Michael Elphicke (right) leaves the Penticton Law Courts for lunch hour on the first day of trial. Elphicke took the stand for the first time on Monday, two weeks into the three-week trial. (Dustin Godfrey/Western News)

Alleged Okanagan hockey fraudster takes the stand

Michael Elphicke is one of two men accused of fraud and theft in a failed hockey trip to Europe

A man standing trial over a major Penticton fraud case told the court he expected to personally gain over $74,000 from a failed youth hockey trip to Europe.

Michael Elphicke, one of two men charged with fraud and theft over $5,000 and managing an unauthorized lottery scheme, took the stand for the first time in his trial, two weeks into the hearings.

Related: Elphicke expected to testify on Monday

Elphicke, now 51, told the court despite living in Winfield at the time of the alleged offence, and business partner Loren Reagan being based out of Calgary, the Okanagan Elite Hockey Association was operated out of Penticton due to Reagan’s hockey parent contacts at the Okanagan Hockey Academy.

He said he first met Reagan — currently allegedly living in Kuwait — in February or March of 2011, with both of their kids playing hockey.

Elphicke said he enjoyed the company of Reagan when the two first met, and they continued to meet for beers and to talk about hockey, leading up to Reagan taking Elphicke’s son to a hockey tournament in Whistler in May 2011.

Related: Loren Reagan skates off on hockey fraud trial

Shortly following that trip, the European hockey trip first came up, as Reagan reportedly showed Elphicke and his wife some pictures from a trip he had taken in the past.

At around that time, Elphicke, a diabetic with increasing health complications and now on dialysis treatment, said he was feeling too sick and not in a financial position to attend a European hockey trip. But he and his wife eventually decided to sign on with the trip, according to Elphicke, with the pair expected to take a major role in organizing the trip to offset the pricey cost.

Much of Elphicke’s morning testimony revolved around a meeting between him, his wife and Reagan in Elphicke’s backyard in May 2011, shortly after the Whistler tournament. In that meeting, Reagan reportedly pitched the tournament to the Elphickes.

Related: Elphicke painting Penticton hockey fraud as one-man scam

At the time, the group expected to see three teams of around 54 travellers — 18 kids plus two parents each — joining the trip, at a total revenue of around $891,000

Elphicke said the trip had always been planned as a for-profit venture, and that the Elphickes and Reagan were always expected to take in a personal income to make the trip “worth our while.”

So, while the projected revenue was just shy of $900,000, the trip — at its base — was expected to run $726,000. There were other expected costs including:

“I think profit was something like $160,000, of which we all agreed that 50 per cent of that profit could be spent during and before the trip, and the other 50 per cent would be dispersed to the three partners equally at the end of the trip when we came home,” Elphicke told the court.

Related: Elphicke reportedly took $17,000 of hockey funds

Upon inspecting the records of the group’s initial meetings, in which they outlined a budget, Elphicke noted the expected revenue was just under $189,000.

Reagan was expected to take half of that, while the Elphickes were each expected to get 25 per cent, with a portion of each of their profits to go toward funding their trip. Initially, administrative fees — the trio’s profits — were set at 15 per cent, but the group later adjusted that to 20 per cent.

While Reagan was paying for three people to go on the trip, making a total of $83,000 in profit after the trip expenses, while the Elphickes, paying for five people to go, would make around $74,000 after expenses.

Related: Alleged hockey fraudster ‘embarassed’ widow

But evidence outlined by a federal government forensic accountant indicated by January 2012, Reagan had spent $82,000 between himself and a failed hockey dorm project he was working on at the time, while the Elphickes had spent around $17,000.

In total, Reagan’s spending went not only over his allocated 50-per-cent mark to spend before the trip, but almost hit his projected personal profit altogether. Between all three, the $99,000 spent was over the 50-per-cent mark, though Reagan carried the vast majority of that overt spending.

While the group had paid their initial $15,000 deposit to trip planners Azorcan Global Tours, when time came to make their next payment, just $13,000 remained in the bank accounts, leading to the demise of the trip and the OEHA.

Although numerous hockey parents have suggested on the witness stand that they never knew the three partners were expected to profit from the venture, Elphicke’s lawyer James Pennington pointed to documents handed to parents, which mentioned a “to be determined” administrative fee.

Related: Hockey parent takes the stand in fraud trial

“So that everybody knew that there was a fee being directed to our business for the administration of this program,” Elphicke told the court, when asked why he put the “to be determined” line in the documents.

Elphicke’s trial is expected to wrap up this week.


@dustinrgodfrey

dustin.godfrey@pentictonwesternnews.com

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