An Ontario judge has ordered the freezing of assets belonging to a man accused of defrauding his close friend of over $350,000 in a complex investment dispute involving overseas transfers to Europe1. The ruling comes from the Superior Court of Justice where Justice Sunil S. Mathai granted an interlocutory Mareva injunction against Danny Risteski. The decision allows the plaintiff, Slave Paunovski, to secure potential recovery of funds while the lawsuit proceeds toward trial. The court found that Mr. Paunovski had established a strong prima facie case of civil fraud against Mr. Risteski and that there was a serious risk that Mr. Risteski would dissipate his assets to avoid paying a potential court judgment.
The dispute centers on a relationship that was once deeply personal. According to court documents, Mr. Paunovski and Mr. Risteski were formerly very close and described their relationship as being like brothers. This bond of trust formed the foundation for the financial transactions that are now the subject of litigation. Mr. Paunovski alleges that he was induced to invest his life savings based on false representations made by Mr. Risteski regarding a lucrative investment opportunity in Europe. The plaintiff claims that Mr. Risteski promised the investment was risk free and would generate substantial returns to aid in his retirement.
The financial entanglement began in December 2015 when Mr. Paunovski provided $200,000 to Mr. Risteski. The plaintiff alleges he was told this money would yield high returns, potentially turning the initial sum into one million dollars. Mr. Risteski allegedly assured him that if the investment failed, the principal amount would be returned. Instead of generating profits, the funds were allegedly transferred to a third party named Aleksandr Ninosevic in Europe. Years passed without any return on this initial capital, yet the financial requests did not cease.
In 2021, Mr. Paunovski advanced an additional sum of approximately $159,493. The court heard evidence that Mr. Paunovski made this secondary payment because he was told it was necessary to secure the return of his original 2015 investment. The plaintiff testified that Mr. Risteski told him the initial investment had encountered difficulties and that further funds were required to recover the money. Relying on the trust he placed in his friend, Mr. Paunovski transferred a portion of these new funds directly to Mr. Ninosevic in Europe and the remainder to Mr. Risteski’s European bank account.
Mr. Risteski denied the allegations of fraud. In his defense, he claimed that he merely facilitated an introduction between Mr. Paunovski and Mr. Ninosevic after learning of an investment opportunity involving oil and gas. Mr. Risteski asserted that he made no guarantees regarding returns and that he, too, was an investor who had lost money with Mr. Ninosevic. He argued that he was a victim rather than a perpetrator and that Mr. Paunovski had invested his money voluntarily with full knowledge of the risks involved.
Justice Mathai scrutinized the evidence presented by both sides to determine if the strict legal test for a Mareva injunction was met. A Mareva injunction is considered an extraordinary legal remedy that freezes a defendant’s assets before a trial concludes. To obtain such an order, a plaintiff must demonstrate a strong prima facie case of fraud and prove there is a real risk that the defendant will hide or deplete assets to render a future judgment worthless.
The court identified significant credibility issues with Mr. Risteski’s account of events. Justice Mathai noted numerous inconsistencies between Mr. Risteski’s sworn affidavit and the answers he provided during cross-examination and examinations for discovery. One major point of contention was whether Mr. Risteski had actually invested his own money. While he claimed in his affidavit to have invested nearly $300,000 personally, he explicitly stated during discovery that he had never invested with Mr. Ninosevic. When confronted with this contradiction, Mr. Risteski offered no compelling explanation.
Further credibility issues arose regarding how the funds were handled. Mr. Risteski claimed the 2015 funds were deposited into a joint account shared with his wife and then wired to Europe. However, he failed to produce the relevant bank statements to corroborate this claim, despite the litigation having commenced in 2022. The court found it troubling that no documentation existed to prove the plaintiff’s funds were ever actually invested in any legitimate vehicle. There were no statements showing the purchase of shares, oil and gas interests, or any other asset.
The judge also highlighted the illogical nature of Mr. Risteski’s continued financial relationship with Mr. Ninosevic. Evidence showed that Mr. Risteski continued to transfer large sums of money to Mr. Ninosevic well after the investments had supposedly failed to generate any return. The court questioned why anyone would continue to send money to an investment contact who had provided no documentation and no profits for several years. Justice Mathai concluded that these transfers were likely not for legitimate investment purposes and contributed to the finding of a strong prima facie case of fraud.
Beyond the allegations of fraud, the court examined whether Mr. Risteski was actively dissipating his assets. The plaintiff pointed to several suspicious financial moves. In January 2025, Mr. Risteski and his wife sold their matrimonial home on Greenwood Avenue in Toronto for over one million dollars. They subsequently moved into a property owned by their daughter and son-in-law. A portion of the proceeds from the home sale was used to pay off a debt owed by a company called Donco Investments Ltd., which is owned by Mr. Risteski’s wife. The court viewed this transfer of personal funds to the corporation as an attempt to move assets out of the plaintiff’s reach.
Additionally, the court found that Mr. Risteski had taken out a high-interest loan of $25,000 at an interest rate of 34.6 percent in April 2025. This occurred shortly after an interim court order had already frozen his assets. Mr. Risteski could not clearly recall how all the loan proceeds were spent during his cross-examination. The judge inferred that taking out a loan with such punitive interest rates, rather than applying to the court to access frozen funds for legal expenses, demonstrated an intention to dissipate remaining assets.
While the injunction was granted against Mr. Risteski, the court dismissed the motion as it related to his wife, Mara Risteski, and her company, Donco Investments Ltd. The plaintiff had argued that Ms. Risteski and her company were liable for knowing receipt of the defrauded funds. However, Justice Mathai found that while Ms. Risteski knew the money had been deposited into their joint account, there was insufficient evidence to prove she knew about the fraudulent representations her husband allegedly made to secure that money.
The court noted that Ms. Risteski was not involved in the conversations between the two men in 2015 and only became involved in 2021 when the plaintiff was seeking the return of his funds. Consequently, the judge ruled that the plaintiff had not established a strong prima facie case against her or her company. However, because the injunction applies to Mr. Risteski, it effectively freezes assets held jointly by the couple, such as their joint bank accounts. The court order permits Ms. Risteski to open a new, separate account for her pension and disability benefits, which will remain unaffected by the freezing order.
A procedural hurdle nearly derailed the plaintiff’s motion before the merits were even considered. The plaintiff’s legal team had set the action down for trial before the motion for the injunction was heard. Under Ontario’s Rules of Civil Procedure, specifically Rule 48.04, a party is generally prohibited from bringing motions after signaling they are ready for trial unless there is a substantial change in circumstances. The defense argued that the motion should be dismissed on this technicality.
Justice Mathai acknowledged that setting the matter down for trial was likely a procedural error by the plaintiff’s counsel rather than a strategic move. The court exercised its discretion to allow the motion to proceed in the interests of justice. The judge reasoned that denying leave to hear the motion would cause significant prejudice to Mr. Paunovski. If the defendant was indeed dissipating assets, as the evidence suggested, refusing to hear the motion on a technicality could render any future trial judgment meaningless because there would be no assets left to collect.
The outcome of this ruling is that Mr. Risteski is legally barred from selling, transferring, or diminishing his assets up to the value of the claim while the lawsuit continues. He is, however, permitted to access a specified amount of funds for ordinary living expenses and legal fees. This ensures that he can defend himself in the ongoing litigation while protecting the plaintiff’s potential recovery.
The case serves as a cautionary tale regarding informal investment arrangements between friends. The lack of formal documentation, such as investment contracts or prospectuses, combined with the reliance on personal trust over due diligence, created a complex evidential record that the court had to untangle. The litigation is ongoing, and the allegations of fraud and breach of contract will ultimately be decided at a future trial. For now, the assets remain frozen, securing the status quo until the court can make a final determination on the merits of the case.
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