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Tuesday, January 22, 2019

How a font helped reveal a multi-million dollar fraud

Lawyers involved in wills litigation are used to having to prove or disprove the validity of documents. For example, handwritten wills are challenged as to whether they were really written by the deceased person. While the examination of written signatures is not going to go away any time soon, there is now a new tool to help courts determine the validity of documents: fonts.

In the case of Re: McGoey, a brand new case out of Ontario bankruptcy court, there was a question of whether trust documents were backdated or fraudulently dated. The facts are complicated, but boil down to whether Gerald McGoey, a telecommunications CEO and millionaire, had hidden assets from creditors. McGoey had transferred assets including a farm and a Muskoka cottage into trusts which he said were created in 1995 and 2004. The dates were important because things later went bad for Mr. McGoey. He was sued for breach of fiduciary duty arising from his role as CEO and board member. In 2017, the court found him liable for $5,565,696, plus $200,000 for legal fees. He then filed for bankruptcy. The trusts were being challenged on the basis that they were fraudulent transfers set up intentionally to keep assets out of the hands of creditors. To read the facts of the case in more detail, click here.

The parties challenging the trust documents called a typography expert. He said that the 1995 document had been prepared using a font called Cambria and the 2001 document used a font called Calibri, neither of which was available to the public until 2007. Therefore the documents could not have been created when McGoey said they were.

While the use of these fonts was not enough on its own to convince the court that the documents were fraudulently back-dated, it was certainly taken into consideration as part of the evidence.

It's inevitable that as we rely more and more on technology, methods of keeping up with fraudulent use of technology will evolve. This is the first time, to my knowledge, that a case in Canada has involved the use of fonts to bust a fraudulent trust, but it has been done in other places around the world.

They say the devil is in the details. It certainly was for Mr. McGoey.

2 comments:

  1. I've always wondered how to tell if a Will is real. My lawyer had it stapled into a bit of a booklet, but of course there is nothing illegal about printing on plain paper.

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    Replies
    1. Hi Wilson.
      As photocopiers and scanners get better, it's harder to tell copies from originals. Sometimes it's a matter of seeing that actual signatures leave a bit of an indent in the page.

      You're right that there's nothing illegal about printing on plain paper. When I first started out, all wills were done on legal-size onionskin paper, stapled to a heavy paper backer, and folded into an envelope. We used to order boxes of "will paper" from the supplier. These days, most of that dressing-up of the will is not done anymore. Most wills are printed on regular photocopy paper, though most lawyers will use a border around each page.

      Lynne

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