Canadian fashion mogul seeking bail on U.S. charges of sex trafficking, racketeering

WINNIPEG — Federal lawyers told a bail hearing Tuesday that they have serious concerns about two of Peter Nygard’s former employees who have offered to ensure the fashion mogul follows the rules if he is released.

Nygard was arrested in Winnipeg in December and is facing extradition to New York on nine charges, including sex trafficking and racketeering. The U.S. Attorney’s Office alleges that for 25 years Nygard targeted women and underage girls from disadvantaged economic backgrounds and forcibly sexually assaulted them.

The charges have not been tested in court and Nygard denies them. He is seeking release in Winnipeg, where he founded his fashion company, while the issue of his extradition is dealt with by the court.

One of Nygard’s former executives and a director of construction have offered to ensure he follows bail conditions if he is released while awaiting a hearing.

But Scott Farlinger, a lawyer for the Attorney General of Canada, told court his office is opposing release. He has said the 79-year-old Nygard has the means to flee and a history of not showing up to court.

Former Nygard executive Greg Fenske, who is still involved in the receivership of Nygard’s clothing companies, was the first to take the stand Tuesday.

Fenske doesn’t work directly for Nygard now, he testified, but pays himself through a numbered company that does consulting work for Nygard. That company purchased a $989,000 home suggested for Nygard if he is released on bail.

Fenske described his relationship with Nygard as mutually respectful, but said they never associated outside of business.

“He was my boss,” Fenske told court.

When asked about his continued support for his former employer, Fenske responded, “I believe in Mr. Nygard’s innocence.”

Farlinger asked about allegations by U.S. authorities that Fenske played a role in facilitating payments between Nygard and women who were allegedly abused.

“I wholeheartedly disagree with it,” Fenske responded.

He said Nygard would sometimes pay for dental or health treatments for assistants and models, but denied the recipients were girlfriends.

“Mr. Nygard was very generous though the years,” Fenske said.

Lawyers questioned why money meant for payroll moved into a separate consulting company that employs former Nygard staff, as well as a $60,000 overpayment to a utility company on the day before receivership. Fenske denied any malice in the action and said both situations have been rectified.

Lawyers also questioned Steve Mager, a former director of construction for Nygard International. He has put up his home as a surety for Nygard.

Mager testified he has two drug-related convictions. The last in 2012, for trafficking cocaine, resulted in a five-year sentence.

Court heard Mager met Nygard playing poker and was hired to do work on a Winnipeg property. He moved up in Nygard’s company and was quickly making $130,000 a year with full benefits until he lost the job in April.

Mager told court he still talks to Nygard daily.

“We are friends,” Mager said.

Nygard appeared in court by video and his face was projected on a large screen in the corner of the room. His long grey and white hair was tied up in a bun and he wore a blue mask, grey shirt and had a grey sweater draped over his shoulders.

Lawyer Jay Prober told court his client is an old man and should be released on bail because keeping him in jail where there are COVID-19 cases could be a “death sentence.”

Prober asked Mager to look at Nygard on the video screen in court.

“He looks like crap,” Mager said.

The bail hearing continues Wednesday.

This report by The Canadian Press was first published Jan. 19, 2021.

Kelly Geraldine Malone, The Canadian Press