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Former Canadian prime minister loses court case
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Brian Mulroney was accused of accepting money to help establish an arms factory in Canada but not following through on his business promises
AP, OTTAWA
Sunday, Jul 29, 2007, Page 7
Former conservative Canadian prime minister Brian Mulroney has been ordered by a court to pay C$470,000 (US$444,000) to former business associate Karlheinz Schreiber.
Schreiber, a German-Canadian businessman who is fighting extradition to Germany where he faces tax evasion, fraud and bribery charges, sued Mulroney to recoup C$300,000 in cash the businessman said he had handed to the former prime minister during meetings in New York and Montreal in 1993 and 1994. Mulroney had already left politics at the time.
Schreiber said he paid Mulroney the money to enlist his help in establishing an arms factory and a pasta business, both in Canada.
The lawsuit claimed Mulroney did not follow through on his business commitments.
Mulroney failed to respond to the lawsuit before the deadline, which meant that the court ordered him this week to pay Schreiber the C$300,000, plus C$170,000 in interest.
Mulroney's lawyer, Kenneth Prehogan, said the ruling would not stand on appeal because the Ontario Superior Court of Justice has no jurisdiction to consider the lawsuit.
The former prime minister's lawyers did not file a defense because they believe the case should be argued in a Quebec court.
Mulroney served as Canada's prime minister from 1984 to 1993.
German prosecutors allege that Schreiber avoided income tax on C$45.6 million in commissions for brokering sales of arms.
Schreiber worked as a lobbyist, consultant and dealmaker in the sale of aircraft and arms.
Schreiber was arrested in Canada on Aug. 31, 1999, for extradition and has been out on bail since shortly after his arrest.
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