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A former executive of XTM Inc. PAID-CN, the Toronto-based financial technology firm at the centre of complaints about millions of dollars’ worth of missing restaurant tips, alleges that the company fired him after he complained to the CEO that she was misleading investors and putting users’ money at risk.
Jason Giagrande was head of business strategy for the U.S. at XTM in 2022, when he started raising concerns about what he believed were “illegal activities” by the company’s chief executive, Marilyn Schaffer, according to court documents.
Mr. Giagrande alleges that Ms. Schaffer inflated the company’s revenue in investor presentations, engaged in a practice known as wash trading and failed to properly insure client funds, according to a lawsuit filed in the United States District Court for the Southern District of New York in September, 2024. Wash trading is a form of market manipulation in which traders buy and sell the same security to create the appearance of liquidity.
“[Mr. Giagrande] told Schaffer that XTM’s non-compliance would ‘catch up’ to the company and become a ‘major issue.’ He further stated that XTM was ‘misleading users’ by not protecting their money,” the lawsuit reads.
Fintech XTM denied all of Mr. Giagrande’s allegations and filed a counterclaim against him on Feb. 5, 2025, alleging that he “milked tens of thousands of dollars from XTM while failing to perform his obligations to XTM.”
None of the allegations have been proven in court.
The Bank of Canada and the B.C. RCMP are investigating complaints that Canadian restaurants are missing millions in gratuities from digital wallets managed by Everyday Payments, a tip-pooling service jointly owned by XTM and Edmonton-based Everyday People Financial Corp. EFP-X
Restaurants in four provinces – British Columbia, Alberta, Ontario and Nova Scotia – have reported money missing from their digital wallets on the Everyday Payments platform. Ian Tostenson, president and chief executive officer of the British Columbia Restaurant and Foodservices Association, said last week that he had received complaints from at least 50 restaurants and has calculated a multimillion-dollar loss.
Everyday Payments offers a service that makes it faster and simpler for restaurants to pay gratuities to their staff. Restaurants pay the money into a digital wallet, where it is to be held in trust for employees until they withdraw it.
Everyday People Financial, which took over managing and administering the payment platform from XTM late last year, said wallet balances were adjusted on Jan. 28 to reflect the amount of actual cash available in settlement accounts held in XTM’s name.
In its financial statements for the three-month period ended Sept. 30, XTM reported a “trust deficit” of roughly $18.75-million.
In a written statement to The Globe, Ms. Schaffer said that the company’s “program funding/settlement deficit … was affected by multiple disclosed factors, including banking/financing costs reported in the financials, operating costs” and other factors.
“The Company implemented remediation measures, including financing and operating restructuring, to stabilize legacy balances and support reconciliation obligations. The Management Services Agreement with Everyday People Financial Corp. was part of that operating strategy,” Ms. Schaffer added.
Mr. Giagrande, who lives in New York, alleges that in early 2022, Ms. Schaffer overstated XTM’s revenue in investor presentations by $20-million, based on an acquisition she intended to make. Ms. Schaffer presented the acquisition to investors as “essentially, a done deal,” although at that point only a letter of intent had been drawn up, the lawsuit alleges. The acquisition never went through.
Mr. Giagrande further alleges that when he told Ms. Schaffer that she was misrepresenting discussions with three major restaurant groups, she responded: “Don’t let the facts ruin a good story.”
He said he also raised concerns that XTM was not properly insured. Canadian law requires the company to maintain separate insurance for each account it administers, but XTM had only insured its master wallet, and only for $200,000, Mr. Giagrande alleges.
“Schaffer summarily rejected Giagrande’s protests, stating that the requirements were the result of a ‘stupid law’ that did not ‘make sense,’” the lawsuit states.
Mr. Giagrande said he also confronted Ms. Schaffer for allegedly hiring a vendor to buy and sell XTM stock to inflate its trading volume.
“Rather than refrain from further illegal acts, Schaffer summarily stopped paying Giagrande’s compensation, effectively – and unlawfully – terminating his employment,” the lawsuit alleges.
In its court filing, XTM denied misleading investors, putting customer funds at risk and engaging in wash trading.
The company said it stopped paying Mr. Giagrande because he’d stopped fulfilling his duties and had “inexplicably” distanced himself from XTM, including by removing references to the company from his LinkedIn profile. The company also disputed Mr. Giagrande’s claim that he was an “exceptional performer.”
“Despite Giagrande’s purported experience in the hospitality industry and his alleged ability to generate business, not once did Giagrande generate a single dollar of new business on behalf of XTM,” the company alleges.
Ms. Schaffer said in a statement that the case is before the U.S. courts.
“XTM disputes Mr. Giagrande’s allegations as a disgruntled consultant and relies on its filed response and counterclaim. Mr. Giagrande was engaged as a consultant, and his claim seeks compensation following the end of that consulting relationship. The allegations are contested and unproven, and XTM will not litigate the case through the press,” Ms. Schaffer said.
Meanwhile, XTM has failed to pay more than US$200,000 owed to a Kansas staffing company after a U.S. court judgment, The Globe and Mail previously reported.
Ms. Schaffer told Ashley Ogren, the owner of Kansys Staffing Group, that she was unable to make payroll on Nov. 28 last year and that XTM is “so broke we use ChatGPT for legal,” according to e-mails provided to The Globe by Ms. Ogren.