StateView Homes founders sue former CFO for alleged $37M fraud

Two brothers who founded a now-collapsed Ontario home builder are suing its former chief financial officer, accusing the longtime family friend of orchestrating a $37-million fraud that caused the company's downfall, court documents show. 

Carlo and Dino Taurasi, who founded Woodbridge-based StateView Homes in 2010, accuse Daniel Ciccone of conducting a yearlong "cheque-kiting scheme," involving hundreds of bad cheques, 22 accounts at two banks and forged signatures, according to a statement of claim filed in April with the Ontario Superior Court of Justice in Toronto.

The alleged scheme took place between April 2022 and March 2023.

The brothers say Ciccone wrote "hundreds and perhaps thousands of unauthorized cheques" drawing from inactive Royal Bank of Canada (RBC) accounts related to old projects.

According to the claim, he allegedly deposited the cheques into TD Bank accounts, then stopped payment on them — after TD provisionally credited the accounts and before the funds were transferred from RBC.

"Mr. Ciccone exploited TD's and RBC's failure to provide any or sufficient safeguards against cheque kiting schemes to perpetrate a $37-million fraud on the Taurasi business accounts," the claim states. 

None of the allegations have been tested in court. Ciccone has indicated in a court filing he intends to defend against the action, but hasn't yet filed a statement of defence. Ciccone does not face criminal charges. His lawyer declined further comment. 

The claim alleges Ciccone used the funds for "unknown purposes" and that he covered the overdraft with legitimate funds or through more cheque-kiting.

The lawsuit also names RBC and TD Bank as defendants, arguing the financial institutions allowed the kiting to continue for a year without detection. And it argues that the Taurasis, who were the account holders, should have been informed earlier.

"Due to RBC's and TD's negligence, Mr. Ciccone was able to defraud the Taurasi business accounts … causing the complete collapse of StateView's business and significant personal liability for Carlo and Dino."

Spokespeople for TD and RBC said the banks can't comment while the case is before the courts.

The alleged cheque-kiting scheme was made public last April when TD Bank filed a lawsuit against StateView Homes and 25 associated companies, seeking to recoup the overdrafted $37 million.

At the time, the brothers said they had no involvement in Ciccone's "wrongful conduct" and had fired him. StateView entered into a settlement agreement to begin paying back the money immediately.

In response, four of StateView's major creditors successfully petitioned for the appointment of a receiver to recover their outstanding loans.