Alleged Portus Fraudster Blames KPMG For Surrender Holdup

Date: Monday, October 15, 2007
Author: FINalternatives.com

Boaz Manor says he really wants to return to Canada to face fraud charges stemming from the collapse of his hedge fund, Portus Alternative Asset Management. But he claims that representatives of his alleged victims simply won’t let it happen.

Manor, who fled to Israel in 2005 just before Ontario regulators seized his firm’s assets, along with Portus co-founder Michael Mendelson, were charged last month with fraud and obstruction of justice by Canadian authorities. But KPMG, the court-appointed receiver overseeing Portus’ bankruptcy proceedings, sought and won a travel ban on Manor from an Israeli court two years ago. And it is not prepared to waive the restriction just yet.

The firm is expected to oppose a motion by Manor to lift the ban and allow him to return to Canada because of some unfinished business. Specifically, KPMG has yet to recover some US$9 million worth of diamonds that Manor allegedly took with him to Israel. Litigation over the issue is currently winding its way through the Israeli courts.

Manor’s attorneys, who have already agreed to surrender terms with the Royal Canadian Mounted Police, want to move that dispute to the Canadian courts. KPMG wants to ensure that the Israeli proceedings will continue.

“We, as his criminal counsel, and the RCMP and the prosecution have been bystanders, which is really what we are right now, because it has to be resolved in Israeli court with respect to the travel ban,” Manor attorney Brian Greenspan told the Globe and Mail. “He’s been anxious to return since the arrest warrant was issued.”

The travel ban is set to expire on Oct. 18. KPMG is expected to seek a one-year extension of the prohibition, while Manor’s legal team will argue that the Canadian criminal charges ought to take precedence over the Israeli case.

“Hopefully, we can work something out,” KPMG partner Bob Rusko told the Globe and Mail. “We just don’t think it’s appropriate to lose the right to go after assets.”