Shoppers Drug Mart is suing a pharmacist owner of four stores for $1 million of its money it alleges he spent on overseas trips, pricey hotels, home improvements and $11,000 worth of Gucci products and other luxury items, according to a lawsuit.
Mulugeta Woldetsadik, owner of Mulugeta Pharmacy, improperly accessed the funds through withdrawals, credit card charges and bank transfers and used the money for “luxury vacations, meals and shopping sprees in foreign jurisdictions, and to pay down the mortgages and make improvements on his home,” according to the notice of civil claim filed in B.C. Supreme Court.
Woldetsadik — who for more than 10 years owned two Shoppers in Terrace and one in Kitimat and, when he sold those earlier this year, one in Powell River — owes the chain $1,037,000, the lawsuit says.
It’s alleged he made 41 transfers and withdrawals from the franchised businesses’ accounts between July 2022 and December 2023 totalling $654,000, money that was supposed to be used to operate the Terrace and Kitimat stores.
And Woldetsadik charged $580,000 on credit cards unrelated to the businesses, the suit says. That included more than $71,000 at the Address hotel in downtown Dubai, more than $51,000 at Madison Avenue Couture, almost $43,000 on Expedia, more than $21,000 on Ethiopian Air, more than $11,000 at Gucci and about $10,500 at the Four Seasons Resort.
Under the agreement signed with Shoppers, Woldetsadik — as licensee or franchisee owner of the stores — was required to maintain a minimum amount of money in the business accounts, which were instead left with an equity shortfall, the lawsuit says.
Woldetsadik, as of Oct. 23, has been in a shortfall and “despite numerous requests,” hasn’t explained where the money went or how the money was used to operate the stores.
Because of his breaches, Shoppers has suffered loss, damage and expense because most of the liabilities are financed by the chain and the debt he owes exceeds the assets of the franchised businesses
The equity shortfall is the difference between the businesses’ assets and its debts owed to Shoppers, according to the lawsuit.
Shoppers is asking the court to declare Woldetsadik in breach of the licensee agreement, order that he pay back the more than $1 million, plus damages, and place a certificate of pending litigation against his Courtenay house on Mallard Drive.
Messages left with Shoppers through its parent company, Loblaw, and with its Vancouver lawyer weren’t returned before deadline.
Woldetsadik didn’t return a message.
None of the allegations has been proven in court.
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