Luigi Coretti, former head of the firm BCIA and a friend of MP Tony Tomassi, was arrested Monday morning by the Sûreté du Québec (SQ) on suspicion of fraud for 2005 and 2010.
Credits: Chantal Poirier/QMI AGENCY
MONTREAL - Provincial police arrested a businessman with former ties to the Quebec Liberal Party as well as the city of Montreal and its police force for fraud allegations Monday morning.
Police accuse Luigi Coretti, 47, the former of head of the bankrupt private security firm, BCIA, of misrepresenting assets in order to obtain bank loans.
Coretti will be charged with two counts of fraud over $5,000, one count of making a false document and one count of making false statements, police said. The fraud allegedly took place between 2005 and 2010.
Police refused to give further details on the case and said Coretti will be formally charged "at a later date." Police released Coretti Monday afternoon.
A police spokesman confirmed to QMI Agency Monday that Coretti's arrest was not related to operations involving the province's permanent anti-corruption squad, which arrested 11 people on
Thursday, including a former Liberal Party donor.
Monday's arrest is another embarrassment for the Quebec Liberals.
Quebec's electoral commission recorded that Coretti gave just under $8,000 in donations to the Liberals between 2004 and 2008. The commission does not record Coretti giving to any other party.
Coretti was indirectly linked to the resignation of Tony Tomassi, a friend of Coretti and former MNA who was expelled from the Liberal caucus in May 2010.
Tomassi was charged with defrauding the Quebec government and breach of trust. He is accused of misusing a credit card owned by BCIA and of influencing the Quebec government in favour of the company and its former head, Coretti. Tomassi resigned his seat in Quebec's legislature in May. His trial has not yet started.
BCIA and Coretti are also linked to controversy at Montreal's City Hall.
BCIA was contracted to provide security for Montreal police buildings. The City's 2010 auditor general's report noted that BCIA agents were working and getting paid on a contract that was not officially renewed or tendered.
Yvan Delorme, the police chief in 2010, said in June of that year that it was an "error" to continue to pay BCIA agents without approval from City Hall.
There were also reports that Delorme dinned with Coretti twice - on Coretti's tab - shortly before becoming police chief. Delorme said in 2010 that he did not recall those dinners.
Delorme retired in September 2010, after 27 years in the force. He said his decision to quit was unrelated to the BCIA controversy.
Michel Picard, an expert in financial crime, said Monday that what's shocking about Coretti's arrest is that the charges could be related to provincial politics.
"A fraud has to involve some sort of personal gain," Picard said. "However, was it just Coretti (allegedly) making false statements ... or was money (allegedly) taken out of an account by him for the benefit of someone else?"