Mike Duffy trial hears accountant trace path of Nigel Wright's $90K payment

A forensic accountant carefully traced the path of $90,000 of funds from the account of Prime Minister Stephen Harper's former chief of staff Nigel Wright, to an Ottawa-based law firm, into the bank account of suspended Senator Mike Duffy, and finally to the receiver general of Canada.

Forensic accountant Mark Grenon, who has reviewed thousands of Mike Duffy's financial transactions, continued testifying Wednesday during a voir dire — a sort of trial within a trial to determine admissibility of evidence.

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Duffy has pleaded not guilty to 31 charges of fraud, breach of trust and bribery related to expenses he claimed as a senator and later repaid with money from Wright.

Grenon, using a flow chart, showed the financial transactions leading up to the final payment to the receiver general.

He revealed that on Mar, 22, 2013, Duffy refinanced his mortgage for $91,600, an amount that went into his bank account. On the same date, Duffy transferred $80,000 to his line of credit account. decreasing the amount owed from around $86,000 to just over $6,000, Grenon said.

Three days later, on March 25, Wright transferred $100,000 from his CIBC U.S. account to his Canadian bank account, Grenon said. Wright then issued a bank draft in the amount of $90,172.24 to the Ottawa-based law firm of Nelligan O'Brien Payne for the same amount with the notation "Senate expenses."

Duffy receives cheque from law firm

A day later, Duffy received a cheque from the law firm for that same amount of $90,172.24, court heard.

Two days later on March 28, the amount of  $90,172.24 was withdrawn from Duffy's account and paid to the receiver general of Canada, Grenon said.

Wright, who is expected to be called as a key witness in the trial, was dismissed as chief of staff after the arrangement between Wright and Duffy was made public. He has said that his "actions were intended solely to secure the repayment of funds, which I considered to be in the public interest."

Wright said he never advised Harper about this transaction, and Harper has denied knowing about the arrangement.

During cross-examination, Duffy's lawyer Donald Bayne said that at the end of the day, all the transactions make it appear that Wright's $90,172.24, which was used to pay back the government, came from Duffy.

"In the eyes of the receiver general? Yes it does," Grenon said.

'Baffle the receiver general'

Bayne continued, saying that Grenon's flowchart reveals how Wright could "baffle the receiver general and most of the Canadian voting public into thinking Mike Duffy has admitted a mistake and he's paid back $90,000." 

"You [Wright] don't want it known that you paid the $90,000. You want to conceal that from the Canadian public. Your exhibit shows exactly how that would be done, right?" Bayne asked Grenon.

But Grenon said it didn't look like these transactions were done with the intent to hide, because if concealment was the purpose, the transactions should have been layered.

"This would not be any way of doing it. It's only one level in between. You would have multiple layers set," Grenon said.

"Sir, you might do that or you might not. You might not do it that well. You know yourself lots of crimes are committed imperfectly," Bayne said.

In his opening statement of the trial, Bayne accused Wright of leading a scheme that would force Duffy to admit he made mistakes regarding his Senate expenses and make it appear he had repaid $90,000 to stem the political fallout.

Following the voir dire, Judge Charles Vaillancourt will determine how much, if any, of the testimony will be admissible.

Bayne has argued against the admissibility of much of Grenon's testimony, questioning its relevance and the objectivity of Grenon.

On Tuesday, Grenon testified that according to his review, Duffy was withdrawing more money from his bank account than he was depositing and was forced to fund the difference with his line of credit.

​Grenon said that he also discovered $159,477 of unknown deposits in Duffy's bank account. He said $50,000 of that total could be related to an inheritance, but that would still leave more than $109,000 unaccounted for. Grenon said if there is more information or documents available, he would be open to reconciling the remaining amount.