An Ontario court is seeking the arrest of a Quebec man at the centre of a legal battle over a $9.8-million digital heist from FACTOR, the taxpayer-funded non-profit that feeds the Canadian music industry.
In the case’s most dramatic development since the money disappeared from FACTOR’s Bank of Nova Scotia account in June, 2024, Justice William Black of the Ontario Superior Court of Justice has found James Campagna in contempt of court and sentenced him to 30 days incarceration.
“I find that Mr. Campagna is a liar, a fraud, and a scofflaw, deliberately and knowingly breaching this court’s orders,” Justice Black wrote in his decision late Monday. He added: “It is highly likely that he was a knowing and active participant in the fraud, and that he has benefitted and continues to benefit from the proceeds of that fraud.”
In an e-mail to The Globe and Mail Tuesday morning responding to Justice Black’s ruling, Mr. Campagna said: “Great neutrality on display here. This judge has clearly made a decision already on this case (it was clear to me anyway before this) and is playing crowd pleaser. No point spending another 500k in lawyers uselessly then.”
Court documents show that Mr. Campagna is the sole shareholder of a numbered company (10426377 Canada Inc.) that does business as Vipera. In June, 2024, transcripts and screenshots show, he arranged a transaction for FACTOR to buy bitcoin-mining machines using documentation with incorrect contact information for FACTOR, which coincided with the $9.8-million transfer into Vipera’s Scotiabank account.
The (alleged) anatomy of the $10-million heist that rocked Canadian music
It is not clear who generated the invoice for the transaction. Most of the money was eventually converted to cryptocurrency and dispersed among many wallets. The court has not named anyone responsible for the theft, and no one has been charged. FACTOR has alleged that Mr. Campagna and Vipera, “alone or together with a cybercriminal or cybercriminals,” stole its money. Mr. Campagna has said in a filing that he and his company “vehemently” deny being behind the theft.
The case is likely the biggest heist in the Canadian music industry’s history. In its long-running legal battle to unpack what happened and recoup its money, FACTOR’s lawyers have been pressing for Mr. Campagna to be held in contempt of court for months.
They insist in a filing that the Quebecker has “failed or refused to comply” with orders from Justice Black to produce documents including correspondence, corporate financial statements and banking information. Justice Black has also sought to access the contents of a laptop used by Mr. Campagna that he claims was damaged during his travels to Europe. In his decision this week, he likened the reasoning of Mr. Campagna’s approach to court-compelled obligations to “the dog ate my homework.”
In his e-mail, Mr. Campagna said that he had “provided everything they have asked for which I have access to and paid tens of thousands to investigate myself as per the court’s demands. Some material is completely out of my control, and some cards and accounts are not even under my name.”
It may be difficult to get Mr. Campagna into a Toronto courtroom, even with the new court order. FACTOR lawyer Milton Davis, of Fogler, Rubinoff LLP, also told Justice Black at a hearing Friday that “the lay of the land is that Mr. Campagna appears to have fled the jurisdiction.”
Mr. Campagna’s Instagram profile has shown him in recent months in Doha and Dubai. An affidavit from a private investigator hired by FACTOR says that Mr. Campagna and his family moved to Qatar last August, and that they have registered their children for school there. “I have a career and opportunities abroad, and staying in Canada is not cutting it,” Mr. Campagna said by e-mail.
There is generally time between a contempt-of-court finding and a penalty decision to give the person in question the chance to purge or mitigate the contempt. But Justice Black wrote in his decision that he recognized Mr. Campagna “has taken active steps with a view to putting himself beyond the reach of the court.” He added: “There should therefore be plenty of time, once my order comes to his attention, within which Mr. Campagna can take steps to purge his contempt.”
Meanwhile, court records also show that Miller Thomson LLP, the long-standing lawyers for Mr. Campagna and his company, withdrew their services in December. A filing says that the clients had “refused, and/or neglected or are unable to pay accounts for services rendered.” He said by e-mail that he was debating finding new representation, but that the contempt order was “bleak” and “I will most likely opt to defend myself.”
Despite Mr. Campagna’s non-payment, Justice Black highlighted details from FACTOR’s legal submissions, which note that he paid for trips to Italy and Dubai in the months since he became part of the civil case – and “seven days after the fraudulent transfer, purchased a Chanel bag for over $5,000.”
FACTOR is seeking the restitution of its missing money. A lawyer for the Bank of Nova Scotia, another party that FACTOR is also pressing to compensate it for its loss, told Justice Black Friday it supported FACTOR’s motion to hold Mr. Campagna in contempt of court.
Justice Black awarded FACTOR $150,000 in costs for the motion to find Mr. Campagna in contempt of court. He also struck the evidence presented by Mr. Campagna, his company, and his expert witness from the record.
The Toronto Police Service was investigating the theft until recently. But a spokesperson told The Globe Friday that the force recently passed the case to the Service de police de la Ville de Montréal, which said that for confidentiality purposes it does not confirm whether a person or organization is under investigation, except in exceptional circumstances.
FACTOR, or the Foundation Assisting Canadian Talent on Recordings, distributes funding from Ottawa and private radio broadcasters to the English side of the music industry, amounting to about $30-million each year.
Justice Black’s decision, granted after a brisk 12-minute hearing Friday, came nearly two years after court documents allege that a “cyberthief” first gained access to FACTOR’s Scotiabank account, logging in routinely for months. That person then transferred out the millions just days after the Department of Canadian Heritage deposited $14.3-million to distribute to the music industry.
Last April, a court filing revealed that a third-party review of the web history of FACTOR accounting manager Marina Anianova had found that she had “clicked on a link to a malicious website masquerading as Scotiabank’s client portal and she provided Factor’s Scotiabank account login and password details.” This happened just months before the cyberthief first gained access to FACTOR’s account.