MONTREAL - Quebec provincial police issued arrest warrants alleging a $120-million fraud was masterminded by a co-founder and a former executive at Cinar, the scandal-ridden animation company that produced such popular children's cartoons as Arthur and Caillou.
Police said Wednesday they have arrested former Cinar chief financial officer Hasanain Panju, 58, and are looking for company co-founder Ronald A. Weinberg, 59, following a seven-year investigation. The pair is allegedly linked to two Montreal investment firms at the centre of two of Canada's biggest investment scams.
Executives at the now-defunct investment funds are also sought by police. John Xanthoudakis, 52, was president of the Norshield Financial Group and Lino Pasquale Matteo, 44, was president of Mount Real.
All four men face 36 counts of fraud and filing a false prospectus.
The allegations mirror claims that Cinar's board made in 2000 when Weinberg and his now-deceased wife and co-founder Micheline Charest were ousted from the company.
"Ronald Weinberg and Hasanain Panju (allegedly) invested in portfolios ... without permission from the board of directors of Cinar with the aim of enriching themselves personally," provincial police said in a statement on Wednesday.
"John Xanthoudakis allowed them to invest in the Bahamas while Lino Matteo helped (Xanthoudakis) hide the true nature of the investments."
The fraud is alleged to have taken place between 1998 and 2000.
Cinar was acquired by The Cookie Jar Company in 2004 and immediately assumed the name of the Toronto-based children's entertainment producer.
Cinar gained international renown in the 1990s for producing non-violent children's programming, but the company later became mired in accounting and tax scandals.
Weinberg and Charest were later fined $1 million each as part of a settlement with Quebec's financial watchdog, the AMF, although they did not admit guilt.
Charest died in 2004 while undergoing plastic surgery in Montreal.
Weinberg is accused of doing business through the Norshield fund, once valued at $1 billion but later found to have been artificially inflated. The fund collapsed in 2005 when clients tried to withdraw their money. A total of 1,900 investors lost $159 million.
Mount Real, the second fund linked to Weinberg, was terminated by the AMF in 2005 after defrauding 1,600 clients of $130 million.
Provincial police say investigators met with more than 50 witnesses, including Cinar employees and staff with the company's former auditor, Ernst & Young.
Police also met witnesses in the Bahamas, where they executed search warrants.
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