms. Bacher and Mr. Isaacs, wrote in an e-mail to The Globe on Wednesday that his clients “strenuously deny the allegations made by Molson Coors Canada and will respond to those allegations in the court.”
None of the other defendants could immediately be reached for comment.
The company is seeking the return of the money received by the defendants, punitive damages and further damages for violations including fraud, conspiracy, breach of employment terms and unjust enrichment, plus legal costs. The total amount of damages is yet to be determined. It is also seeking an injunction preventing the defendants from transferring or dispersing any assets or cash until a further order from the court.
The company informed its employees in Canada of the alleged scheme in a memo sent on Wednesday afternoon.
“Needless to say, we are deeply disappointed by having to take this step regarding two long-tenured employees and others we trusted as business partners,” Molson Coors Canada president Chantalle Butler wrote in the internal memo, which was obtained by The Globe and Mail. “We intend to pursue all available avenues to recover the stolen funds.”
