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Shortly before his death, the man accused of embezzling at least $1.2 million from a Hamilton retirement home through an identity theft and payroll fraud scheme asked a court for mercy as he was rapidly running out of cash.
In a March 15 affidavit, Pasquale Pat" Mostacci, the former executive director of Villa Italia, told a Hamilton court he only had about $31,000 in a joint RBC account with his wife and owed some $50,000 in debt from various credit cards."
The affidavit, obtained by The Hamilton Spectator, was filed to ask the courts to change a judge's order that froze all of his assets, including his house and bank accounts, to be able to support my family and be able to pay for legal representation."
I currently do not have a source of income," he wrote. I am the sole income earner in my household."
The affidavit represents the only response directly from Mostacci, who died on April 4 at the age of 53, to the accusations of his former employer, the Sons of Italy Charitable Corporation, which owns the non-profit retirement home Villa Italia. The company was suing Mostacci for $1.2 million.
The document, which includes some of Mostacci's personal bank records, also provides a glimpse into his financial life, but the fate of the stolen retirement home money remains a mystery.
The ghosts in the villa
Mostacci, well known in Hamilton for his long tenure leading Villa Italia's and as member of the Festitalia board of directors, is accused of being the architect of a scheme that used the stolen identities of three Ontario women to bleed a steady flow of cash from the home for at least seven years.
A Spectator investigation that reviewed Villa Italia employee data, a third-party audit of the home's payroll along with bank records and court documents, found the identities of the women - who live in Brampton, Grimsby and Ancaster and never worked at the home - were used to create ghost employees" in Villa Italia's payroll.
Mostacci was fired on Jan. 4 over ongoing operational problems at the home, including Villa Italia's rising vacancy rate. The Spectator investigation found that within 30 minutes of Mostacci's firing, his administrator account was used to remotely log in to the villa's payroll system. Several changes were made to the ghost employees' data to make it appears as though they quit the day before Mostacci was fired.
If this was an attempt to hide the ghosts, it failed. The final paycheques for the fake employees were already processed and would leave a paper trail.
The money pit
Paycheques for the ghosts were deposited into a secret TD bank account in Mostacci's name twice a month - an account that was a clearing house for thousands of dollars every week.
A review of the TD bank records, obtained by The Spectator, found that money was going out of the account as fast as it was coming in. Each week, thousands of dollars were transferred to one of eight credit cards.
From 2015 to 2022, more than $650,000 was transferred to the credit cards, and nearly $450,000 was withdrawn in cash from the TD branch and ATM machines.
However, while the bank records indicate the type of credit cards - including a Capital One Mastercard, RBC Visa, Mastercard, and a Scotia Bank Visa - they do not specify details about the transactions, including purchases or withdrawals.
The account was also sometimes used to pay utility bills and a Rogers wireless bill.
While Mostacci was fired by the Sons of Italy on Jan. 4, the ghost employees were not discovered until a few weeks later by Mostacci's interim replacement, who found unclaimed pay stubs for two employees no one at the home had heard of.
The secret TD account was cleaned out in the two weeks following Mostacci's firing. From Jan. 12 to 25, three ATM withdrawals were made of $2,500 each, and a final ATM withdrawal was made on Jan. 31 for $1,740.
In his affidavit, Mostacci included a statement from his joint RBC account for Jan. 24 to Feb 24. That statement shows he paid $4,000 in taxes on Jan. 31, along with a $849 Rogers wireless bill, and put $1,483 on a Capital One credit card.
The RBC records in the affidavit do not contain enough information to determine if the Capital One credit card and Rogers Wireless account are the same ones found in the secret TD bank account records.
Mostacci's affidavit also does not provide bank records for the RBC joint account during the seven years the TD account was at its most active.
While he said he no longer had a source of income, the bank records in his affidavit show he was able to withdraw $12,000 from his Villa Italia RSP fund in late January. His assets, including the RSP fund, were frozen by the courts in March.
An empty wallet?
While Mostacci's lawyer, in an email to the Sons of Italy's counsel, said her client was shocked and vehemently denies the very serious allegations" against him, but no statement of defence was filed before Mostacci's death. His affidavit does not address the identity theft scheme.
Mostacci wrote he needed more time to mount a legal defence because his attention was focused on a series of medical appointments. However, he said while he would not ask for the overturning of the order freezing his assets, Mostacci wanted some access to the joint RBC bank account and his $123,000 RSP fund to pay his family bills and lawyers.
In the document, Mostacci guesses that his two-storey home on Hazelton Avenue in Hamilton, which he purchased in 2013 for $399,000, is worth around $800,000.
He also said he owned a 2012 Mercedes-Benz GL 450 which is probably worth about $10,000." Autotrader.ca and the Kelley Blue Book list that model of SUV selling for as much $24,000.
Missing from his list of assets is a 2017 Nissan Murano, which financial records obtained by The Spectator show Mostacci got a $23,500 loan for in 2020. That SUV can still be seen parked outside the Mostacci home.
He also says he is carrying $50,000 in credit card debt, but did not provide any supporting documentation.
In late March, a Hamilton judge granted Mostacci's request. Court documents show Mostacci was allowed a monthly allowance of $6,750 to be drawn from the joint RBC account, an amount that would drain the account in four months given its reported balance in the affidavit. It is not clear if the court permitted him access to his RSP fund.
However, the order freezing Mostacci's assets otherwise remains in place, meaning his family cannot sell any of it, and the judge also issued an order that allowed a computer forensics company to examine computer hard drives in the Mostacci home.
The legal case is continuing.
Grant LaFleche is an investigative reporter with The Spectator. Reach him via email: glafleche@torstar.ca