Canadian fashion mogul Peter Nygard continued efforts to seek bail in a Winnipeg courtroom Tuesday following his arrest last month in an extradition case involving U.S. charges of sex trafficking and racketeering.
The special sitting is expected to last two days.
Nygard, who is 79, was arrested in December under the Extradition Act and faces nine federal counts filed in the Southern District of New York. He attend Tuesday’s hearing via a video link.
The hearing is before Justice Shawn Greenberg. Scott Farlinger, for the Attorney General of Canada, is appearing in person and Jay Prober, representing Nygard, is appearing by phone.
Two witnesses, who both pledged themselves as sureties to Nygard fleeing should he be let out on bail, were heard Tuesday, including Greg Fenske and Steve Mager.
Authorities in the U.S. accuse Nygard of using his influence in the fashion industry to lure women and girls with the promise of modelling and other financial opportunities.
Documents from the U.S. Attorney’s Office allege Nygard frequently targeted women and underage girls from disadvantaged economic backgrounds with promises of modelling and other financial opportunities.
They allege the criminal conduct occurred over 25 years and involved dozens of women in the United States, the Bahamas and Canada, among other locations.
Nygard’s long grey and white hair was tied back into a neat bun on the back of his head, and was wearing a grey shirt with a grey sweater draped over his shoulders. He was also wearing a blue disposable face mask.
About 10 media members were in the room, which normally seats 100.
Prober has said his client denies the allegations. He has blamed the accusations on a feud with his billionaire neighbour in the Bahamas.
The first to be questioned was Fenske, a former Nygard executive, who lost his job as the company went into receivership in March 2020. Fenske told the court he doesn’t work directly for Nygard now, but pays himself through his consulting firm.
The numbered company doesn’t have a source of income right now, he said, adding he rents a home with his family.
Through the numbered company, Fenske said he has purchased a home, which he has offered to be the place Nygard could live if released on bail.
Court heard how the house was purchased to provide space and privacy for Nygard. The money was sent to Fenske’s numbered company as part of a $1-million consulting fee that Farlinger suggested came from Nygard through a company called Edson’s.
Fenske reiterated multiple times in court that he doesn’t know who owns Edson’s.
“This is ultimately Mr. Nygard’s money,” Farlinger responded.
Fenske also described his current full-time job as dealing with the Nygard receivership.
When asked about his relationship with Nygard, Fenske described it as “mutually respectful.” He said they worked closely for about four years prior to receivership but never associated outside of business.
“He was my boss,” Fenske said.
He assured the court he would make sure Nygard stayed home by visiting daily, calling the landline in the house and through motion-detection cameras at the entrances and exits.
He also said if he saw Nygard going against bail conditions he would call police. The house is where Nygard was arrested in December.
When asked why he’s taken the steps to support Nygard, Fenske said “I believe in Mr. Nygard’s innocence.”
Fenske was also questioned about the decision, when he was still a Nygard executive, to move $500,000 to Edson’s the day before a court order was due to move those funds out for payroll to Nygard employees.
“There was a court order and the Nygard companies chose to ignore it,” Farlinger suggested.
Fenske said the decision was made at Nygard’s request but suggested it wasn’t done in malice and had been figured out with the receiver by September.
There was also questioning about a decision to transfer the ownership of vehicles to Nygard employees just before the receivership happened. Fenske said Mr. Nygard wanted to “recognize certain employees” who were unable to get their usual bonuses.
Those employees were sold the cars at “a very favourable price,” said Fenske, including Fenske himself and his son. Mager, the other man who is a surety got a truck.
Farlinger also criticized Fenske’s description that Nygard was left with almost nothing since his Bahamas resort has an estimated value at $40 million USD.
Later Farlinger asked about Fenske being named by U.S. authorities in allegations that Fenske himself played a role in facilitating payments between Nygard and alleged victims.
“I whole heartedly disagree with it,” Fenske responded.
Fenske said Nygard made the decision for the payments which were for assistants or models to get things like dental treatment.
Fenske said he would never have assigned the people who received this help for dental and medical services the title girlfriends.
“Mr. Nygard was very generous though the years,” Fenske said.
Fenske said it was always Nygard’s decision to provide the financial help, and Fenske just helped him to ensure he knew how much was being charged.
Later in the afternoon Steve Mager, another associate previously employed by Nygard who has offered to act as sureties if he is released, took the stand.
Mager is currently unemployed after losing his previous job as director of construction for Nygard International when the company went into receivership in April.
Court heard has a criminal record. He pleaded guilty in 2002 and was conviction of possession for the purpose of trafficking. He was also convicted in 2012 and sentenced to five years for trafficking cocaine.
Mager told court he met Nygard playing poker. They talked about Nygard needing Mager to do some work on one of his Winnipeg properties.
Mager told court he still talks to Nygard daily, and visited him daily prior to his arrest.
“We are friends,” Mager said.
Farlinger asked Mager about people coming and going from the house prior to Nygard’s arrest, specifically two women that RCMP saw in attendance in December. He asked if Mager was concerned about the risks people coming to the house would have on Nygard’s health.
Mager said there was hand sanitizer in the house, and people wore masks and didn’t have direct contact with Nygard, when Prober took over questioning.
Mager also said the the woman spotted by RCMP could have been a health-care aid who stopped by.
Prober and lawyer Richard Wolson said earlier this month that Nygard is in poor health and that he is at particular risk for contracting COVID-19 in jail.
“In effect, to delay this matter is to play Russian roulette with this health,” Wolson said.
“It’s clear that he is a prime candidate to contract COVID. And if he were, the outcome would be a very serious one. According to the evidence, that would be before the court, COVID would likely kill him.”
Lawyers for the Attorney General of Canada say Nygard has a history of not showing up to court and has the means to flee.
Prober said Nygard wasn’t a flight risk and even offered to turn himself into Winnipeg police earlier in 2020.
The fashion mogul is also the subject of a class-action lawsuit in the U.S. with similar allegations involving 57 women, including 18 Canadians. It alleges Nygard used violence, intimidation, bribery and company employees to lure victims and avoid accountability for decades.
Two of Nygard’s sons filed a separate lawsuit against him months later claiming they were statutorily raped at his direction when they were teens. The sons allege Nygard arranged for a woman to have sex with them.
The hearing is scheduled to resume again Wednesday at 10 a.m. CST.
— with files from Brittany Greenslade and the Canadian Press