2025-03-19 - Saeed Tabrizi, et al. v. Vahid Farjami, et al.
A recent Ontario Superior Court decision provides a valuable example of how the courts handle disputes involving alleged financial misconduct, asset freezes, and disclosure obligations. The case involved a number of individuals who invested in a travel financing business: Trip Support Inc.. Later, the investors brought legal action with the support of a civil litigation lawyer when the funds they contributed were not returned.
The dispute raised complex questions about business failure versus fraud and what happens when parties don't meet their obligations under court orders. It also illustrates how Mareva injunctions (asset freezes) and findings of contempt operate in civil litigation.
Background on the Business and the Dispute
Trip Support Inc. operated a "Book Now, Pay Later" (BNPL) model, offering customers the ability to finance airline tickets. Investors were told the business was low-risk and that returns would be generated from interest paid by travellers. Between 2018 and 2023, a group of investors, some of whom were recruited by others, contributed what they estimated to be around $24 million.
In 2024, the business collapsed. The investors alleged that their funds had been misused, claiming that Trip Support was a fraudulent scheme, while the defendants described it as a failed but legitimate business. The plaintiffs sought urgent court intervention to prevent the dissipation of funds and assets.
What is a Ponzi Scheme?
A Ponzi Scheme is a type of investment fraud scheme where perpetrators encourage financial investment into a seemingly lucrative business model that offers high returns and low barriers to entry. For Ponzi schemes to be successful, they require recruitment. Because early on, investors see returns (typically from fellow investors' buy-in), it usually attracts more people who think the opportunity is legitimate and are looking to make low-effort cash quickly. As investors stop seeing returns and money starts to run out, Ponzi Schemes almost always collapse. If you've invested in a Ponzi Scheme or have been accused of perpetrating or recruiting for an investment scam, book a consultation with a skilled and experienced fraud lawyer in Ontario.
Mareva Injunction: Freezing Assets to Preserve Claims
The plaintiffs and their civil litigation lawyer successfully obtained a Mareva injunction without notice to the defendants. This kind of order temporarily freezes a party's assets to prevent them from being moved or hidden during a legal dispute. The court also issued a Norwich order, allowing the plaintiffs to gather third-party information about where the money may have gone.
As part of the injunction, the defendants were required to disclose all their assets, both inside and outside Canada.
Contempt of Court: Failure to Disclose Property
It later came to light that the defendants, Vahid Farjami and Leila Olyaei, had not disclosed ownership of real estate in Spain, despite being under a clear legal obligation to do so. During their examinations, they denied holding any assets outside Ontario, but evidence later revealed otherwise.
The court found that the defendants had intentionally failed to disclose this information and ruled that they were in contempt of court. A sentencing hearing is pending. The judge emphasized that court orders must be followed, even if they are later challenged or appealed. Failing to comply undermines the integrity of the legal process.
The Plaintiffs' Own Disclosure Issues
While the defendants' non-disclosure led to a contempt finding, the plaintiffs also faced scrutiny from the court. When applying for the Mareva injunction, the plaintiffs failed to disclose several key facts:
- Some investors had received partial repayments.
- The main plaintiffs had earned "commissions" for recruiting others.
- The actual amount owed may have been significantly less than claimed.
These omissions led the court to conclude that the plaintiffs had not met their obligation of full and frank disclosure, which is especially important when seeking an injunction without the other side present. As a result, the Mareva injunction was set aside.
Lessons from the Case
The Saeed Tabrizi et al. v. Vahid Farjami et al. case offers a few practical insights about what to expect during civil fraud cases.
- Court orders must be followed: Even if a party believes an order was wrongly granted, it must be obeyed until it is varied or set aside.
- Disclosure works both ways: When seeking extraordinary remedies like Mareva injunctions, parties are held to a high standard of transparency.
- Asset freezes are powerful but conditional: Courts will lift these orders if the initial application does not provide all relevant information.
Ultimately, this case serves as a reminder that both plaintiffs and defendants must approach the court with full honesty and proper documentation, particularly in high-stakes civil matters involving large sums and serious allegations. For the best results, you must choose to work with a fraud lawyer with a proven track record working on civil fraud and litigation cases.
Defend Against Fraud with Karrass Law
At Karrass Law, our lawyers are experienced with civil and criminal fraud cases. Our experience, track record, and skills allow us to navigate your case effectively. To learn more about how to pursue a fraud lawsuit or defend against one, book a consultation with our leading civil litigation lawyers to get started.