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OTTAWA — During nearly two decades as an industrial plumber, Jean Richer had never experienced anything quite like it. In early January 2008, a couple of cheques for work he’d done on projects managed by Ottawa’s ICI Construction had bounced. Richer, the owner of Elite Mechanical, was puzzled. He’d worked with ICI’s founder Roland Eid long enough to consider him a good credit risk. The Lebanese-born entrepreneur always paid his bills before they came due.
So, on Jan. 9, Richer hopped into his pickup and drove to ICI’s office building in the Cyrville Industrial Park in Ottawa’s east end to see what was going on. The doors were locked but he could see inside. Stacks of paper files littered the reception desk and several men in suits were rifling through filing cabinets in the adjoining offices. They ignored his knocks.
Richer drove around to the back of the building. There he saw a 45-gallon oil drum apparently being used as an incinerator. He phoned an ICI contact and demanded to know what was going on. The ICI official told him Eid had left for Lebanon with his family over Christmas and that the office was closed for a cleanup.
Later the same day, however, the same employee faxed Richer copies of bonding documents related to one of the construction projects on which Richer had been working. The bonds were a kind of guarantee of payment pending completion of the work. Several years later, Richer would learn that representatives of ICI’s bonding company, Trisura, had been at ICI’s offices for a day or two prior to his impromptu visit.
At the time, however, he didn’t know what to make of it all. ICI had been doing work for the federal government — a renovation for Foreign Affairs at its Lester B. Pearson Building headquarters, the construction of a new facility for the RCMP at Shirley’s Bay in the city’s west end, among others. Richer knew the government forwarded progress payments regularly to ICI’s financier and posed zero credit risk. Yet, in the space of a couple of weeks, everything seemed to have unwound.
Richer knew Eid had been travelling back and forth from Lebanon where he had reportedly been helping in that country’s reconstruction effort. Unbeknownst to Richer, Eid had told ICI employees he had a contract from the Syrian government and he would soon be in position to transfer significant money into ICI’s account in Ottawa.
But the idea that Eid had sold the company came as a complete shock to nearly everyone associated with ICI.
As Richer drove away that day, he had a sinking feeling. It was an accurate premonition: his life was about to get a whole lot worse.
***
On Monday of this week, Roland and Marlene Eid sat together in Courtroom No. 9 in the basement of Ottawa’s main courthouse. The room was nearly empty. No friends or relatives were on hand to lend support, an unusual omission for a large Lebanese family like Eid’s.
The couple was married in 2006 — Roland’s second, her first — and now have two children. There was good news this day for Marlene: the Crown was withdrawing fraud charges against her in connection with ICI’s 2008 bankruptcy.
Yet it was Roland who seemed most relieved, even though prosecutors affirmed they were still pursuing a fraud case against him, with a trial date to be set early in June. “Ninety per cent of the weight is off my back,� he said later, “knowing that Marlene will be free to look after the children.�
Marlene worries about Roland, and about his impetuous outbursts against those in government who he believes have contributed to his present situation.
The indignities are many. Although he is permitted under his bail conditions to try to seek a living, less than a handful of his former colleagues in the building trades seems willing to take a risk in hiring him for odd jobs. He and Marlene are nearly broke. They are living in a modest apartment block in the east end of the city and get around town in cars lent to them by Roland’s brothers. Marlene earns money several days a week as a dental assistant.
Eid’s mobility is also restricted. He surrendered his passport last year to the RCMP, which has had him under surveillance. He was unable to attend the funeral in Lebanon of his father, Elias Eid, who died the day after Roland’s court appearance. He isn’t sure he would have gone anyway. He’s persona non grata in Lebanon as well.
***
The bankruptcy of ICI Construction on Jan. 30, 2008 — and the fraud charges that eventually emerged — stunned Ottawa’s business community.
It wasn’t just the speed of the company’s collapse or the size of its debts. There was also the revelation that the Eids had been quietly arranging to sell their firm while planning a move to their native Lebanon. On Nov. 30, 2007, the couple had initialled an agreement to sell ICI to the company’s controller, Sebastien Dagenais. The price was $3 million. (Marlene was listed as the owner of ICI but Eid was its driving force, as he acknowledged in court.)
Ordinarily a sale such as this wouldn’t be a big deal. ICI was a well-established government contractor with multiple building projects in the works. There was little technical risk with any of the projects and the federal government was writing most of the cheques.
But something went terribly wrong in the weeks around Christmas 2007, when Roland’s purported secret life as an informant for the Canadian Security Intelligence Service, Canada’s spy agency, came into play. On Christmas Day, Roland, Marlene and three children — including two from Roland’s first marriage — boarded Olympic Airways flight 424 from Montreal to Athens, en route to Beirut. They were taking what was billed as a holiday with a return trip to Ottawa scheduled Jan. 3 to wrap up unfinished business.
Only the two children from his first marriage would return soon to Ottawa — and this, only after Eid’s ex-wife threatened to charge him with kidnapping. Eid says his children had wanted to stay an extra week.The issue was resolved after the children returned later that month.
Eid had decided in September 2007 it was time to return to his roots, but it was not being done for sentimental reasons. He said his epiphany came after he received a long-distance phone call from a representative of Hezbollah, the Shia Islamic group that controls much of Lebanon. Eid says he was told that Hezbollah knew about his CSIS ties and that his parents in Lebanon missed him.
Eid understood the code: he had to return home where Hezbollah could keep an eye on him — or his parents would be in danger. That, he says, is why he was in such a hurry to get his affairs wrapped up in Ottawa.
Eid was suffering the consequences of choices he made a long time ago.
***
Roland Eid was 13 when the Israelis stormed north in a 1982 assault aimed at clearing out the Palestine Liberation Organization led by Yasser Arafat. His father, Elias, was a successful businessman who made a living drilling water wells throughout the Middle East.
The family was Christian Maronite, which made it a minority in the south of Lebanon where Muslims dominated. Parts of the Christian community allied themselves with the invaders — and would pay dearly when the Israelis left.
Roland Eid is the youngest in a family of four boys and five girls, and something of a rebel. George, the eldest, is a doctor specializing in internal medicine and the only one of the male Eids who stayed in Lebanon. Jean emigrated to Canada in the 1970s and became a hair stylist — he is now a part owner of the swish Rinaldo’s franchise. Eid, the fourth child, studied engineering in Paris and in the early 1990s acquired some fame as the chief technology officer of Corel Corp., the graphics software company launched by Michael Cowpland.
Lebanon had endured a bloody civil war since the mid-1970s. “I did not have a normal childhood,� Roland says simply, without self-pity. He was in his early teens when the Israelis pulled out of south Lebanon and the Christian community came under attack by the Muslim majority and Hezbollah, which was then just emerging as a potent force. The Eids moved from their home south of Sidon to the capital, Beirut.
Jean by then was established in Ottawa, and began to sponsor Roland and other family members as immigrants. By 1987, Eid was attending Ottawa’s St. Patrick’s High School. “Life here was normal,� he says. “Too normal.�
Unlike his well-educated siblings, Roland lacked the patience for college. He entered the building trades as a labourer, working with a variety of local builders including Garvey Construction and Westeinde Construction. Gradually he learned the art of assembling teams of specialists to bid on contracts and moved out on his own as a general contractor.
Eid was charming, full of energy and something of a party animal. Still, he craved more excitement. This, he says, is why he reached out in the late 1990s to CSIS, offering to be an informant. In part it was political — he had not forgiven Hezbollah for some of its actions in the 1980s — but he was also just restless. Roland started with small assignments — making donations to local Lebanese charities, for example, so CSIS could track the money trail.
But he says his real work for CSIS began in 2006, soon after he founded ICI Construction. That’s the year Israel launched another invasion into south Lebanon, this time to root out Hezbollah strongholds. When the Israelis withdrew later the same year, Lebanon was in dire need of reconstruction. Roland offered his assistance, travelling back and forth between Ottawa and Beirut many times. He says he was the eyes and ears of CSIS on the ground. He also developed friendly ties with Hezbollah officials.
An RCMP synopsis of the case involving ICI Construction, prepared in the summer of 2008, characterizes Roland’s activity as a “scheme� in which he led his employees to believe that if the firm could generate a $2-million bank balance in Lebanon, the Syrian government would match it.
“Eid would then transfer the $2 million back to ICI’s Canadian account,� the synopsis reads. That was to have occurred in the first week of January 2008.
Eid maintains his primary goal was something else altogether. He says he was tasked by an international intelligence agency — presumably either Israel’s Mossad or the Central Intelligence Agency — to take on a mission involving those Hezbollah officials.
Eid says eventually refused. He believes Hezbollah found out about the mission — though perhaps not its particulars — and that this is why he received a call warning about his family.
He was now between two worlds. Eid says he told Hezbollah he would return to Lebanon but that he needed a few months to wrap up his affairs in Ottawa.
***
When he left Ottawa that Christmas Day in 2007, he believed he was close to doing so for good. The Eids had sold their house, and the sale of ICI Construction to Sebastien Dagenais seemed a done deal. But there were some loose ends — most notably, the condition that Dagenais arrange financing for the $3-million purchase price.
It was a rather large hurdle, even though the building industry was still booming. Dagenais could have borrowed $3 million against ICI’s future profits and purchased the Eids’ entire equity at once. Instead, the Eids were paid directly out of ICI’s own bank account, which severely crimped the company’s cash reserves.
Records from Caisse Populaire Rideau d’Ottawa show that ICI transferred $1.7 million to Roland Eid’s personal account in Saida, Lebanon in separate transactions on Dec. 19 and 21. A key question at Eid’s future fraud trial will revolve around who owned ICI at the time of these transactions. The bankruptcy trustee, Kevin McCart, said he could find no evidence of a final sale agreement. The Citizen has a copy of the Nov. 30 deal that was conditional upon financing.
If the deal was never finalized, this meant Roland was shifting money from ICI to himself — not necessarily illegal, depending on the structure and particulars of the deal. But in the process he weakened his firm’s financial cushion. He maintains that when he left late in 2007, ICI had sufficient cash to pay for ongoing construction — with the prospect of further government cheques as work progressed.
However, these payments would be made to ICI’s financier, Acorn Partners, not to ICI directly. Acorn was an Ottawa-based outfit that supplied financing using ICI’s receivables as collateral. Acorn advanced money to ICI at a discount to the value of the receivables. This meant ICI gave up any claim on the receivables in question but in the bargain gained cash for funding the various projects.
On Dec. 21, 2007, Acorn transferred $1.2 million to ICI. It had earlier loaned ICI $500,000. This was the money that moved to the Eids’ personal account in Lebanon. Eid maintains it was partial payment for the agreement already struck involving the sale of ICI.
Nevertheless, someone at ICI — it’s not clear who — told Acorn on Jan. 2 that it needed $50,000 to cover the company’s payroll. This request came the same day the federal government rejected a progress payment for $234,000 worth of work done by ICI on the RCMP project at Shirley’s Bay.
Acorn wasn’t particularly bothered by the hoisted payment. The federal government frequently held back money for even small variations in how its contracts were proceeding. What concerned Acorn was ICI’s vulnerability to such a minor, and foreseeable, glitch. ICI’s working capital should have been much healthier. When an Acorn official tried to certify a cheque on Jan. 8 at ICI’s bank, the Caisse Populaire, panic set in.
Acorn’s senior account manager Andy Chen, who had been handling the ICI file, went straight to the ICI building. There he discovered officials from Trisura, the firm that posted performance bonds on work done by ICI. Chen learned ICI was headed for bankruptcy. The financial debacle would cost Trisura more than $3 million, including $1.5 million for money owed to tradesmen for labour and material on the projects covered by a good bond.
***
It was the next day, Jan. 9, that plumber Jean Richer stopped by ICI to see for himself why his own cheques had bounced.
Neither Acorn nor Richer fared well out of this mess. Acorn sued ICI’s bank for transferring the money to Eid in Lebanon and tried unsuccessfully to recover its money from the federal government’s outstanding invoices on the ICI projects. In turn, Acorn was sued by two of its investors. A 2011 judgment in Ontario’s Superior Court found in favour of the investors, but Acorn had been too badly damaged. Early this year, the financing firm folded.
Richer, who had been expecting to receive more than $200,000 for his already-completed work on multiple projects, descended rapidly into a pit of despair. He was stunned to discover that some of the bonds he thought had insured his projects were non-performing, useless for collecting money owed to him. The Canada Revenue Agency was unsympathetic to Richer’s pleas for leniency. Before the year ended, the CRA had begun garnishing his wages and his firm’s receivables (money owed by his suppliers). Richer’s marriage broke down and he later declared personal bankruptcy.
The panic attacks have subsided and he has reconstituted his plumbing business under the name of Elite Plumbing Services. Throughout the past few years, he has remained in touch with Roland Eid by email, probing, trying to understand the source of the pain he has endured.
What bothered Richer in particular was Eid’s seeming unwillingness to help him and dozens of other suppliers who had been hurt by the bankruptcy of ICI. The fact Eid spent hundreds of thousands of dollars to produce a film about Lebanese saint Charbel didn’t help.
“Roland talks about suing the government when this is all over and then repaying us,� says Richer.
Richer was as surprised as everyone else when the Eids arrived back in Ottawa in March 2012. He would have been shocked to learn the reason.
According to Eid, it was at the behest of Hezbollah, whose officials had interrogated him for many hours about the assignment he was supposed to have done in 2007. After the session, which he says involved “psychological, not physical torture,� Hezbollah gave him a couple of days to leave the country.
The RCMP charged Roland and Marlene Eid with fraud last June in connection with the ICI bankruptcy. Brother Eid stumped up $150,000 in bail money. Then Jean stepped in leaving Eid off the hook for the money.
Now that the spectre of criminal charges has been lifted from Marlene, it is Eid who must confront the courts. Barring extraordinary assistance from his siblings, it’s not clear how he can afford it. Legal Aid Ontario has denied him legal assistance, in part because he is part of a well-to-do family. Eid is currently pursuing a Rowbotham application which could compel the state on Charter of Rights grounds to pay for his upcoming legal bills.
Judging by the list of 15 witnesses the Crown intends to call — most were associates who handled ICI’s money — the case will focus on how Eid operated as a businessman and entrepreneur. Whether he also played a role as a CSIS informant may or may not turn out to be relevant. Certainly Crown attorney Moray Welch says the question has no bearing on how he intends to make his case.
But if Eid’s claims about serving as a CSIS informant are true, it won’t be just ICI’s former suppliers and financiers who will be keeping watch on the court’s deliberations — assuming a deal isn’t cut to avoid the need for a trial.
jbagnall@ottawacitizen.com
Article source: http://www.ottawacitizen.com/business/Deep+secret+life+construction+entrepreneur+Roland/8401082/story.html
