Former Alberta Motor Association vice-president James Gladden has formally denied he defrauded his employer, who fired him for a fake-invoice scheme that allegedly siphoned millions of dollars from his employer over three years.

But Gladden did not oppose a consent-order judgment brought against him last month by the Alberta Motor Association (AMA) for more than $10.2 million, court documents show.

The documents also show Gladden has not opposed the seizure and sale of the assets he bought with money from the alleged fraud.

Since discovering the fraud in the summer of 2016, the AMA has seized and conditionally sold an office building Gladden bought in downtown Edmonton for $5 million. Land title documents show that in January, the AMA sold Gladden's new home in southwest Edmonton for $1.325 million.

The office building James Gladden purchased. The AMA seized and conditionally sold the building. (CBC)

But the receivers hired by the AMA so far have been stymied in their attempts to track down all of the revenue from the assets allegedly bought with the purloined millions.

While employed by the AMA, Gladden also ran a company on the side: Sprockit Apps Inc. It developed and sold mobile software apps.

Gladden operated Sprockit until the AMA seized it through a court order in August. The AMA's receivers soon discovered Gladden had spent nearly $3 million U.S. to buy 15 portfolios of mobile software applications, totalling more than 1,000 apps, from a New Hampshire-based software business brokerage.

Missing revenue

In a sworn affidavit, receiver Gordon Smith said before Gladden bought the portfolios, they were earning an average monthly net profit of $210,453. But Smith said they were now only bringing in about $40,000 a month.

Smith said that is consistent with revenue generated by only one of the 15 portfolios Gladden purchased, which was for $500,000.

"Although Gladden paid $2,422,000 for the other 14 portfolios, to date, the receiver has been unable to locate any additional information concerning the nature of any current revenue generated by those portfolios or the location where such revenue is being deposited," Smith's affidavit states.

The proceeds for Gladden's Scottsdale house — more than $500,000 US — have also been seized by the AMA. (Zillow.com)

"Despite questioning Gladden on this issue several times, no further information has been provided that would assist the receiver in resolving this issue."

The documents show the AMA sought and received a court order directing Apple Inc., which marketed Sprockit's apps through its online app store, to disclose information that might show where the revenue was going.

As first reported by CBC News in August, the AMA went to court to seize Gladden's assets, including his bank accounts. They discovered a scheme that involved fabricated invoices of between about $30,000 and $450,000 US and electronic transfers to American bank accounts.

In court in August, the AMA alleged Gladden and his associated companies defrauded it of at least $8.2 million Cdn between January 2013 and June 2016. That figure has now been pegged at $10.2 million.

Millionaire spending habits

Although the AMA paid Gladden $210,000 a year, court documents show he spent money like a multi-millionaire. He bought high-end sports and luxury vehicles, including Porsches, a BMW and a Maserati, and a 3,000 square-foot house in Scottsdale, Ariz.

The proceeds from the sale of the Scottsdale house — more than $500,000 US — have also been seized by the AMA. The vehicles and his Edmonton house were also surrendered to the receiver for sale.

The AMA has insurance to cover any losses, which won't be determined until the receiver is finished chasing down all the revenue and assets not yet disclosed by Gladden.

The AMA sued Gladden and his wife Dana but court documents show Dana Gladden has been dropped from the civil action.

James Gladden and his wife, Dana. Dana Gladden's name has been dropped from the civil action. (Facebook)

The alleged fraud has been reported to Edmonton Police. When a CBC News reporter visited the courthouse last month to view the civil court file, it had been viewed the day previously — by a detective from the economic crimes division.

@charlesrusnell

If you have any information about this story, or any information about another story, contact me at cbcinvestigates@cbc.ca.