John Vassilaki, former mayor of Penticton, B.C., has been ordered to pay back over $815,000 he was found to have misappropriated from a family company in what is the latest in a series of legal battles between brothers.

The judgement rendered in B.C. Supreme Court also tossed out Vassilaki’s claim that he was wrongfully dismissed from the business.

The decision centres on the company Vassilaki & Sons Investment Ltd. (VSI), which owns a commercial property and since 2004 has operated a liquor store called Last Call Liquor Mart in Penticton.

The majority of shares in the company are owned by Vassilaki and his brother Nicholas Vassilakakis, who spells his surname differently. 

Vassilaki’s son, Fred, is a minority shareholder, as are Vassilakakis’s two sons, Florio and George. 

Besides being a company director, John Vassilaki worked as manager of the liquor store, where he hired his wife, son and daughter-in-law as employees. 

‘Excessive wages’

The judgement found that Vassilaki was responsible for VSI paying $631,000 in excessive wages to himself and those family members, including for regular and overtime wages for time that was never worked.

It found that between 2018 and 2021, a period when Vassilaki was serving as mayor and not working for the company, he “improperly caused” VSI to pay himself wages of $108,500. 

The decision says he also “improperly caused” VSI to pay over $10,000 to his son and daughter-in-law while they were vacationing in Mexico, and that he withdrew $5,000 to pay for his personal lawyer to bring the wrongful dismissal suit against VSI.

In response, VSI filed a counterclaim for $814,681.99 in damages, citing evidence from a law firm hired to do a workplace investigation and a second expert who looked at VSI operations.

Vassilaki served as mayor of Penticton from 2018 to 2022, and before that as city councillor from 2002 to 2014.

Affidavits from non-family liquor store staff said that when Vassilaki was at the store, he didn’t like to answer the phone, didn’t have the computer skills necessary for many tasks and spent most of his time watching TV in an office.

In his reasons for judgement, Justice Kenneth Ball wrote that Vassilaki’s misconduct was grounds for termination.

“The plaintiff admitted that he was obliged to deal with the monies held by VSI as a fiduciary, and not rely on the monies held by VSI as a personal financial backstop,” said Ball. “The plaintiff simply refused to obey his fiduciary responsibilities…”

Vassilaki has been ordered to pay the entire amount VSI was seeking “forthwith.”

In a previous family dispute, Vassilaki was ordered to pay his brother $14,000 in damages after being found liable for battery in a June 2020 family confrontation over jewelry and coins owned by their ailing mother. 

That legal action was preceded by a lawsuit brought by Vassilaki against his brother and two nephews in a dispute over rental income earned on a jointly held property.