Life after the big swindle

Peter Brieger • Financial Post • Saturday, February 17, 2007

Disgraced Bay Street broker Michael Holoday swindled clients -- including his mother-in-law and the best man at his wedding -- out of $22-million to help bankroll a Forest Hill mansion, expensive cars and Caribbean vacations.

Even when he was out on bail facing more than a dozen counts of fraud, the con man tried to keep up this high-flying lifestyle and derided his upcoming trial as a "misuse of public funds."

This lack of remorse stunned the judge who sentenced Holoday to eight years in prison in 2001, and ordered him to pay $6-million in restitution. "He is a dangerous man," Justice Patricia German said at the time. "The ability to charm and make people trust him, in the hands of an unscrupulous person like Mr. Holoday, put not only his clients, but the public at large, at risk."

It appears that not much has changed in six years.

In his latest parole board report, Holoday, now 41, is described as an incorrigible spender who continues to portray himself as a big shot while free on day parole. He is once again living beyond his means, and racking up debt by borrowing money from his current employer, whose name is blacked out in the report.

"The board continues to have serious concerns that you continue to place yourself in further significant debt and to underestimate your real financial circumstances," said the Sept. 27 report, obtained by the Financial Post. "This is a major risk area for you." The board noted Holoday keeps up child support payments for his three children and goes to counselling sessions where he is "cordial and candid," even if the "highly intelligent" man comes across as "detached and aloof in [his] emotional reactions."

He has paid back $4-million to his victims and visits his kids on weekend passes from a halfway house. But even though Holoday's case management team recommended full parole, the board warned it won't give its stamp of approval until Holoday's budget reflects reality -- such as counting restitution payments along with food, clothing and car expenses.

"It will be important for you to explore why you continue to present yourself as highly successful financially, even when you need to go further into debt to provide this front," said the report. "While you have been more open with your financial situation, you still are not living within your means.

"The Board is not prepared to consider full parole until sufficient progress has been demonstrated with respect to financial management/planning and your understanding as to why you continue to mislead yourself and others as to your real situation."

If history is any barometer, living on a tight budget may be the biggest challenge of Holoday's life.

Shortly after he graduated from university in 1989, the B.C. native landed a job as a broker at Midland Walwyn and later First Marathon Securities.

He quickly made a name for himself as a Bay Street whiz kid who, at his peak, was earning more than $1-million in annual commissions, the court heard during his trial.

Holoday owned several cars, including a Porsche and Jaguar, a speedboat, property in Barbados and his jewel: a 3,600 square-foot home in Toronto's Tony Forest Hill neighbourhood.

When clients started asking questions about their money, Holoday falsified account statements so he could keep using their investments as his personal piggy bank and switched funds from one account to another to stay one step ahead of prying eyes.

Holoday was eventually charged in 1997 with 15 counts of fraud, after a two-and-a-half year police investigation.

But even as he was petitioned into bankruptcy by angry clients --and faced the prospect of going to jail -- Holoday refused to give up his mansion or the other assets he had accumulated. For more than a year, he battled his victims to stave off bankruptcy, taking his fight to the Supreme Court, which refused to hear the case.

At his trial, 29 people -- including his now ex-wife's mother, his brother-in-law and best man --lined up to testify that Holoday defrauded them.

But Holoday fought back until the end, calling his clients liars and maintaining that he covered their investment losses.

"I'm guilty of being too generous and I am guilty of being stupid," Holoday was reported as saying in 2001. To the judge, Holoday added: "There was no intent in my mind to defraud people."

Like many so-called white collar criminals, Holoday was granted day parole quickly -- just over a year after he was sentenced.

But the parole board revoked that freedom less than year later in December, 2003, due to "disclosure and credibility issues."

In fact, police had considered charging Holoday because he was involved with an unnamed company whose chief executive was later charged with fraud, the parole board report said.

In December, 2004, Holoday again won day parole only to have it yanked in less than a year because of "clear information" he was living beyond his means.

In the past few months, the board has once again found Holoday is "not being cautious about [his] predicted income."

Corrections officials will have no choice but to release him on full parole in 2009. And they can only hope Holoday will heed their advice: "It is essential for you to be honest with yourself, and those working with you."

pbrieger@nationalpost.com