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Order Ron Barlas to answer questions, First Nation asks court

Yellowknife's courthouse
Yellowknife's courthouse. Ollie Williams/Cabin Radio

Lawyers for the Łútsël K’é Dene First Nation say a man accused of fraud worth millions of dollars at the First Nation’s business wing is refusing to answer questions about what happened.

The First Nation and Chief James Marlowe allege that Ron Barlas, until recently the president and chief executive of Denesoline Corporation, spent years furtively diverting up to $14 million.

An NWT Supreme Court judge stripped Barlas of control over Denesoline in late April. Denesoline and a range of related companies are now in the temporary care of accounting firm B Riley Farber.

Barlas denies an allegation that he committed “blatant self-dealing” by moving some revenue intended for Denesoline into companies only he and his wife controlled, and an allegation that he manipulated some corporations’ governance to protect his position and prevent independent oversight of what was happening.

This week, the First Nation’s lawyers intend to ask a judge for an order compelling Barlas to answer questions that they say he is dodging.



Barlas and his wife, Zeba, were each interviewed by Jessica Kras, a lawyer representing the First Nation and its chief, via Zoom in May.

A type of interview called an examination allows Kras to probe the Barlases for information related to declarations they provided about their assets.

The First Nation’s lawyers are keen to learn more about the extent to which money flowed from various companies through the Barlases and their own operations, where any such money is now, and whether the Barlases have other business interests that have not yet come to light.

But in each interview, the Barlases’ lawyer, Michael Kirk, intervened dozens of times to tell his clients not to answer questions.



Kirk repeatedly told Kras she was attempting a “fishing expedition” that strayed beyond the boundaries of what could acceptably be asked in an interview of that form.

But Kras said Kirk’s interventions on his clients’ behalf amounted to “inappropriate refusals” to answer important questions.

Barlas’s bonuses

Kras and colleagues will now ask the NWT Supreme Court to issue an order compelling Barlas to be interviewed again, provide current financial statements for a range of companies, and answer questions related to a lengthy list of topics.

Those include details about assets held by companies related to him, any other business dealings in which he and his wife are involved, and what became of various prior ventures.

Some of the topics listed are more specific, such as whether Barlas has “invested in or loaned any money for the purpose of developing a gas station in Edmonton.”

An undated photo of Ron Barlas. Photo: Supplied
An undated image of Ron Barlas. Photo: Supplied

The lawyers also want to know how he funded his living expenses for the period between April 28 and May 12 – after the court froze his assets, but before a system was set up giving Barlas and his wife access to $15,000 a month for expenses.

The Barlases had their assets frozen because a judge said he had been convinced there was a risk they might, in the First Nation’s lawyers’ phrasing, “shift or dissipate assets … or remove evidence.”

The court record shows that, as the CBC first reported, an attempt was made to transfer US $500,000 out of the country on April 27, the day before the freezing order was granted.



A copy of the wire transfer requisition form shows that the money was sent to an apparent relative in New York state. On the form, the handwritten reason for the wire transfer reads: “Opening an office location in Turkey, sending start up funds.”

Almost the entire wire transfer was returned, minus $60, on May 4.

In his interview with Kras, Barlas set out how he was paid by Denesoline, separate to any dealings that involved his own companies.

He told Kras his net monthly wage at the corporation was $12,035.55, with a $99,450 annual bonus that he said “was already in place when I came” and an “exceptional performance bonus” worth $158,032.

“The first year that I was here, Denesoline sales went from $1.3 million to $2.2 million. That’s when this bonus was enacted, to recognize my exceptional, extraordinary performance,” Barlas told Kras, according to a transcript of the interview filed as an exhibit.

Asked if there were any years in which that exceptional performance bonus was not paid, he responded: “No.”

Barlas says he is the chief executive of 18 companies, 12 of which are related to Denesoline and the First Nation.

Asked to elaborate on the other six, he told Kras: “That’s confidential and proprietary information I don’t feel comfortable sharing with you.”



When Kras asked him what happened to $13 million that she said appeared to have been deposited over the years into the bank account of Northern Consulting Group, a firm Barlas owns, Kirk told Barlas: “Don’t answer that.”

Barlas has maintained that all of the actions he took as Denesoline boss were lawful.

The First Nation, which relied on a whistleblower employee for many of its initial claims, alleges an estimated $10 million to $14 million was inappropriately acquired by Barlas, or companies in his name, since his employment at Denesoline began in 2014.

Denesoline attracts much of its revenue from nearby diamond mines and related industries. The First Nation alleges Barlas formed a joint venture between Denesoline and one of his own companies that was then used to syphon off revenues that rightly belonged to Denesoline.

Łútsël K’é, a fly-in community east of Yellowknife on the East Arm of Great Slave Lake, has a population of around 350 people. The case is extraordinary for the sum of money allegedly involved, given the community’s size.