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Ontario’s top court has upheld a ruling that found an Ottawa carpet supplier overbilled and defrauded Ottawa Community Housing.

Argos Carpets and its owner, Peter Foustanellas, now must pay more than $1.5 million to Ottawa Community Housing for overcharges, damages and legal costs as a result of the “serious fraudulent activity” established by Ottawa Community Housing during a civil trial, the Ontario Court of Appeal ruled Tuesday.

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The Court of Appeal ruling upheld a 2013 decision that found Argos Carpets, Foustanellas and a salesman engaged in a “deliberate and intentional course of falsified invoicing” and provided sub-standard carpet, underpad and installation in Ottawa-Community Housing units in 2004 and 2005. The conduct amounted to fraud, the judge found.

The judge found during the trial that Foustanellas made the lowest bid to win the contract with Ottawa Community Housing. But instead of seeking the 10-to-15 per cent profit the contract called for, Foustanellas ensured Argos profits were between 25 to 40 per cent.

Foustanellas denied any knowledge of the falsified invoices during the trial and blamed the salesman, who passed away before the trial.

The only change made to the original trial judge’s decision by the court of appeal was to remove the estate of the dead salesman and Argos Carpets from the damages award. Foustanellas was ordered to cover the damages alone.

The Court of Appeal also ordered Foustanellas to pay an additonal $45,000 in Ottawa Community Housing legal costs for his unsuccessful appeal.

aseymour@ottawacitizen.com

Twitter.com/andrew_seymour