Even though Michael Cady made less than $40,000 in 2017, but spent nearly $100,000 on big-ticket purchases, he is adamant he did not know his wife was stealing money from Henninger’s Diesel.
Cady, who testified on Day 2 of his trial, said he was “flabbergasted” when he was arrested by provincial police in connection to defrauding the small business of more than $1 million. You can read our coverage of Day One of the trial here.
“You made less than $40,000 that year, and on your evidence, Karen was making $28 an hour,” said Crown counsel Carolyn Hackett, of the province’s Serious Fraud Office. “Would you agree that spending $98,000 while making less than 40K is suspicious?”
“For one person, yes,” said Cady. “I honestly can’t tell you, other than trusting and believing in my wife that our finances were in order,” and that they were able to afford everything they were buying.
With no explanation of how they were able to afford it, they were able to purchase big-ticket items like snowmobiles, ATVs, a pontoon boat, trucks and camper trailers, said Hackett.
Cady testified that he was ignorant of how much money his wife deposited and spent out of a joint account they had set up at Northern Credit Union. That’s because after a financial security leak at his place of employment, he no longer thought his money would be safe in that account. He set up a personal account at RBC and used that bank account for his payroll deposits from work.
Cady testified that Karen maintained the credit union account, and that he paid very little attention to it, other than when she asked him to deposit or withdraw cash from time to time. He said he never had a debit card for that account, and that he needed to go to the bank and talk to a teller to complete his business. Whenever he was offered a receipt, which would show the account balance, he just tossed it out or didn’t take one, he testified.
He told the court he’s not a “numbers guy,” and that he trusted his wife would take care of all of their finances. He maintains he had no control over the bank account, but the Crown is saying otherwise.
Cady testified that at no point did he become suspicious of the money being spent, even though his wife had filed for bankruptcy twice in the past, and was convicted of defrauding clients of $1,500 at a local insurance brokerage.
He testified his wife “swore up and down” that she was not guilty of that crime, and that she had planned to appeal the conviction, but it would have cost more than just paying back the $1,500.
However, Cady told police during his interview that he suspected his wife of stealing that money.
“I wanted to give my wife the benefit of the doubt, and that was the worst mistake of my life,” he told police.
Cady testified that he was often surprised by the purchases his wife made, and that sometimes it would lead to arguments, but that he was always “overruled” by Karen. However, he never questioned her on how they were able to afford those purchases.
For example, he said Karen bought a $40,000 pontoon boat in 2017 without his knowledge, and that it led to a heated argument “with a lot of colourful words.” He said he never wanted a pontoon boat, but Karen told him that she was keeping it, regardless of what he said.
Another contentious purchase was a 1979 Ford pickup truck that Cady said Karen bought for $6,000 in June 2017.
Cady said he and his wife had discussed finding an older vehicle to take to car shows, but that the conversation never got further than that. When she told him she had bought the truck, he told the court he wasn’t exactly angry, it was more him questioning why she would buy a Ford when she knew he wouldn’t never buy such a vehicle.
They sold that truck a few months later for $5,500, and that money went back into the credit union account, he said.
Cady told the court his wife would receive bonuses from Henninger’s Diesel, and he thought it was enough to help pay for the purchases.
“You just assumed those bonuses were so high they would be able to cover all of these purchases,” Hackett said.
“I was told we had savings in the bank,” Cady said. “I took for granted that I could trust my wife and that she was looking after everything.”
In response to evidence provided on Monday by Henninger’s Diesel president and owner Diana Fuller, Cady’s lawyer, Glenn Sanberg, asked him if he had ever had a conversation with her regarding his inheritance from his father.
Fuller testified that Karen used the idea of a $400,000 inheritance as an excuse for how she was able to afford all of the purchases she was making. Little did Fuller know her employee had stolen more than $1.2 million from the business by the time she was caught.
Cady told the court his father did die in 2015, but there was absolutely no inheritance from him.
He also said, contrary to evidence provided on Day 1, that he never had conversations with Fuller about personal finances, or about the finances of Henninger’s Diesel.
He said he occasionally visited the business to drop off a coffee for his wife, and that he only spoke to Fuller when she started a conversation with him.
“I never had a conversation with Diana Fuller about money or an inheritance,” he said. “We talked about work, grandkids, but never about financing. That conversation never happened.”
Given Karen’s criminal record, Hackett questioned why Cady would not find it suspicious that they were living well above their means, especially given her access to Henninger Diesel’s finances.
Prior to Karen Cady’s sentencing, she told the court she is taking full responsibility for all the fraudulent activity, and that no one had knowledge of it, including her husband.
The trial continues today.