Trove of electronic records seized in lawsuit against Denesoline CEO

A receiver has hundreds of thousands of documents, emails and texts from the computers and electronic devices of a man accused of bilking Łutsel K'e Dene First Nation (LKDFN) businesses in the N.W.T. out of millions of dollars.

The receiver was appointed to take over operation of the businesses shortly after the LKDFN filed a lawsuit against Ron Barlas, alleging he improperly diverted up to $12 million from its companies during his years as chief executive officer.

Barlas has denied any wrongdoing.

In a report to the court filed earlier this month, the receiver says none of the records obtained from Barlas's devices have been reviewed because a process needs to be put in place to protect any records that may be privileged or personal.

That is likely to be a focus during a court appearance in the case on July 5 in Yellowknife.

Office rent in dispute

Another contentious issue is the receiver's decision to stop making lease payments for office space being used by the LKDFN's Denesoline group of companies. They're based in offices in a Yellowknife industrial park. Barlas's wife, Zeba Barlas, is the landlord.

The receiver said that, according to banking and accounting records, the LKDFN companies were paying Zeba Barlas's company $15,000 per month for the space.

"The receiver has reviewed the lease agreement and has concerns about paying rent to one of the respondents given the allegations of self-dealing in the litigation. Accordingly, the receiver has decided to hold the lease payments in trust, pending further direction from the court," the report reads.

In the report, the receiver says Ron Barlas's lawyer objected to that move, saying the receiver did not have the authority to re-direct the payments.

Videotaped removing documents

According to his report, the receiver met with Barlas and his son Kublai at LKDFN's Denesoline Corporation offices in a Yellowknife industrial park on May 17. The purpose of the meeting was to get information from Ron Barlas about the LKDFN businesses and review items at the office that Barlas said belonged to him.

According to the receiver, Ron Barlas said he was not going to talk about the LKDFN businesses and that any questions about them should be put in writing and directed to his lawyer.

The receiver said he permitted both father and son to remove some items that were obviously personal and of insignificant value. Another item Ron Barlas was claiming as his personal property, a Porsche motor vehicle, was withheld until a review of documentation could be completed.

In his report, the receiver says an investigator videotaped Ron Barlas removing documents from the offices just before the lawsuit was filed. Barlas agreed to return them, but the receiver said the material Barlas brought back consisted of court filings in the case, his business cards, stationary and some personal items.

The receiver said the only Denesoline document was a non-disclosure agreement with an outside party that was never executed.

Barlas also turned in his company iPhone, but according to the receiver it had undergone a factory reset, wiping it of all data.

The receiver said Barlas said the reset must have happened when a Denesoline contractor had the phone. The receiver said he was able to get all of the phone records from a data cloud where a backup was stored.