By Stephen G. Esrati
As my lawyers marched to the Court of Queen’s Bench in Edmonton, Alberta, in May 1997 to charge Commonwealth Publications Inc. (CP) and its principals with contempt for not replying to questions during deposition in my lawsuit, the defendants filed a counter-suit accusing me of defamation and seeking $500,000.
That was the way Don Phelan, president of CP, operated. He attempted to keep word of his felonious conduct out of the press by constant recourse to Canada’s strict libel and defamation laws.
I would have welcomed him on the courthouse steps in Cleveland, where he would have been laughed out of court because the truth is an absolute defense against a libel suit in the United States. I had called Phelan a crook. Under a quirk of Canadian law, however, Phelan could sue in Canada because it was considered a counter-suit to my original suit against him.
Phelan kept bad publicity to a minimum. It was not until after Commonwealth went out of business in 1998 that the Canadian Broadcasting Corp. did a short piece on CP. Earlier, I had been approached by a producer at CBC in Toronto for a real exposé, but it was axed. Canada’s national newspaper, the Globe and Mail of Toronto, never uttered a word until CP was defunct. The Edmonton Journal and Edmonton Sun kept quiet until CP was on the ropes.
The Journal had all its CP stories written by a free-lance writer, Charles Mandel, who swept anything critical of CP under the rug as long as he could. Coverage was never assigned to the Journal’s own police reporters.
I had sued in early 1996. My lawyers, to be honest, thought I was a kook who had imagined this vast fraud. A year later, after they deposed Gerry Gibeault, ostensibly the marketing director of CPI, their opinion changed. Gibeault said under oath that his job was not to sell books but to collect new authors who would pay Commonwealth to "publish" their books.
So here’s my story, from the beginning:
In the spring of 1994 I answered a small ad from Canadian Literary Associates (CLA) in the New York Times’ Book Review that sought authors who sought international representation. Since my novel contains Canadian material, I thought a Canadian agent would be perfect.
(Similar ads ran in Writer’s Digest and in the New York Review of Books. I was told by someone at the New York Review that the ads were never paid for.)
In short order I was sent literature informing me of the alleged experience CLA had in placing material with publishers all over the English-speaking world. That would have suited me fine, because my book dealt with war crimes against American and Canadian prisoners of war. I sent my manuscript and, after a couple of months, I was called by Donald J. Phelan, who said he was the principal of CLA and who accepted my novel. In August, Phelan left a message on my answering machine saying he was calling from Dublin and that he had just been informed that CLA had "sold" my book.
I cried in joy. I had worked 11 years on the research for this book of historical fiction.
I was sent a contract by Commonwealth (CP) through Phelan, my agent, who urged me to sign because it was such a "wonderful deal." I saw that I was expected to pay some $5,000 (in Canadian funds) toward the cost of publication and immediately called Phelan, asking him, "How dare you send my book to a vanity press?"
"It isn’t a vanity press," he said, continuing to urge me to sign.
My wife called CP to ask for the list of books CP had published. Gerry Gibeault, "marketing director" of CP, said CP was a new kid on the block and had not yet published anything. It was asking authors to help get the firm going on its spring list, he said. I was reassured and I signed in August 1994.
Since some of my book takes place in Slovenia, I visited the Slovenian Embassy in December and was given the names of several Slovenian publishing houses. I immediately called Gibeault to get him to make arrangements for foreign rights because my publishing contract assigned foreign rights to CP.
And then the doubts set in. Gibeault did nothing. I was unable to learn when the galley proofs would come, a date I needed because I planned to be in Italy for the 50th anniversary of the end of World War II. I was unable to reach Gibeault for more than four months and my faithful agent Phelan was no longer reachable by phone. The only way I could talk to Phelan was by faxing CLA and then waiting for his call. Eventually, Phelan lied to me, saying Gibeault had quit to run for mayor of Edmonton for the socialist NDP. (Gibeault was and is on the school board.)
In May, the galleys came -- a parody of typesetting. I corrected them, but also called my lawyer here in Cleveland.
He urged me to fax the CP publisher, Faye Hillman. I did. She did not reply. Then I engaged Carr & Co., an Edmonton law firm.
Immediately, Larry Carr learned at Alberta’s corporate registry that CP and CLA both were part of Erin Books, that Phelan was the sole director of CP, that CLA had been sold while I was under contract, and that CP had been incorporated while I was under contract. Since I had not been informed of those changes of status, Carr said the contract was null and had been reached by fraud because there had not been arm’s-length negotiations.
When subpoenas were served, we learned that Faye Hillman was, in fact, Phelan’s wife, Lorraine.
Despite a letter from Carr & Co. breaking the contract because of fraud, CP printed 100 copies of my book which it sent to me. The book had my name wrong on the cover and an incorrect legal disclaimer inside. I tried to find even one book published by Commonwealth in any bookstore in Canada or the United States. I never found one.
But, in what author Jack Mingo called CP’s most brilliant ploy, I received a small check for "royalties" for books CP claimed to have sold. Later, it turned out that such checks went out to all the authors who signed with Commonwealth, but the checks did not represent any sales.
During depositions (after several subpoenas were ignored) CP produced a document showing that it had printed 10,000 copies of my book. Those books were actually printed the following year in settlement of my lawsuit. Lying under oath in deposition is perjury in Canada.
The defendants in my action have been skillfully defended by Corbett & Co., the meanest sons of bitches who ever practiced law. They stalled, stonewalled, and stalled some more. They forced me to put up a $14,000 bond with the court for security of the defendants’ costs in the unlikely event that they won because I lived outside the province and it would have been difficult to collect the award from me. They cost me more than $60,000 in legal fees and a trip to Edmonton, where the defendants failed to appear.
Meanwhile, I was repeatedly threatened with a $500,000 defamation suit by Phelan because I called him and his cohorts crooks on the Internet. But through the Internet, I have also been in contact with others who were defrauded by CP.
The defamation suit grew out of e-mail messages sent to me by Patrick Riley, who claimed to have seen my book in Cole’s bookstores all over Canada. He claimed to have learned that my suit had been settled behind my back. He accused me of being anti-Canadian.
I replied as follows:
"Hey, I've been in Cole’s. I did not see any of my books. I did not see your books.
"It isn't anti-Canadianism on my part. Commonwealth is as crooked as a $3 bill. I've been screwed."
My words were thrown back at me in the $500,000 defamation suit.
Later, Riley admitted to me that he had been put up to the taunts so that Phelan would obtain material on which to base a defamation suit and to have some laughs at my expense. Riley said Phelan waived the $5,000 charge to "publish" Riley’s book.
I lost all faith in Canadian justice. I called the bunco squad of the Edmonton police in 1995. They did nothing. I wrote the Royal Canadian Mounted Police and was told that it was just a contractual dispute. As recently as March 1997 Cpl. Benson of the RCMP told me that there could be no prosecution for fraud because no Canadian statutes had been broken.
When I learned that Phelan was to attend the Frankfurt Book Fair in 1997, I went to Germany to confront him. The CP booth was empty and had never had any CP representative in it at any time during the show.
I settled my lawsuit against CPI in June 1997. I won the dropping of the defamation suit and $60,000 in Canadian funds (payable in 12 monthly installments) to compensate me for my costs and the refunding of my $14,000 bond; in return, they won my silence. But my lawyers did not trust them and made them sign personal consent judgments for the amount of the settlement. My silence, however, was guaranteed only as long as they made monthly payments.
The March 1998 check bounced. It was later made good. But three later checks were never paid and the Phelans were to be hauled into court for contempt. That’s when CPI shut its doors, leaving everyone high and dry.
Enter Rob MacDonald, a lawyer looking for business. He got on the Internet and offered all CPI authors representation in a class-action suit, payable in advance.
MacDonald took possession of the books found in CPI’s vacated premises by a private bailiff hired by the landlord, who had also not been paid.
Throughout this time, Mandel kept churning out articles which included the false claim by Phelan that in addition to "cooperative" publishing agreements, Commonwealth also published books with a standard royalty clause. No such books were ever published, nor was a much-touted Commonwealth special about Princess Diana by Dame Barbara Cartland, step-mother of the Princess of Wales. Dame Barbara is a best-selling author of romance fiction.
Eventually, MacDonald won a $14 million court order against the penniless Commonwealth and Phelan, but the authors who had engaged him got nothing. MacDonald did offer to ship any of their books in his possession, provided they paid for shipping. He informed me that he had another 10,000 copies of my book and wondered what I wanted done with them, although my books were not listed in his own inventory of seized books.
[From David C. O’Neal, another Phelan victim who started a web page dedicated to unmasking Phelan, it was learned that a former CP employee had reported that these 10,000 books had been printed when Phelan said they were when he was deposed. But they were no good. O’Neal did not know what made them unsellable. However, a book recently sold by a Barnes & Noble store in Chicago was discovered to have an incorrect Universal Product Code bar coding on the cover. Rob McDonald did offer to sell me the 10,000 copies of the book that he had somehow inherited.]
Some Commonwealth authors later found their seized books on sale by Picasso Publications.