Leinwand is -- and has been -- involved with several other companies where he has worked alongside his father-in-law. . .Leonard Rosenberg. Anyone recognize Gemini Financial or Value Holdings?
If you think Leinwand is a master of the shell game, look Leonard Rosenberg up on sunbiz.org.
It was nothing compared to the fraud he was caught pulling in Canada that cost shareholders over $131 million.
It's been almost 25 years since the great Toronto apartment flips, a scandal that still ranks as one of the costliest in Canadian history. It all started with the sale of 10,931 apartment units in November, 1982. Leonard Rosenberg's company, Greymac Credit Corp., had bought the apartments from Cadillac Fairview Corp. Ltd. for $270 million. He and his partners immediately flipped them, twice, for roughly $500 million.
The purchase was to be financed, in part, by loans from Crown Trust, Seaway Trust and Greymac Trust, which the partners also controlled. Regulators worried about the solvency of the trust companies and tenants were aghast at Rosenberg's plan to jack up rents by 25%. Two months after the sales, the Ontario government seized the trust companies, and police delved into allegations that the sale prices had been artificially boosted.
After more than a decade of investigations, inquiries and preliminary hearings, Rosenberg pleaded guilty in April, 1993, to 13 counts of fraud. Crown prosecutors said the fraud cost investors more than $131 million.
Rosenberg spent barely a year of his five-year sentence in jail. He was granted full parole on Oct. 31, 1994. Parole board records show he faced a contraband charge while inside that was later dismissed. Some prison officials opposed his parole, arguing in documents that they had seen an increase in fraudulent behaviour by Rosenberg and a lack of respect for rules "similar to that toward defrauded institutions." In fact, his case-management team "strongly opposed" his release on day parole. But the parole board decided that he showed remorse.
After his release, Rosenberg returned to Miami, where he and his wife, Renée, had a mansion. He dabbled in a few businesses and became a consultant to a company run by his daughter Alison, Value Holdings Ltd. It held investments in a number of companies, including a few lumber businesses in Canada, but ran out of money in 2001.
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