Taxpayers bilked in kickback scam,
alleged free cleaning for ministers

By Sam Pazzano, Toronto Sun
01 May 2014

Bruno Perciasepe was a corrupt cleaner turned police agent who helped to convict three rogue provincial government officials who orchestrated an elaborate kickback scheme. (Jack Boland/Toronto Sun)

TORONTO - Taxpayers were bilked in a cleaning kickback scheme that ended in the conviction of three rogue government officials, the Toronto Sun has learned.

Scandalous allegations of ‘free’ cleaning at the homes of Liberal cabinet ministers and government employees also emerged in the OPP corruption probe.

The shocking claims were contained in court transcripts from a preliminary hearing for one government official involved in the kickback scam.
Kickbacks were received in the form of illegal payments made to the trio, and a private property manager, by cleaner Bruno Perciasepe, who over-billed the province for cleaning contracts.

Perciasepe was not charged in the kickback scheme. Instead, he became a police agent for the OPP to help convict provincial government workers Michael DePace, Gino Conicella and Katherina Pagliaroli.

Each of the three government officials pleaded guilty to breach of trust, and accepting a secret commission.

Ivanna Presot, a property manager contracted by the province, pleaded guilty to fraud under $5,000.

During the investigation, however, Perciasepe also gave the OPP a list of more than 170 people — cabinet ministers and government workers — whom he alleged had received “free” perks.

In DePace’s 2012 preliminary hearing, Perciasepe admitted to over-billing, fictitious billing and falsifying the size of areas he cleaned, in order to give 10% in kickbacks to the officials.

But he also alleged, under oath, that he offset “free” cleaning of homes, cars and boats belonging to cabinet ministers, provincial ministry employees or their relatives by falsely billing or over-billing legitimate government contracts. Those allegations were not challenged further in court and did not result in any charges.

Although some politicians are entitled to free cleaning, Perciasepe claimed no invoices or cash were exchanged during the alleged “free” work he did for ministers and government staff.

There was never any suggestion the politicians or others on the list Perciasepe provided to the OPP had any knowledge of the kickback scheme — which came to light after an internal government audit raised red flags and the OPP were alerted.

The OPP confirmed all 172 names on the alleged “free” perks list had been reviewed, but no charges were laid against any of them.

Police said, however, the civil servants’ names were passed on to their various ministries for their own investigations and for consideration as to whether any possible disciplinary action was required — something the government denies.
Despite regular Liberal promises of government transparency, taxpayers were never told about the four convictions in the case.

This is the first time those convictions, and allegations in the preliminary testimony, have been published.
Initial press reports surfaced in December 2010 when the OPP confirmed they had charged the three government officials and one property management employee.

Dalton McGuinty, premier at the time, spoke to the press, stating three ministries were being investigated at that stage.

Then-transportation minister Kathleen Wynne also reportedly commented, saying “appropriate action” was being taken. DePace and Pagliaroli worked in her ministry when they were charged.

Conicella worked for the Ministry of Economic Development, Trade and Employment.

Speaking to the Toronto Sun, an OPP spokesman said they reviewed the allegations made by the corrupt cleaner against the 172 government employees and cabinet ministers.

She added that the civil servants’ names were passed on to their various ministries after the OPP found there was not enough evidence to support the laying of criminal charges.

“All of the names on the list were reviewed and I can say (civil servants’ names) were passed on to their respective ministries. There was no wrongdoing, no fraud, no (criminal) breach,” said OPP Sgt. Carolle Dionne.
“There was not enough evidence to support the laying of criminal charges against the cabinet ministers or the others on the list.”

Asked whether cabinet ministers were interviewed, Dionne said, “I don’t know. I’m not saying they did or they did not interview them.”

However, it appears the government is at odds with the OPP’s assertion. A spokesman claimed no list of civil servants was ever handed over to them for review.

Ministry of Government Services spokesman Ciaran Ganley said: “We have no knowledge of any list or information provided to the government by the OPP.

“It was the Ontario Public Service that discovered the irregular financial transactions and initiated the audit. We shared that information with the OPP, which ultimately led to criminal charges against four individuals, three of which were OPS employees.”

He then directed all questions regarding the probe to the OPP.

It was following the internal government audit that police were notified and initiated an investigation in July 2010.

On Dec. 20, 2010, the OPP laid charges against the three government employees and the facility management company employee.

The investigation focused on irregular financial transactions — which were frequently charged to taxpayers and occurred between 2004 and 2009 — between a vendor, a facility management company and three employees from three different ministries.

The sheer scope of the scandal has never been disclosed publicly.

However, the Toronto Sun can today bring to light the full extent of the court documents outlining the scheme and the alleged extent of the benefits.
Perciasepe testified that he handed cash kickbacks to the accused government officials inside Trident gum wrappers and received some ministry funds through government corporate credit cards, known as “P-cards” (purchase cards).

He and DePace, who pleaded guilty last November, referred to the kickback money as the “Pilo” fund, court heard.

Perciasepe also alleged in the preliminary testimony that he purchased appliances for ministry offices and disguised those purchases on inflated cleaning contracts.

Although DePace denied receiving kickbacks, asserting his friend Perciasepe “was simply repaying loans” advanced to him by DePace, the agreed statement of facts stated regardless of how the cash payments were characterized, both the Crown and DePace agreed the payments were benefits gained by DePace, and the facts were sufficient to make out the offences of breach of trust and accepting a secret commission in his case.

Perciasepe testified that some cabinet ministers met him while he worked in government offices and asked if he did “residential work.” Then, work was done at the cabinet ministers’ homes or on their cars and there was never any discussion about being invoiced or paid, he alleged at DePace’s preliminary hearing.

Perciasepe also alleged in his testimony that he sent a letter to McGuinty’s office, offering information on government corruption, after an audit detected the kickback scheme.

Perciasepe was told in response, also by letter, they wouldn’t be meeting with him, but simply asked him for more information, the preliminary hearing was told.

Perciasepe in court portrayed himself as a victim, not someone who profited from corruption.

“Every time … I’m an honest working man, OK — every time those pricks came to me and they asked me for 10 points of my goddamn money that I used to feed my f—–g family — excuse my language … it takes a little bit of this out of you each and every time. By the end of this, I was a shell of a man,” he told the court.

Perciasepe billed the government $2.2 million for 1,222 government cleaning contracts between March 2002 through August 2008, and he offered to assist police after his billing irregularities were discovered, court documents state.

In March 2009, Conicella’s supervisor, Margaret Hart, discovered a $56,000 invoice from Perciasepe that appeared suspicious. When she asked Conicella about it, he and Perciasepe stopped their illegal activities, the documents state. A forensic audit team later found Perciasepe had over-billed $127,000 in 2008.

Perciasepe, who had expenses covered while he was a police agent, ultimately had $47,000 in fraudulent gains forgiven, court documents revealed. He paid back the remaining $80,000 to the province.

Perciasepe — who said he was paid $24,000 by police for three months of expenses while working as an agent — gathered incriminating evidence by wearing a bodypack that recorded conversations with DePace, Pagliaroli and Conicella.

But he wasn’t on his best behaviour.

In early 2010, Perciasepe was charged with assault causing bodily harm for punching his wife in the face. He later pleaded guilty and got probation and a discharge. The couple has since separated.

Perciasepe also testified the pressures of working as a police agent resulted in him drinking a 26-ounce bottle of rum in five-hour sessions once or twice a week.

Court documents reveal that the cleaner’s trouble began about 13 years ago when Perciasepe was approved to apply for government jobs. A good cleaner with six employees and competitive rates, Perciasepe thought he would tap into the motherload of government office contracts.

Instead, for a couple of years, Perciasepe got precious little work.

“Two years (before paying kickbacks), and all I was getting was little piddly-ass service calls,” Perciasepe recalled in court in 2012.

Perciasepe said he never “volunteered” to give kickbacks; instead government officials told him: “This is how things work.”

He had been doing commercial, residential and construction cleaning since 2000, but Perciasepe insisted he never had to give kickbacks for a decade in private-sector work.

The three facilities managers — DePace, Pagliaroli and Conicella — all received conditional or non-custodial sentences. Conicella was ordered to repay $8,000 while Pagliaroli had to repay $300. Presot received a suspended sentence.

“It’s as if cocaine kingpin Pablo Escobar became a police agent and then the police use him to nail three street-level buyers while Escobar gets immunity,” said a well-informed source. “Meanwhile, the vast majority of those who (appear to have) profited from this corruption walk away unscathed.”

— With files from Antonella Artuso, Queen’s Park Bureau Chief

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