A former Winnipeg business manager has been sentenced to 42 months in prison for his role in a nearly decade-long fraud involving the diversion of more than one million kilograms of auto parts to scrap dealers.

Michael Silva, 50, pleaded guilty to one count of fraud over $5,000. Provincial court Judge Mark Kantor ordered Silva into custody, saying the fraud continued for close to a decade and appeared to have been driven by personal gain.

Silva had been the general manager of BBB Industries, a U.S.-owned company that bought used auto parts, including starters and alternators. The parts were refurbished at plants in Mexico before being returned to the company’s Winnipeg distribution centre and resold.

Court heard that beginning in 2013, Silva organized and facilitated the diversion of 82 shipments of unrefurbished auto parts to purchasers who paid him, a co-worker, and another accused. The diverted shipments totalled more than one million kilograms.

The scheme generated about $940,000 in payments to those involved. Silva personally received approximately $189,000.

As the company’s most senior Canadian employee, Silva had significant responsibility and autonomy. Court heard he failed to document incoming shipments, allowing the unrefurbished parts to be redirected and sold at scrap value.

The fraud came to light in August 2022 after BBB Industries received an anonymous tip and began an internal investigation. Silva was fired the following month and arrested by police in May 2023.

In a victim impact statement, Steven Mesarick, executive vice-president of TERREPOWER, which recently purchased BBB, said Silva’s conduct had a corrosive effect on company morale. He said the financial loss to the company was far greater than the amount pocketed by Silva and his co-conspirators because the parts were sold as scrap instead of being refurbished and resold.

Court heard Silva had no prior criminal record, was not struggling financially, and was not suffering from a drug or gambling addiction when he began the fraud. His defence lawyer said Silva had strong family support and would comply with an order requiring him to pay $189,000 in restitution.

Judge Kantor said he accepted that Silva was remorseful and had good prospects for rehabilitation, but gave little weight to a psychological report describing him as a very low risk to reoffend. The judge said that assessment was difficult to reconcile with the sustained pattern of fraudulent conduct.

Silva has been sentenced to 42 months in prison.

The post Winnipeg Ex-Businessman Sentenced to Prison After Nearly Decade-Long Auto Parts Fraud appeared first on Canadian Fraud News Inc. | Fraud related news | Fraud in Canada.

Originally published on Canadian Fraud News.