Snow covers the site of the old sawmill site in Temiskaming Shores, Ont., on Dec. 17.Colin Freeze/The Globe and Mail
The abandoned pulp-and-paper factory on Temiskaming Shores’ waterfront is a reminder of the town’s history producing particle board. It also now serves as a reminder of how the protection of a community’s drinking water was entrusted for more than a decade to reputed serial fraudster Arash Missaghi.
Mr. Missaghi purchased the land on which the factory sat for $2 in 2012. But the paltry price tag came with a commitment by the Toronto man and the corporation that he controlled, Mansteel New Liskeard Inc., that a reserve of several millions of dollars would be deployed to ensure the hazardous chemicals on the site did not run into the local creeks that drain into Lake Temiskaming.
In 2015, three years after the purchase, police in the Northern Ontario town arrested Mr. Missaghi and accused him of fraud. Prosecutors alleged in court that Mansteel accessed the reserve money without doing the required cleanup work, while leaving contractors unpaid in the process.
That case came at the same time that various regulatory bodies in Toronto were faulting other companies connected to Mr. Missaghi for a number of other illicit schemes. They included funneling the retirement savings of scores of people into mortgage mega-loans for Missaghi-controlled properties – including the Temiskaming industrial lands, which were being touted at the time as a multimillion-dollar opportunity. They did not get their promised returns.
And Mr. Missaghi was penalized for none of it.
A Globe and Mail investigation this month revealed Ontario police charged Mr. Missaghi with at least 72 crimes, mostly frauds but also several violent offences, between 2000 and 2021. Prosecutors never won a single criminal conviction against him in court. This track record of futility includes the nine fraud-related counts laid in 2015 against him involving the Temiskaming Shores industrial site.
Mr. Missaghi was shot and killed in his office this past June by a man who was the victim of another Missaghi-led mortgage investment fraud. The gunman then killed himself.
Provincial officials say they are now managing the environmental threats posed by the Temiskaming Shores site, but they have no plans to take over the land.
“Leachate is being controlled by a vendor retained by the ministry to ensure there is no risk to people and the environment,” said Lindsay Davidson, a spokesman for the Ontario Ministry of the Environment.
“The ministry is not the owner of the site and does not have the power to expropriate the land,” he said.
But in Temiskaming Shores, no one knows who – if anyone – would want to take over the land.
The town’s mayor, Jeff Laferriere, said the sawmill site should be reimagined as a public park, but instead it is a case study in lingering contamination and delayed environmental enforcement.
Leadership, long-term planning and funding are needed, he said. “Lake Temiskaming, it’s beautiful to look at, but if this lake turns contaminated – you have just destroyed this whole region.”
To protect the town’s water supply from the hazardous chemicals that can seep from the old sawmill’s hilltop landfill, large leachate ponds and pumps were put into place decades ago to channel the runoff into liquid waste that can be hauled away.
But provincial inspectors have long expressed worries these systems have been degrading, a problem Mr. Missaghi’s purchase of the property, and the attached cleanup funds, were supposed to address.
Instead, records show Mr. Missaghi was routinely sanctioned for breaking environmental laws between 2014 and 2024.
Inspectors who went to the site wrote reports accusing Mr. Missaghi of not fulfilling his obligation to address the contamination, highlighting issues that included overfilling leachate ponds, frozen or broken pumps, seeping discharges from leachate pipes, and a spill found to be “acutely toxic to aquatic organisms.”
Records filed in tribunals and courts show Mr. Missaghi hired contractors to do some environmental work, but the work often went unfinished under his watch. Several contractors complained remediation work and groundwater monitoring went uncompleted because Mr. Missaghi did not pay them.
Over the years, environmental officials convicted Mr. Missaghi of non-compliance infractions, failing to live up to work orders, and breaking clean-water laws.
In response, Mr. Missaghi wrote back complaining the province’s orders were imposing “undo” costs and arguing he was taking corrective steps.
But provincial officials replied in turn that Mr. Missaghi did not supply proof, that many of his promises were at odds with official inspections, and that his leachate-management equipment was often broken down, offline or malfunctioning.
“The discharge from the sewage works is likely to injure, damage or endanger water,” reads an official Ministry of the Environment finding.
Provincial police laid charges in 2015 against Mr. Missaghi, alleging he violated the purchase agreement he crafted with the site’s former owner. That deed had come with obligations, including stewardship of the multimillion-dollar cleanup funds set aside to fulfill provincial cleanup orders.
“Upon completion of the sale, $3.5-million plus $455,000 in HST – known as the environmental lump sum – was released to Mansteel New Liskeard Inc.,” said prosecutor Serge Hamel during Mr. Missaghi’s bail hearing.
Mr. Hamel told the court the purchase agreement also gave control to Mansteel of a separate, arm’s-length $2.5-million fund, one held in a third-party escrow account that was to be released upon completion of all necessary work.
“Members of Mansteel New Liskeard Inc., which includes Mr. Missaghi and the other co-accused, secured $1.191-million of the escrow fund by submitting fake accounts to the escrow agent,” Mr. Hamel said at the 2015 bail hearing.
The Crown attorney added that “essentially the police view is that the intent was simply to get the money and not to pay any of a number of contractors.”
But like all the other criminal charges against Mr. Missaghi over 25 years of alleged fraud schemes, the criminal case in Temiskaming Shores melted away. The charges against Mr. Missaghi and his co-accused – including his wife, Laila Alizadeh, and two alleged associates – did not get past the pretrial phase, in part because a court concluded matters were likely more suited for civil litigation.
The criminal case ended in 2017 with a plea deal arrangement where Mansteel pleaded guilty as a corporate entity to two counts of fraud. Five years later, in 2022, the provincial government levied a $330,000 fine for breaches of environmental laws against Mr. Missaghi and Mansteel. Officials will not say whether this fine was ever paid.
Today, one local contractor who says he was bilked by Mr. Missaghi remains mystified why a company – but never any individual – was held accountable in criminal court.
“What good is that?” said Alan Jenkins, now retired. “Our court system let us down.”
Speaking to The Globe at his home in Temiskaming Shores, Mr. Jenkins recalled how Mr. Missaghi hired his excavation company to dig out new leachate ponds in 2014. The contractor said he is still owed $250,000 for his work, funds he has never recovered despite instigating a civil suit against Mansteel and being named as a victim in the failed criminal case.
In an interview, Mr. Jenkins said prosecutors never invited him to court nor told him why their case collapsed.
“There’s a mountain of contamination,” he said, later adding, “Where did the money go?”
This July, a few weeks after Mr. Missaghi’s killing, the Ministry of the Environment said in a public notice that it had notified his estate that it would take over available remaining cleanup funds in an effort to forestall potential disasters.
The government was told by a lawyer representing Mr. Missaghi’s company that money had run out to operate the leachate system, the bulletin had said.
“Once operation of the leachate management system ceases, it is expected that the pump stations will imminently overflow, resulting in an uncontrolled discharge of untreated, toxic landfill leachate to Dixon Creek, a tributary of Lake Temiskaming,” it said.
Federal New Democrat Charlie Angus, a member of Parliament who represents a neighbouring Northern Ontario riding, said Ontario’s Progressive Conservative government needs to act urgently to correct for years of lax law enforcement by taking greater stewardship of the polluted lands and their cleanup. “It’s an environmental disaster zone right in the centre of a small community,” he said.
With reports from Stephanie Chambers
Editor’s note: A previous version of this article incorrectly stated that Charlie Angus is the local member of parliament. He represents a neighbouring Northern Ontario riding. This version has been updated.