Man awarded $742K after being scammed by B.C. couple he called 'mom' and 'dad'

A file photo shows a statue inside the B.C. Supreme Court in Vancouver, B.C.

A property in Vancouver’s Fairview neighbourhood, a botched line of credit, a trusting French man and an older couple he considered pseudo-parents are at the centre of a messy legal battle in B.C. Supreme Court.

On Oct. 5, Justice Warren Milman ordered the defendants, Gordon and Jeannine Kapelus, to pay more than $742,000 in damages for stealing Francois Milly’s life savings under the guise of friendship and legal guidance.

The plaintiff’s lawyer tells CTV News the case is an example of affinity fraud, a type of investment scam in which victims are targeted as members of a particular group, such as a religion and race.

“It’s often said a conman has to show trust in the person they’re going to defraud,” explains Les Mackoff.

According to the judgment, Milly met the Kapeluses in 2009, a few years after immigrating to Canada from France. Since he saw the pair as his surrogate family, he often referred to the Kapeluses as “dad” and “mom.”

Mr. Kapelus is a retired lawyer, which is one of the reasons Milly turned to him for legal advice in June 2016. He had just sold his property and invested the proceeds, only to learn TD Bank had made an error while generating a payout statement for the sale.

That left one of two lines of credit unpaid, and TD was refusing to discharge the mortgage until the bank received repayment.

Kapelus advised Milly against succumbing to TD’s demands, and began speaking to the bank on Milly’s behalf. In November 2016, after months of bargaining with TD, Kapelus convinced Milly to transfer his life savings to the corporate account of Janalex Investments Ltd., a company owned by the defendants. The theory was that this would improve Milly’s bargaining position even more, but in reality, those funds were transferred to Mr. and Mrs. Kapelus personally.

A timeline provided in the court decision shows TD filed an action in debt against Milly in January 2017, and that Mr. Kapelus handled the litigation on Milly’s behalf.

“To say Mr. Kapelus mishandled the litigation would be an understatement,” reads the judgment. “Suffice it to say that matters did not go well for Mr. Milly.”

By June 2019, Milly decided to abandon the appeal and pay TD, and asked for his money back. At this point, the Kapelus couple broke off communications, and Milly was forced to rent out his house in Victoria, where he’d moved in hopes of retiring. From there, he went from being a defendant in a property case to a plaintiff in a fraud case, which consumed another three years of his life.

There’s no account of how Milly’s funds were spent by his former pseudo-parents, but in his decision, Justice Milman offers one explanation.

“The evidence before me suggests that well over half of the remaining funds, a total of $268,764, was likely used, in February 2019, to pay off two outstanding judgments against Ms. Kapelus in favour of the University of British Columbia, her former employer,” Milman wrote.

As it turns out, this was not the first time the Kapeluses have been in court. Mr. Kapelus represented his wife in her case against UBC, which spanned 23 years and ended in her loss.

Now, she and her husband must pay nearly $642,000 in pecuniary damages and $30,000 in aggravated damages, plus Mr. Kapelus is responsible for another $70,000 in punitive damages. Milly’s defence team are also seeking special costs, which would cover their client’s legal costs.

“There’s nothing as satisfying as representing a decent person who's been treated dishonestly and has been vindicated,” Mackoff says.

Once the damages are collected, Mackoff says Milly will be able to pay back borrowed funds, as well as the mortgage he had to take out in Victoria, and be left with some retirement savings.

“I’m not saying he’s going to be completely made whole again,” Mackoff says. “But this will get him as close as possible.”