Allegations of financial irregularities and bribery circulate around a local businessman, which can lead to potential disaster for a Manitoba First Nation and a possible fundraising hole for Assiniboine Park Conservancy.
An Ontario Securities Commission investigation has raised serious concerns over the business connections of 53-year-old Sean McCoshen, who in recent years has pocketed millions of dollars in fees negotiating massive loans for the First Nations.
Through his Manitoba-based Usand Group, McCoshen negotiated loans of at least $ 122 million for the Peguis First Nation with Bridging Finance Inc., a Toronto-based company recently placed in receivership for financial irregularities.
BFI requested full reimbursement from Peguis by June 30.
At two high-profile events in Winnipeg in 2018 and 2019, McCoshen pledged to donate a total of $ 3 million to the Assiniboine Park Conservancy to help fund the construction of “The Leaf” building in the new Diversity. Gardens.
It is still unclear whether McCoshen has followed through on the donations.
An attempt to reach McCoshen – who has not been seen in public since the allegations first came to light about two months ago – through one of his companies, Alaska-Alberta Railway Development Corp., did not complete by Friday’s deadline.
The allegations against McCoshen were first reported by the Globe and Mail.
Born in Nova Scotia, McCoshen grew up in Winnipeg and began his business career in the city in the late 1990s. After graduating from the University of Western Ontario with a law degree, he was called to the bar of Manitoba in 1996, but did not practice in the province.
His first business venture appears to have been in the fashion industry, with the Winnipeg-based clothing company Brawd Inc., founded in 1996. Years later, he ran an entity called Trans Global International Commodities Solutions Inc. , also based in Winnipeg.
Both companies ultimately went bankrupt.
Most recently, McCoshen founded AARDC, which seeks to build a railroad from Fort McMurray, Alberta, to Alaska. In recent years, much of her work has focused on loan brokerage for First Nations, including several communities in Manitoba.
On April 30, Bridging Finance Inc. – an entity related to many of McCoshen’s business ventures – was placed in receivership, following an investigation by the Ontario Securities Commission that reported evidence of financial irregularities and bribes.
In recent days, McCoshen’s railroad company (also BFI’s biggest borrower) has announced its intention to file for protection against its creditors.
Peguis First Nation – according to various documents obtained by the Free press – is currently heavily in debt owing to loans negotiated by the Winnipeg businessman.
The relationship between Peguis and McCoshen dates back to at least 2012. In the summer of 2017, Peguis (located some 190 kilometers north of Winnipeg) was facing a housing crisis and was looking to develop employment opportunities for its members.
Peguis hired Usand Group to offer him loans on a paid model. He linked the First Nation to BFI, resulting in three financial deals worth over $ 37 million.
In total, Usand Group received more than $ 7 million in fees.
However, under an existing financial arrangement with the Bank of Montreal, Peguis was not allowed to incur additional debt at that time. As a result of the agreement between Peguis and BFI, BMO requested full reimbursement.
McCoshen then got Peguis to borrow millions more from BFI – at a considerably high interest rate – so she could pay BMO back. At a minimum, the Manitoba community of approximately 10,000 people has borrowed $ 122 million from BFI in recent years.
According to a March 2021 report from Chief Peguis Investment Corp., the community is currently in debt of $ 135 million.
Chef Peguis, Glenn Hudson, did not respond to multiple requests for comment before Friday’s deadline.
On May 17, Peguis Chief and Council sent a letter to band members briefing them on the situation with BFI. Earlier this year, BFI set June 30 as the loan repayment deadline.
“The chief and council realized that BFI was not interested in the advancement of the community or the direct needs of our people,” said the letter obtained by the Free press.
Band member and former Canadian Senator Murray Sinclair has been hired by the First Nation to lead a team that will investigate the financial relationship and negotiate with BFI.
“The Chief and Council realized that BFI was not interested in the advancement of the community or the direct needs of our people. – Letter to the members of the Peguis group
“The team… creates a plan to ensure that the community is no longer working with a lender who refuses to allow the advancement of the community and ensures that the First Nation only has lending relationships that are not not excessive and excessive in fees, ”the letter states.
Alan Park, managing director of Chief Peguis Investment Corp., which manages investments on behalf of the community, told the Free press that BFI threw a lifeline to Peguis in 2017, when it provided quick financing after the First Nation violated the terms of its loan with BMO.
Park said the vast majority of First Nations borrowers are trustworthy clients, who adhere to the terms of their financial agreements. In the rare cases they don’t, he said, it’s often because they’ve received bad advice from strangers who don’t have the best interests of the community at heart.
“These First Nations groups and peoples are honorable. They pay their bills. They pay their loans. You still have your bad apples, but it happens in loans, ”Park said.
“Where they often have problems is when they get advice from outside consultants and advisers… If that doesn’t work, why do you keep repeating it? It gives you trouble every time. That’s why Peguis is where he is today – there’s no question in my mind. ”
“These First Nations groups and peoples are honorable. They pay their bills. They pay their loans. You still have your bad apples, dash, but it happens in the loans. – Alan Park, CEO of Chief Peguis Investment Corp.
Peguis is not the only First Nations community in Manitoba to have dealt with McCoshen.
In 2016, McCoshen negotiated a loan for the Misipawistik Cree Nation. After the deal went sour, the community filed a complaint against him. He was abandoned a few months later.
In November 2016, McCoshen negotiated a loan for Brokenhead First Nation. Chief Deborah Smith said she did not know the exact details of the deal as it predates her tenure.
“There was a deal with Usand that was made … I think it was to secure loans with the Bank of Montreal, and it looks like Brokenhead paid Usand about $ 684,000 in fees that year. “Smith told the Free press.
In 2016, the Aboriginal Peoples Television Network reported complaints from two First Nations chiefs – one in Saskatchewan and one in Manitoba – who claimed that McCoshen’s company had offered them bribes.
McCoshen sued the broadcaster and the two chiefs, citing libel. The case remains before the courts.
“It is the policy of the commission that all complaints and inquiries remain confidential, as such we cannot comment in one way or another.” – Manitoba Securities Commission
The Manitoba Securities Commission Legal Department issued a statement on Friday in response to inquiries from the Free press on McCoshen and possible investigations into his business connections in the province.
“It is the commission’s policy that all complaints and inquiries remain confidential, as such we cannot comment in one way or another,” the MSC statement said. “I would also like to note that we regularly provide assistance to other regulators in their investigations, but again, we cannot comment on any specific issue.”
At the same time, it’s still unclear whether McCoshen has followed through on a large donation he pledged to Winnipeg.
In 2018, McCoshen announced that he was donating $ 2 million to the Assiniboine Park Conservancy to support its Diversity Gardens projects. The following year, he pledged an additional $ 1 million.
When contacted for comment this week, Conservation did not confirm whether the commitments had been kept.
“We do not disclose information regarding financial transactions related to private donations,” said Laura Cabak, communications manager for public relations, in a written statement.
Unrelated to the donations promised by McCoshen, the opening of the new and much anticipated botanical conservatory has been significantly delayed, resulting in two lawsuits.
The conservation is suing Leaf Architects and an engineering firm, alleging that design flaws delayed opening and skyrocketed costs. The lawsuit – along with a related statement of claim against APC’s insurers – was filed last week. No defense has been filed.
The exterior portion of the facility is scheduled to open on July 9. The opening of the indoor facility has been delayed until the end of 2022.
– with files from Dean Pritchard
Ryan Thorpe enjoys the rhythm of daily news, the feel of a large newspaper in his hands and the stress of endless deadlines hanging over his head.
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