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Mall owner’s son accused of lying, unethical behaviour

July 18, 2013, Elliot Lake, Ont. – The son of the owner of the Algo Centre Mall found himself branded a liar Thursday during cross-examination on his fourth and final day on the stand at the inquiry into the deadly collapse of the building last summer.

Lawyers accused Levon Nazarian of hiding evidence about the mall's state of disrepair, and of resorting to unethical behaviour to protect his father, who risked losing the facility.

Rob MacRae, who represents an engineer that found the mall structurally sound just weeks before it collapsed, said concrete fell in a store around June 2011 but Nazarian hid the fact.

Nazarian responded by saying the mall manager had told him there was nothing to worry about because the fallen material was fire-proofing, not concrete.

The manager was then instructed to tell the engineer, Bob Wood, to investigate, Nazarian said.

"I put it to you that's an absolute fabrication," MacRae said.

"You're not only misleading the commission, you're lying."

"Absolutely not, sir," Nazarian said.

The inquiry has heard that the bank had been threatening to pull the mortgage unless the owner took immediate action to fix the crumbling mall.

A series of annual inspections for the Royal Bank had noted serious water penetration and rusting steel supports.

Those supports finally gave way June 23, 2012, and part of the rooftop parking deck crashed down, killing two women.

For the last four years of the mall's life, Nazarian, 29, a real estate broker in Richmond Hill, Ont., had been trying to sell it for his father.

MacRae suggested Nazarian acted unethically and unprofessionally by hiding adverse information about the mall – such as the bank's inspection reports – from potential purchasers.

The witness denied that.

Nazarian said he saw no evidence of leaking when he visited the mall in late 2010 but knew there were "sporadic leaks."

"I don't want to mislead this commission," Nazarian said at one point.

"I wouldn't start now," MacRae retorted.

Nazarian also came under fire over a contracting company set up by one of his father's employees.

The new company billed for work done on the mall although it did no work.

Those invoices and other documents created on Nazarian's computer were used to try to ward off the bank and to obtain financing to repair the mall.

Lawyer Jonathan Shime, who represents the contractor, pressed Nazarian to admit he had gone along with his father's scheme to create the independent firm.

"To be frank, sir, you're in a mess," Shime said.

"The pressure is on, the bank wants some documents: 'Give us some documents or we're going to default'."

Nazarian conceded the bank was putting pressure on his father but said the contractor, Alexandre Sennett, was a legitimate "big-shot" businessman.

"I trusted him fully," Nazarian said.

He also said he knew little about the set-up of the contracting company.

The attacks on Nazarian appeared to foreshadow the kind of grilling his father, Bob Nazarian, 67, will likely face when he takes the stand as the next witness on Tuesday.

The inquiry has heard how the mall was a financial sinkhole for the elder Nazarian, who bought the building in 2005 for $6.2 million but was never told of its troubled history.