Millions of dollars in federal small business loan money was allegedly blown on prostitutes, booze, partying and fast cars.

A Toronto Star investigation shows the department managing the program — Industry Canada — allows banks to loan money with lax or no controls.

In one case, at least 16 loans — more than $4 million doled out $250,000 at a time over eight years — were given to a loosely associated group of GTA businessmen whose leader’s past included bankruptcy and a poor credit rating.

The businessmen defaulted on each loan, but banks always approved another. Taxpayers’ money refunds banks when loans go into default.

David Scenna, the alleged mastermind, went on a spending spree that included lavish parties at Toronto’s Muzik nightclub, high-profile charity functions, Porsches and Mercedes cars; and thousands of dollars paid to high-end escort agencies.


One series of Scenna’s credit card bills for hookers was $38,000, according to documents found by a Royal Canadian Mounted Police investigation.