Taxpayers bilked in kickback scam,
alleged free cleaning for ministers
By Sam Pazzano,
01 May 2014
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
The shocking claims were contained in court transcripts from a
preliminary hearing for one government official involved in the
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
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
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.
“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
“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
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
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
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
“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