Ontario is embroiled in a legal battle over control of $40 million seized from an alleged illegal gambling ring. Although prosecutors failed to obtain any significant criminal convictions from Project Hobart, the province’s Civil Remedies Act allows the government the possibility of holding on to the proceeds from the suspected crimes.
Project Hobart was a two-year probe of illegal Ontario gambling culminating in a 2019 bust by provincial police. The seized assets include millions in cash, gold, jewelry, luxury vehicles and real estate.
At the time, the multi-jurisdictional case made headlines with 28 arrests related to the Greater Toronto Area Hells Angels. Police also claimed disruption of Canada’s biggest illegal gambling ring, allegedly worth over $160 million (US$118 million).
However, the prosecutions resulting from the case ultimately collapsed after extensive delays.
Defense: Cash Reserves Stem from Distrust of Authority, Not Crime
At issue during the first of many hearings concerning Project Hobart’s spoils: how nearly $270,000 came to be in Mississauga man Dimitris Kellesis’ bedroom.
According to lawyer Susan Keenan for Ontario’s Ministry of the Attorney General, the province should keep the cash.
Kellesis’ alleged illegal gambling connections and the bundles of cash are enough of a reason, argued Keenan at a Superior Court of Justice hearing.
There is overwhelming evidence that there was unlawful activity occurring.
The bulk of the money found in his bedroom is directly connected to and was derived from that illegal activity. There is nothing else that can explain this amount of money.
However, Kellesis’ lawyer Luci Brace, disagrees.
Not only is there no evidence connecting her client to the alleged ring, said Brace, Kellesis’ family had reasonable explanations for holding large amounts of cash.
According to Brace, the cash on hand came from gifts, loan repayments, and savings by a family without trust in banks.
Kellesis, she said, was born in communist Czechoslovakia. As a result, he and his family have a deep distrust of authority, including banks.
Brace claims that “forfeiture would clearly not be in the interest of justice,” stating:
The proceeds are not proceeds of crime or unlawful activity. He is a legitimate owner.
However, after the two-hour hearing, Justice Michael Dineen reserved his judgment.
Hundreds of Gambling Charges Evaporate Due to Court Delays
In 2019, Project Hobart became public when Ontario Provincial Police (OPP) announced 28 arrests and 228 charges out of the two-year criminal gambling probe.
At the time, authorities said Hells Angels bikers and a Toronto crime family were behind the extensive illegal gambling ring.
Law enforcement claimed the sophisticated operation involved at least fourteen sports betting sites. Those sites, police said, earned upwards of $160 million in the six years before the bust and seizure of $40 million in assets.
However, most charges were subsequently withdrawn, including all counts against the alleged ringleaders. The only convictions resulted in minor legal consequences: fines, peace bonds and probation.
“All of the charges on both indictments are withdrawn,” Justice Bruce Durno of the Superior Court of Justice said in court last June.
Prosecutors cited unreasonable delays as the reasoning behind dropping the charges. Even so, they praised the OPP for a “thorough and effective investigation.”
“These decisions are not arrived at lightly,” Anil Kapoor added on behalf of the Crown.
Some of the accused have escaped conviction only to suffer worse outcomes. One target of the police investigation has since been murdered, while another survived a shooting attempt on a Cabbagetown street.
When news first broke of the Hobart charges being dropped, the assumption was that the assets would be returned to their original owners.
However, now the Crown is fighting to keep most of the assets seized assets under Ontario’s forfeiture law.
Property “Associated with Unlawful Activity” Fair Game Says Crown
According to the Ministry’s court application:
The test to keep the assets is not proof that a particular person committed a particular offence… The proceeds analysis is centred on proving that the property itself is associated with unlawful activity.
Additionally, earlier Crown documents claim investigators began monitoring a Mississauga location in October 2018.
At the 680 Silver Creek Blvd unit, police identified four individuals involved in the gambling operation, including Kellesis. According to the documents, he showed up almost daily to lock and unlock the gaming house doors.
One suspect admitted to OPP that “the partners were middlemen,” collecting money and paying it to the owners of the illegal websites. In exchange, they received a cut of the profits.
According to the Crown documents, surveillance revealed the operation’s higher-ups often visited the Silver Creek location. With the bust, authorities found gaming terminals, cash, ammunition, a gun holster, ledgers, cards, dice and a money counter on site.
For Kellesis’ part, documents allege he transferred profits to leaders through another man who frequented the Silver Creek house.
When arrested at his Mississauga home, police found $270,000, electronic devices and debt lists.
Crown Seeks Assets Despite Charges Being Stayed or Withdrawn
According to initial court filings, alleged Hells Angels members Robert Barletta (London) and Craig McIlquham (Toronto) led the alleged gambling ring.
In fact, it was Barletta who escaped execution in downtown Toronto while on bail on the original Hobart charges. His family vacation home was also previously destroyed in a 2018 arson.
However, the alleged gambling ring remains legally unproven, with all Project Hobart charges now dropped. Likewise, the seized assets have not been proven proceeds of crime.
Still, the Crown seeks to keep assets seized from Barletta, McIlquham, and Kellesis, in addition to Londoners Dejan Markovic and Habiba Kajan, despite all charges against the men being stayed or withdrawn.
Who the court ultimately sides with remains undecided.