The first day of Peter Nygård’s bail hearing wrapped up Tuesday with its share of fireworks.
Nygård is facing a nine-count indictment in the Southern District of New York that includes sex trafficking and racketeering charges. He was arrested on Dec. 14 at the request of U.S. officials, who are seeking the extradition of Nygård. Dozens of women have accused him of varying degrees of criminal behavior, including rape and sexual assault, over a 25-year period. Some of the alleged incidents were said to have occurred to individuals who were minors at the time.
Prior to what is scheduled to be a two-day hearing in Manitoba Court of Queen’s Bench, Nygård was deemed a potential flight risk, partially due to his potential access to assets.
Nygård appeared by video and an image of him was projected onto a 10-foot by 10-foot screen on one of the walls to the right of where the judge was seated, according to a pool report. He is still being held at the Headingley Correctional Center in Winnipeg.
Wearing a light blue mask and a gray shirt and with a gray sweater draped over his shoulders, Nygård’s long gray hair was tied back in a bun on the back of his head, “much neater and tighter than in other appearances,” the pool report noted, adding that Nygård “touched the mask multiple times, playing with its straps and moving it a bit on his face.”
The hearing is before Justice Shawn Greenberg. Representing the attorney general of Canada, attorney Scott Farlinger appeared in person, and Nygård’s attorney Jay Prober connected by phone. The attorney general’s office has submitted four volumes of documents and Farlinger questioned a key witness and former Nygård employee, Greg Fenske, about numbered companies that own properties in California, including some that list him as chief executive officer. Fenske is a former Nygård product manager who has subsequently consulted with the Nygård company in helping to handle receivership issues. In March of last year, the Nygård company went into receivership.
Describing Nygård as “a 79-and-a half-year-old frail man,” Prober said, “We will be arguing that keeping him in jail during a pandemic is nothing short of a death sentence…he has no criminal record. He has no charges anywhere else in the world except the United States.”
Conversely, Farlinger spoke of the serious concerns about Nygård being released on bail, pointing out “the suitability of sureties, their character and the assets being put up,” according to the pool report.
Through a numbered company, Fenske has purchased a home that he has suggested is a place where Nygård could live, if released on bail. The money was sent to Fenske’s numbered company as part of a $1 million consulting fee that Farlinger suggested came from Nygård through a company called Edison’s, according to the pool report. Fenske reiterated that he does not know who owns Edison’s. “This is ultimately Mr. Nygård’s money,” Farlinger said.
The attorney also asked Fenske about the decision to move $500,000 to Edison’s the day before a court order was due to move those funds out for payroll for Nygård employees. Fenske said the decision was made at Nygård’s request, but suggested it wasn’t done in malice and had been figured out with the receiver by September, according to the pool report.
There were also questions about transferring the ownership of vehicles to Nygård employees before the company went into receivership.
Fenske said he was motivated to help because he believes in Nygård’s innocence. He said he would make sure Nygård was staying home by visiting daily, calling the landline in the house and monitoring motion-detection cameras at the entrance and exits. If Nygård goes against bail conditions, Fenske said he would notify the police. The house is where Nygård was arrested last month, according to the pool report.
Farlinger suggested that Nygård’s Bahamas estate was valued at $40 million, according to the pool report.
Fenske said he no longer works directly for Nygård and pays himself $2,000 through his consulting firm. Farlinger questioned which companies are and aren’t affected by the receivership, the ownership of certain properties, any assets that may be available to Peter Nygård and questions about the company’s conduct during the course of receivership. Prober suggested Farlinger should seek that information from the receiver.
Farlinger noted how such allegations as assets having been transferred to employees are related to the bankruptcy but also are directly related to the integrity of the surety and are therefore relevant.
The kickoff hour had its share of fits and starts with both sides acknowledging the poor acoustics in the courtroom, and questioning whether the proceedings should be moved to another room. Addressing that situation, the judge advised participants to speak up and to remove their masks when speaking. Further complicating the sound factor was an unexpected live broadcast by one of the journalists on the call-in, who unknowingly was relaying an update about the initial cross-examination of Fenske. After some discussion, it was decided that a brief recess would be taken and a new dial-in would be set up solely for members of the legal counsel. Aside from some members of the media who were in the courtroom, the previous group that had been listening had to rely on the pool report.
In the afternoon, Farlinger asked Fenske if he was aware of the allegations against Nygård and he said yes. Nygård then squinted, shook his head and looked down, according to the pool report. The witness also acknowledged that he was aware that the U.S. authorities claimed Nygård employees had facilitated the alleged behavior. Fenske “wholeheartedly disagreed” with the allegation by U.S. authorities that he had a role in facilitating payments between Nygård and his alleged victims, denying he had access to do that and that Nygård decided on payments for assistants or models for things like dental treatment.
Prober asked Fenske to confirm reasons for the purchase of the $989,000 Winnipeg property, including a Nygård museum, that would be used as a surety. Fenske said he didn’t think Nygård was in charge of all the different companies and corporations. Upon questioning by Prober, the witness said Nygård’s property in the Bahamas was tied to a lawsuit and that was impacting its potential to be sold. Femske said he was aware of nothing that was illegal, or that people were being held against their will or were unhappy.
The day’s second witness, Steve Mager, was identified for having plead guilty and convicted for such crimes as trafficking cocaine. Mager said he first met Nygård playing poker. He said he talks to the apparel magnate daily and visited him prior to his arrest. He also started working at one of Nygård’s properties for $40 an hour.
Mager was asked about people coming and going from the house where Nygård was staying prior to his arrest. He was also asked about the mortgages on his family home, as well as the rental property and Dodge Ram truck that were transferred to him by Nygård’s company last February.
Mager also spoke of the health precautions that Nygård took prior to his arrest — hand sanitizers everywhere, people wore masks and they did not have direct contact with him. Asked by Prober to look at Nygård on the screen in the courtroom, Mager said, “He looks like crap.”
The bail hearing continues on Wednesday.