Exteriors of the Shangri-La Hotel and the sculpture outside on University Ave. in Toronto.Fred Lum
A former employee of Toronto luxury hotel and condominium the Shangri-La has been extradited to Canada from Florida and arrested on criminal fraud charges relating to allegations of more than $6-million in a fake invoices.
Normally the criminally accused face a bail hearing after an arrest but according to the Toronto Police Service, Kashif Khan, 51, was sent directly to a provincial jail when he arrived back in Canada on Sept. 5, because of an outstanding arrest warrant for contempt of court relating to the parallel civil claims bring brought by Westbank Corp. and its 180 University Management subsidiary on the same set of allegations.
“He’s the main player,” said Detective David Coffey with the financial crimes unit of TPS. “The second charge is conspiracy to commit an indictable offence, there are other parties involved but no arrests have been made as of yet and that investigation is ongoing.”
The March 9, 2023 contempt arrest warrant was issued after Mr. Khan failed to appear for examination in October, 2022 on the civil claim, and was found in contempt in January, 2023. The contempt ruling also sets back Mr. Khan’s defence, because the order struck from the record his defence submissions and validated Westbank’s initial claim.
“The allegations are as set out in the statement of claim. Mr. Khan is deemed to admit those allegations,” said Darryl T. Mann, partner with Torkin Manes LLP. “There’s an expectation, particularly of fiduciaries, to act with honesty, integrity and best interest of their employer, as said in statement of claim, it was alleged, and he fell woefully short of these requirements.”
Westbank’s claim states Mr. Khan worked for the Vancouver-based property developer’s Ontario subsidiaries from 2016 in an engineering role that gave him the authority to source trades and vendors, negotiate fees, supervise work and approve invoices. In 2022, the company received an anonymous tip alleging that Mr. Khan was approving invoices for work that was not completed and then collecting cash from those trades who did the billing.
The claim identified five companies who collectively submitted dozens of invoices for millions of dollars and court files outlining a settlement between Westbank and two of those companies cast further light on the scheme.
Summaries of testimony from Mila Kornilov, who ran the Starlit Ltd. cleaning company, claim her company was hired by Mr. Khan in 2017 to clean the Shangri-La’s Miraj Hammam Spa. Ms. Kornilov said Mr. Khan told her there would be times when he wanted to use “subcontractors” for projects at the Shangri-La but that he needed to bill for them using approved vendors such as her company. “All Starlit had to do was send invoices to 180 University Management in the amounts and terms that Mr. Khan would advise,” the filing reads, and after Mr. Khan approved the invoices Starlit and Ms. Kornilov would keep 10 to 25 per cent of the fake invoices for “agreeing to this arrangement” and give the rest to Mr. Khan in the form of cheques or cash. Ms. Kornilov testified that her sister, Maryna Postnikova, and her company PADC Inc. also participated in the same scheme.
All told, the two companies filed more than 300 invoices between 2017 and 2022 collecting as $2.4-million, at least 50 invoices were for work they didn’t perform but for which they collected as much as $1.7-million that was split with Mr. Khan.
Between 2017 and 2020 Ms. Kornilov testified that she would meet with Mr. Khan or an associate of his in parking lots or similar places and hand over a cumulative $513,968 in cash bills. Between 2021 and 2022 they began to use cheques (in Mr. Khan’s name) or money transfers as well, shifting $715,173 to Mr. Khan in this way; about $107,000 was given to him in physical cash during this period, in the parking lot and then kitchen of her condo.
Mr. Khan resigned from Westbank in August, 2021, to move to the United States, eventually settling in Orlando. Westbank’s claim alleges he continued to arrange fake invoices even after leaving his position, until January, 2022.
The Ontario criminal arrest warrant was issued for Mr. Khan on May 16, 2023, and on Aug. 15, 2024, the U.S. Attorney’s office for the Middle District of Florida filed to extradite him as a fugitive. That filing contains more details into the criminal case against Mr. Khan – which includes money-laundering charges – describing Ms. Kornilov working with an ex-boyfriend named Zenon Junko who would accept the money transfers from her and for a 10 per cent fee return the funds to in cash to split with Mr. Khan.
The extradition files say bank records of accounts Mr. Khan approved invoices for show $2.9-million in transfers to accounts controlled by him. That money was exchanged for foreign currency, as well as personal credit card, mortgage and tax payments.
It’s not clear exactly how long Mr. Khan will spend in jail on the contempt charges, not least because the court has discretion on extending his stay beyond the initial 60-day order unless he “cures” the contempt according to Mr. Mann.
“It is expected that litigants respect the rule of law and respect our court’s procedures, what the court found here was that Mr. Khan failed to do so,” he said.
None of the allegations have been proven in court.