After being charged by the Travel Industry Council of Ontario (TICO), Albarkah Travel and Tours Inc. was convicted on eight counts of failing to deposit consumer money into a trust account and three counts of failing to issue receipts to consumers, TICO wrote in a news release on Wednesday (May 18).
Additionally, Mahmood Bashir was convicted of one count of being an officer or director and failing to take reasonable care to prevent the corporation from committing an offence.
The Court found that Albarkah Travel and Tours Inc. routinely purchased travel services from travel wholesalers on credit instead of paying for those purchases using the funds received from customers.
Instead of depositing consumer payments into a TICO-designated trust account, Albarkah Travel and Tours Inc. used consumer payments to pay down an existing business debt, TICO said.
"This misappropriation of consumer funds resulted in consumer loss after Albarkah Travel and Tours Inc. declared bankruptcy. The Travel Industry Compensation Fund reimbursed 63 consumers of Albarkah Travel and Tours Inc. more than $277,000," TICO said.
Mahmood Bashir has been sentenced in Court to a two-year probation and is prohibited from applying for or engaging in activities as a registered Travel Agent, as defined in the Travel Industry Act, 2002. Mahmood Bashir was also sentenced to 200 hours of community service.
The court ordered Albarkah Travel and Tours Inc. to pay $25,000 in restitution to the Travel Industry Compensation Fund, on top of the $25,000 in restitution that has already been paid.
In addition, TICO has recovered more than $68,000 from wholesalers who extended credit to Albarkah Travel and Tours Inc. for travel services, which was not compliant with trust accounting rules.
These funds partially offset payouts to consumers with eligible claims against the Travel Industry Compensation Fund.