White-collar crime
“White-collar crime gets more outrageous by the second.”
—Sara Paretsky


When businesses are hit by white-collar criminals, most of the time they can replace the losses out of their profits or insurance. When non-profit organizations such as schools, hockey leagues and condominiums get hit, students, parents and condo owners are forced to absorb losses that can be quite staggering.

Here are three cases where white collar criminals committed, or are alleged to have committed fraud against unsuspecting non-profits in Ontario.

Pickering minor hockey loses $725,000 to treasurer with gambling bug

York University sues former employees

York University wins Superior Court application

Treasurer accused of embezzling church funds says he acted in good faith

Peterborough, Ontario rattled by fraud cases

Former Etobicoke Humane Society president allegedly defrauded shelter

OPP seek 2 people, including ex-government director, in fraud investigation

Police to investigate suspected bid-rigging in Toronto’s paving contracts

Rigged construction bids 'culture' problem, says Toronto city manager

Quebec

Former chief of staff testifies Mayor Applebaum was open to corruption

Michael Applebaum sentenced to 12 months behind bars

Laval’s ex-mayor Gilles Vaillancourt pleads guilty    Part 1

13 contractors and engineers plead guilty to Laval fraud charges  Part 2

United States

Norfolk developer told feds he bribed Sheriff Bob McCabe

Charges filed after ink cartridges add up to gift cards

New Jersey mayor charged in public worker overtime scheme

Ex-Congresswoman guilty of taking money from sham charity

Televangelist Todd Coontz indicted on tax fraud

Europe

Former French budget minister jailed for tax fraud

Pickering minor hockey loses $725,000 to treasurer with gambling bug
Toronto Star
Robert Cribb  Staff Reporter
18 December 2012

Following the largest ever theft from a children’s hockey league in Canada, a former treasurer of the Pickering Hockey Association has been ordered
by a judge to repay $725,000 in stolen money.

Steve Scott’s embezzlement has stunned the PHA’s 400 volunteers, who spend weekends and evenings running minor hockey programs for 1,100 kids.

The judge’s repayment ruling arises from a civil lawsuit successfully brought against Scott by the PHA.

Linthwaite said the association also has filed a complaint with Durham Police, and there is an “ongoing police investigation.” A Durham Police spokesperson wouldn’t comment on the matter.

Glen McCurdie, vice-president of membership services for Hockey Canada, said Scott’s fraud is the biggest against a volunteer minor hockey association that he’s seen in Canada. “Situations like this are disturbing in any volunteer organization. We can only rely on our associations to do their best to ensure this doesn’t happen again.”

Scott, treasurer for the PHA for 16 years, was a “respected man in the association,” says Linthwaite, and no one suspected wrongdoing until two
years ago, when the City of Pickering informed the PHA board of directors that it was $335,000 in arrears for ice rentals.

Madame Justice Ferguson, who issued the ruling in the civil suit, concluded the former treasurer fraudulently pocketed nearly three-­quarters of a million dollars, based on audit records.

In addition to repaying $725,000 for “fraudulent misappropriation of funds,” the court ordered Scott to pay the association another $40,000 in damages, nearly $9,000 in court costs and $5,650 for accounting fees.

Obtaining a court order for reimbursement is one thing. Collecting the money is another, says Linthwaite, a 30 ­year volunteer with the PHA — the cost of attempting to collect might be more than the association would ever actually see.

Police slow to act
Two years after the hockey league suspected fraud, the Durham police still have not laid charges. You will read in the next chapter that the Peel Regional Police failure to act in 2007 allowed Manzoor Khan to stay in business and steal $20,000,000.00 three years later.

Lessons learned
In the aftermath of the theft, the association has created a much more rigorous auditing system. Among its oversight reforms: annual financial audits, monthly financial statements to the board, double signatures on all cheques and receipts, replacement of cash transactions with more electronic payments, a review of all supplier relationships and making the treasurer a paid employee who reports directly to the board of directors.

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York University sues former employees
York University called in forensic auditors when they became aware that Michael Markicevic, a former assistant vice-president of campus services and business operations used staff and construction materials from the university for work at two family homes, while the school unknowingly covered the costs through a “vast” scheme featuring scores of bogus invoices.

York’s civil claim for damages names 18 other individuals and six companies as defendants. The university’s claim, which remains unproven in court, is among a series of sensational allegations of “deceit, conversion and conspiracy” against the defendants involving more than $1.23 million between 2007-2009 and possibly earlier.

York said senior managers—who were entrusted and responsible for tightening the university’s loose procurement policies—abused that very system by approving false invoices from various suppliers that were inflated or never done. York is suing the individuals and companies for more than $4,000,000.

The York University fraud is of interest to condo owners for several reasons.

First it shows how a manager in charge of hiring contractors can have work done on their own homes for free, collect kickbacks and create false invoices for materials, equipment and labour for work that was never done.

Secondly, it shows that a group of individuals, in a position of trust, may conspire against a corporation for personal gain.

It is telling that York University hired forensic auditors and did all of the investigative work before they handed the evidence to the police. Once the work was done for them, the police laid criminal charges.

A final interesting point is that York asked a judge to freeze the assets of Michael Markicevic's family members as the family's two houses and airplane are not in his name.

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York University v Markicevic and Brown
Ontario Superior Court of Justice
Docket:    CV-12-9758-00CL
Date:    25 October 2016

Costs Endorsement
In June 2016, the court found that Mr. Markicevic and Mr. Brown had engaged in the alleged fraudulent activities and breached their fiduciary duties as senior employees of York. The judge rejected all of their defences, as well as Mr. Markicevic’s counterclaim against York for negligent investigation.

The amount awarded at trial was over $1.8 million, before pre-judgment interest.

York seeks costs on a full indemnity basis in the amount of $1,576,950.

Costs award

•	Mr. Markicevic, Mr. Brown and the A-Tech Defendants: full indemnity costs	$400,000
•	Mr. Markicevic: additional full indemnity costs	$977,651
•	Ms. Fleming  (Mr. Markicevic's wife)	$60,000
ª	Mima  (Mr. Markicevic's daughter)	$40,000
	Total	$1,477,651

All costs are payable within 30 days.

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Treasurer accused of embezzling church funds says he acted in good faith
Ottawa Citizen
Chris Cobb
12 June 2014

The former treasurer of the century-old St. Luke Lutheran Church in New Edinburgh denies he embezzled more than $600,000 in church funds and claims he invested the money in a property development deal that went sour.

In a statement of defence filed with the Ontario Superior Court, retired public servant Barton (Bart) Burron claims that he had the church’s best interests at heart but was hoodwinked by a big-talking business partner.

The Church claims that Burron embezzled the money and used at least some of it to pay off, or down, the mortgage on his own home.

moved to have all of Burron’s bank accounts frozen

St. Luke’s, which says the money represented the bulk of its assets, has moved to have all of Burron’s bank accounts frozen.

Burron, an accountant and former employee of the Auditor General of Canada’s office, was church treasurer for about 30 years.

In his defence, Burron says that he was “instructed and authorized” to make investment decisions for St. Luke’s but that church governors failed to give him any policies, guidelines, limitations or restrictions related to how he invested the money.

Burron says he bought a development property on Springhurst Road in Ottawa with his own money and a personal bank loan but admits he had no experience in property development and that his only other effort at business was a failed fast-food franchise.

The church treasurer says he brought in design and building professionals and paid them with his own money and cash from two partners — neither of them a church member.

As the “strong potential for the development became more apparent” and “all indications were that the project would be highly profitable” Burron says, he began moving church funds into the project.

“The decision was made in the best interests of the plaintiff (the church),” says the defence statement.

Burron, who initially moved the money into his own personal account, says all “investments” were properly recorded in the church financial records.

According to Burron, a third partner came on the scene claiming to have contacts with a foreign embassy.

Barron says the new partner persuaded him to expand the development project to attract the foreign diplomats who were searching for a new location for their embassy. He doesn’t name the country.

The new partner, experienced in real estate development, persuaded him that while more expensive, the new project would be significantly more profitable.

Burron says he moved the money into an account controlled by the developer who then arranged extra financing through Westboro Mortgage Investment Corp.

Throughout 2013, says the defence statement, the partner persuaded Burron that the project was proceeding as planned but that toward the end of the year the partner stopped returning the treasurer’s phone calls or responding to emails.

The property deal had collapsed, says Burron, and Westboro, wanting to recoup its money, sold the Springhurst property by power of sale.

At that point, Burron says, he immediately resigned as church treasurer and handed back their books, which he kept at his home.

The church, apparently skeptical of the “unscrupulous developer” story, has an entirely different version of events and claims that Burron took the money and labelled each advance a “loan or investment” and never disclosed that he was paying it into his own account.

“Now that Bart has lost the money,” says the church in its counter to Burron, “he chooses to call it an ‘investment’ in order to avoid repaying the money, which is part and parcel of his fraud.

Bart created an atmosphere of trust and confidence

“Bart created an atmosphere of trust and confidence while, at the same time, he embezzled the bulk of the plaintiff’s assets and put them in his own name without proper disclosure or consent.”

The church says Burron continued to take money after the alleged property deal fell apart and also claims that he used the St. Luke’s debit card to buy groceries, LCBO products and lunches without permission and “completely beyond what Bart was entitled to charge to the plaintiff.

“The plaintiff trusted our treasurer as he was a professional with high credentials and an impressive work history. As a chartered accountant, the plaintiff understood Bart would comply with his professional code of ethics.”

The “embezzled funds” were used to purchase, improve or pay off mortgages on a property at 13 Montcalm St. in Ottawa owned by Burron and his numbered company, the church alleges in its statement of claim.

The case is scheduled to be heard in court later this month.

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Peterborough, Ontario rattled by fraud cases
Hamilton Community News
04 November 2016

Police say a southern Ontario community has been rocked by two high-profile frauds allegedly involving the executive directors of prominent local non-profits

Big Brothers Big Sisters
Top officials at both the Big Brothers Big Sisters chapter in Peterborough, Ont. and a local hockey team geared towards people with special needs now stand accused of defrauding their organizations of thousands of dollars over multiple years.

Peterborough police Insp. Larry Charmley said the investigations into the two organizations are not connected in any way, adding the similarities in the cases and timing of the arrests were strictly coincidental.

Both cases involved married couples being arrested in the past two weeks for alleged fraudulent activity at organizations that have become important to the community, he said, adding the news has left Peterborough residents feeling both rattled and disillusioned.

"People are definitely shocked and disappointed," Charmley said in a telephone interview. "And it also unfortunately makes people think about organizations, probably, and what's going on. It's not good for our community, that's for sure."

The fraud charges against the former executive director of Big Brothers Big Sisters of Peterborough were less novel, Charmley said, as one round of charges was laid earlier in the year.

He said police began investigating the organization in 2015 and initially arrested the then executive director in April of this year.

At that time, Darlene Edwards Evans was charged with three counts of fraud over $5,000.

The investigation continued, however, and Charmley said police now allege about $300,000 of the organization's money was diverted for other purposes between 2005 and 2015.

Last month, police charged Evans with a further count of fraud over $5,000, plus one count each of money laundering and uttering a forged document.

Evans' husband Robert Bestard, who did not work for Big Brothers Big Sisters, is also facing a charge of fraud over $5,000.

Peterborough Huskies
The second fraud case involved the co-founders of the Peterborough Huskies, a hockey team catering to children and adults with special needs, Charmley said.

David and Catherine Tuck established the team two years ago and helped create a prominent place for it in the community. The Huskies were even tapped to host the 2017 Special Hockey International tournament, which is currently slated to involve dozens of teams from Canada and the United States.

Both Tucks are now facing one count each of fraud over $5,000.

Charmley estimated the value of the alleged fraud in the case around $40,000, adding the investigation is ongoing.

Neither Big Brothers Big Sisters nor the Peterborough Huskies responded to requests for comment.

Special Hockey International did not respond to a request for information on the status of the 2017 tournament, which is scheduled to take place in March 2017.

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Former Etobicoke Humane Society president allegedly defrauded shelter of $61,000
Inside Toronto.com
By: Cynthia Reason

The former president of the Etobicoke Humane Society (EHS) appeared in court this week on 15 fraud-related charges after allegedly embezzling more than $61,000 from the all-volunteer charity.

Toronto police Const. Victor Kwong confirmed that Pia Lauretti was charged on Wednesday, Nov. 9 with breach of trust, fraud over $5,000, two counts of utter forged document, two counts of forgery, and nine counts of fraud under $5,000. She appeared in court later that same day.

They hired their own investigator to investigate internally

“They noticed that something was strange and started to suspect something (in June), so they hired their own investigator to investigate internally,” Kwong said of EHS officials. “Once they had enough information, they came to us and she was charged this week.”

All 15 charges, Kwong added, are in relation to her position at EHS, an independent, all-volunteer, federally registered charity based in Etobicoke.

In an email statement to The Guardian, EHS’s newly appointed interim president confirmed that Lauretti stepped down from her position at the shelter in June 2016.

“We are aware of the charges laid against (Lauretti),” wrote Roma DeLonghi, who took over the reins of EHS just last month. “...As this is a police matter, we hope that you will understand and respect that we cannot provide any further comment.”

DeLonghi’s statement also went on to assure EHS’s volunteers, members and donor community that “every step is being taken to ensure the protection and proper use of donor funds.”

Our internal controls have been reviewed and strengthened

“Our internal controls have been reviewed and strengthened to both deter and prevent any potential for misuse of funds or fraud,” she wrote.

Lauretti has not responded to The Guardian’s attempts to contact her for comment via phone and email.

Back in 2011, Lauretti – then EHS’s shelter manager – was lauded by her fellow volunteers for her dedication to the Etobicoke-based animal shelter in a nomination letter for the Etobicoke Guardian’s Urban Hero Awards.

“Pia is truly an urban hero. Countless volunteers and Etobicoke and area citizens have benefited from her giving nature and time. However, it is the hundreds of animals that have been saved by her efforts are what we will all remember,” the letter reads.

Lauretti’s nominator also noted that the mother of two began volunteering at EHS in 2005 and moved quickly into increasing levels of responsibility, serving as adoption volunteer, adoption co-ordinator, co-shelter manager, dog adoption co-ordinator, and sole shelter manager.

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OPP seek 2 people, including ex-government director, in fraud investigation
CBC News
14 November 2016

A former provincial government director and his spouse are accused of committing fraud, the Ontario Provincial Police said on Monday evening.

The OPP is looking for a male suspect, a former senior bureaucrat with Ontario's Ministry of Government and Consumer Services, who is facing three charges including breach of trust, fraud over $5,000 and conspiring to commit a criminal offence.

The 37-year-old man also worked as a director with a start-up company called LokaWoka Inc., which produced an app that linked up workers and people needing help with odd jobs.

The man's spouse, a 36-year-old woman, is also wanted for fraud over $5,000 and one other charge of conspiring.

The OPP said its Anti-Rackets Branch received a complaint about the suspect in January of 2015 and launched an investigation.

The police force was not immediately available to provide further details about the charges.

Government conducted internal investigation
Anne-Marie Flanagan, a spokesperson for the Ministry of Government and Consumer Services, said the government conducted its own investigation and notified the OPP of the results.

"An internal investigation was conducted when inconsistencies involving a former employee were discovered," Flanagan said in an email to CBC Toronto.

"Our government takes allegations of misconduct very seriously."

The OPP has issued warrants for the pair. Anyone who knows where they are is asked to contact police.

Identities
The Canadian Press reports that Shabbir Evershine, 37, is charged with breach of trust, fraud over $5,000 and conspiracy. His wife Rashida Evershine, 36, director of B52 Global Inc., is charged with fraud over $5,000 and conspiracy

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Police called in to investigate suspected bid-rigging in city’s paving contracts
Toronto Star
By: Betsy Powell  City Hall Bureau
21 March 2017

City staff have called in the police after Toronto’s auditor general uncovered suspected examples of outside contractors bid-rigging on city paving jobs to drive the price up.

Auditor General Beverly Romeo-Beehler undertook her audit of paving contracts — awarded between January 2010 to June 2015 — to ensure the city’s tendering process was fair and competitive and after a previous audit raised concerns.

During the time period, the city awarded 55 road resurfacing contracts worth $168 million. The majority of that work is performed by private contractors who get it through the city’s competitive bidding process.

“Given the significant amount spent on construction contracts, they can be a prime target for corruption and collusion,” says a summary document released Tuesday alongside the auditor’s 51-page report.

One such example cited in the report shows “the inflated price from contractor A on the work for crack repair in eight different contracts. The grossly inflated prices from contractor A were as high as three times more than the second-lowest bidder’s prices.” Combined with inaccurate estimates by city staff, contractor A was able to gain an extra $2.5 million from city contracts, the report says.

“The results became more concerning given that contractor A was also a dominant player who won most of the tenders in certain districts.”

The report suggested that top bidders could be colluding with lower bidders to boost the price and then a low-bidder would be hired as a subcontractor.

City staff need to be vigilant

City staff need to be vigilant monitoring and detecting unusual bid patterns, yet the audit identified numerous “red flags” of potential bid rigging by certain contractors in paving contracts, the report says.

“Our audit identified significant control deficiencies and a lack of routine analysis of bid submissions and bidding patterns,” says the report called Detection of Warning Signs for Potential Bid Rigging Should be Strengthened.

“There were many telltale signs of bid rigging and inflated pricing and even more concerning was the fact that most district contracts were consistently dominated by a small group of contractors over the past five years.”

The report includes a series of recommendations to ensure the city has “adequate measures” to deter and detect potential bid rigging in the future.

Bid rigging, also known as collusive bidding, provides an opportunity for the winner to artificially inflate prices of goods or services by eliminating real opportunity. Under the Competition Act, it is illegal for competitors to conspire. Fines can be as high as $25 million and guilty parties sent to prison for up to 14 years.

The report does not name the companies involved.

While bid rigging is difficult to prove, one of the “red flags” of its existence is the “market domination” over a series of contracts, regardless of competition, the report says.

In a statement, Mayor John Tory said he was “extremely troubled” by the auditor general’s findings, but is “confident the city is making changes to address all the issues identified.”

“I have been assured by city staff that they have already taken steps and will take further steps to make sure there are proper measures in place to stop potential bid-rigging or collusion between bidders,” Tory said.

the risk of conflict of interest

The audit also highlighted the risk of conflict of interest between contractors and city employees.

While this is not unusual, it is the “city’s responsibility to track all current and former relationships that may cause a potential conflict of interest so that duties can be properly segregated and monitored,” the report says.

The audit also found examples of inappropriate conduct by city staff “entrusted to independently verify the quality of the contractor work.”

For instance, after testing indicated an inferior paving job, a decision was made to perform an independent test of the asphalt at the contractor’s yard. “A transportation services supervisory staff “blind copied” the contractor about the independent test three days before the random test of asphalt.”

The staff member retired before the audit started and could not be interviewed.

The mayor, currently on a trade mission in India, said in light of the audit’s findings a number of personnel changes have taken place “to ensure mismanagement and misconduct won’t be repeated.”

The report follows a June 2016 report on road resurfacing contracts. It found that 15 of 55 road resurfacing contracts awarded between 2010 and June 2015 were “materially unbalanced” and the city could save nearly $2 million by ensuring accurate quantity estimates in tender documents.

Councillor Stephen Holyday, who sits on the audit committee, said Tuesday he expects the report will “send ripples” throughout the public service and “we hope it will affect changes everywhere, if it’s needed.”

“Maybe we were taken advantage of,” but, perhaps, “the path forward looks optimistic, he said.

“We caught something really important, we’re going to save a lot of money and have stronger procurement after this.”

The auditor’s report is on the agenda at Friday's audit committee meeting.

City spokesperson Wynna Brown wrote in email that city manager Peter Wallace contacted “appropriate legal authorities” who have initiated an investigation.

“We would like to emphasize that (the) city has undertaken a comprehensive action plan in response to the AG’s review and implementation is well underway to ensure fair and competitive procurement processes are in place.”

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Rigged construction bids 'culture' problem, says Toronto city manager
InsideToronto.com
by Rahul Gupta
28 April 2017

Toronto Council was read the riot act by the city’s top civil servant for years of inattention toward rigged bidding on construction contracts.

City manager Peter Wallace warned council there is a “culture” problem potentially dating all the way back to amalgamation, in the wake of last month's stunning report from auditor general Beverly Romeo-Beehler. Her report concludes an unnamed group of private contractors likely colluded on bids seemingly unbeknownst to staff while vying for city contracts awarded for small road “shave and pave” projects.

The report reveals not only a disturbing lack of monitoring of the bidding process, but also a complacent organizational culture permeating all aspects of the city, from elected officials down, said Wallace.

“You are the board of directors, you have a culture that’s not been optimal, I’ll say gracefully,” said Wallace Thursday during the second day of April’s Council meeting. “This is a shared concern. It’s not just a management challenge. It’s a challenge the auditor general has put forward that relates to all of us in this chamber.”

The report meticulously examined bids submitted between 2010 and 2015 – some $100 million worth of contracts awarded annually by the city’s Transportation Services department – and found red flags on about $2.5 million worth of tenders. Of note were bids which were deliberately inflated or underinflated to avoid suspicion, a practice known as “unbalanced” bidding.

The suspicious contracts took place in multiple unidentified city districts, said Romeo-Beehler, but she declined to call the practice illegal since the bids were readily accepted without registering much concern.

“What we’ve identified is sophistication on the contractor side where the city is essentially being gamed,” said Romeo-Beehler.

Wallace urged council to “close the damn barn door,” and support the report’s recommendations which include requiring bids to be submitted online and tracked through a central database, and better use of technology to track suspicious submissions.

“The reality here is the auditor general opened up something which has existed here for at least five years,” said Wallace.

Toronto Centre-Rosedale councillor Kristyn Wong-Tam said she was very alarmed by the auditor general’s findings, but not surprised.

“Clearly what has been revealed is the system is not working and the structures we’ve set up around accountability have failed,” said Wong-Tam.

Wong-Tam said she raised concerns about contractors in the past with staff but never received a satisfactory answer.

“We were awarding contracts to contractors who perhaps did not do a good job for us earlier and here we are awarding them another multimillion dollar contract,” she said. “Just about every single time staff has said their hands are bound. There was a level of defensiveness that this is how things are done and the way business is conducted.”

Further complicating things according to Wong-Tam is the essential murkiness of the bidding process which is far from transparent. She also suggested management changes might be needed to ensure there is meaningful change.

“Sometimes when you identify a problem you need to shake things up pretty aggressively,” she said.

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Former chief of staff testifies Applebaum was open to corruption
CTV News Montreal
14 November 2016

The fraud trial for Michael Applebaum began Monday with testimony from his former chief of staff, who said it took him several months to determine that the former Montreal mayor was open to corruption.

The first witness called to the stand was Hugo Tremblay, Applebaum's chief of staff for five years, who said that Applebaum taught him about political financing, either through people writing cheques through proxies or donating cash at fundraising events.

"That's the way it works everywhere," said Tremblay, even though those methods of fundraising violate the law.

He said that money raised legitimately would go toward the political party, while funds that were harder to trace would be used for other expenses, such as buying food for volunteers.

According to Tremblay, Applebaum asked two developers for donations as their condominium project was up for approval.

Robert Stein and Anthony Keeler wanted to tear down an old building and replace it with student housing.

Tremblay said that he was told to solicit cash from Stein and Keeler, and was told he would "have to make a political effort."

"We gotta make a living"

Tremblay testified that Applebaum said to him, "We gotta make a living" and that was when he realized Applebaum was open to kickbacks.

Applebaum reportedly asked for $100,000 but settled for half that amount -- and he gave about $16,000 to Tremblay.

Charges
Applebaum is charged with 14 counts of conspiracy and corruption.

He is accused of breaking the public trust during his time as a councillor and as the mayor of the CDN-NDG borough, between 2002 and 2012.

The case against Applebaum is built in part on the testimony of a former employee, who said the politician accepted a bribe in connection with a condo development in his borough, and with the development of several projects including the NDG Sports Centre.

In her opening statement, Crown prosecutor Nathalie Klieber said she will prove that Applebaum took money from the developers of two real estate projects, and that witnesses will explain how Applebaum asked for cash -- and received it.

Applebaum attempted twice this year to have the case thrown out, arguing the delays were tarnishing his reputation, but a judge refused his request.
Applebaum agreed to have his trial in French, although two Crown witnesses, Stein and Keeler, will testify in English.

The trial is being heard by a judge without a jury, and is expected to last two weeks.

Applebaum has pleaded not guilty to all charges.

Two co-accused
Applebaum was arrested and charged in 2013, as were former city councillor Saulie Zajdel and Jean-Yves Bisson, who was the director of permits.

In 2015 Zajdel pleaded guilty to breach of trust and corruption. He was sentenced to 240 hours of community service, ordered to donate $10,000 to charity, and was on probation for 18 months.

Bisson also pleaded guilty to accepting a bribe, and received a similar sentence.

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Michael Applebaum sentenced to 12 months behind bars
CBC News—Montreal
By Benjamin Shingler, Elias Abboud
30 March 2017

Former Montreal mayor Michael Applebaum was sentenced Thursday to 12 months in jail and two years probation. (Paul Chiasson/Canadian Press)

Former Montreal mayor Michael Applebaum has been sentenced to 12 months in jail and two years' probation after being found guilty of fraud and breach of trust.

Provincial court Judge Louise Provost handed down her decision Thursday at the Montreal courthouse, saying Applebaum committed "very serious" crimes over a period of several years.

The 54-year-old was then handcuffed before addressing the court. Applebaum told the judge he will take time in jail to reflect upon his past actions and plan for the future.

"I can guarantee you and my family that I will be a better person when I come out," he said.

"Since my arrest, I haven't been able to work and put food on the table for my family ... I have a remarkable family, and I will again put food on the table and make a life."

Speaking to reporters outside the courtroom, prosecutor Nathalie Kléber said the sentence sends a "clear message" that there are consequences to engaging in corruption.

Applebaum took power in 2013 on a promise to clean up Montreal City Hall.

Only seven months later, he was arrested on charges dating back to his time as borough mayor of Côte-des-Neiges–Notre-Dame-de-Grâce, the city's largest borough.

The case centred on accepting cash from real estate developers and engineering firms in return for favours.

The sentencing was delayed by over an hour because, Provost said, Applebaum had to be treated in hospital for an unknown ailment earlier in the day.

Applebaum was convicted in January of eight corruption-related charges, including two counts each of fraud on the government, conspiracy to commit fraud on the government, breach of trust and conspiracy to commit breach of trust.

The maximum sentence Applebaum could have received was five years in prison.

Kléber had argued that Applebaum's sentence should be "significant, but reasonable" and asked for less than the maximum: two years in prison, followed by two years of probation.

Shady dealings
The crimes stem from a period between 2006 and 2012, and involve two projects: a proposed real estate development on de Troie Avenue, and a municipal contract for the management and maintenance of the NDG Sports Centre.

The Crown argued Applebaum asked for cash kickbacks in exchange for ensuring the projects were approved by his administration.

There was no paper trail linking Applebaum to the illicit cash, and in her ruling, Provost said she would have been surprised if the investigators had been able to seize any documents, given the extreme prudence shown by the accused.

'Not an angel'
While Applebaum never admitted to any illegal activity on the surveillance recordings heard in court, Provost said she found several of his statements "troubling."

Sentencing hearing: Son asks for compassion, Crown wants to send message
Applebaum was recorded saying to the Crown's star witness, former political aide Hugo Tremblay: "In the end they have to have the money."

The defence tried to shake the credibility of Tremblay, but Provost said she found his testimony "articulate and sincere."

The court heard that during one conversation in 2007, Tremblay recalls Applebaum saying, "We gotta make a living."

"I realized at that moment that Michael Applebaum was open to corruption," Tremblay told the court.

He said his boss told him he "was not an angel."

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Laval’s ex-mayor Gilles Vaillancourt pleads guilty to fraud charges
By The Canadian Press
01 December 2016

Former Laval mayor Gilles Vaillancourt heads to the courtroom to enter his guilty plea to corruption charges on Thursday.   (Ryan Remiorz  The Canadian Press) 

LAVAL, QUE.—Former Laval mayor Gilles Vaillancourt pleaded guilty Thursday to three fraud-related charges and was incarcerated after defence and Crown lawyers agreed to a six-year prison term.

Under a joint Crown-defence agreement, Vaillancourt, 75, must reimburse about $7 million, mostly from Swiss bank accounts, as well as hand over his condominium to the city he headed for 23 years.

the fraud totalled several dozen million dollars

Crown prosecutor Richard Rougeau estimates the fraud totalled several dozen million dollars between 1996 and 2010.

About $1.7 million has already been given to Quebec authorities, while another $5.23 million is currently being transferred from Swiss bank accounts.

The City of Laval will take possession of his $1-million condominium as well as a sum of $300,000. Vaillancourt, who pleaded guilty to conspiracy, fraud and breach of trust, will also be deprived of $300,000 in pension payments.

The judge is expected to rule Dec. 15 on the Crown-defence recommendation.

“The Monarch”

Vaillancourt was mayor of Quebec’s third-largest city between 1989 and 2012 and earned the nickname “The Monarch.”

He was among 37 people originally arrested in May 2013 by Quebec’s anti-corruption unit.

He faced a dozen charges including conspiracy, fraud and corruption-related counts as well being one of three accused up on the more serious charge of gangsterism.

The arrest came just months after the cloud of suspicion forced Vaillancourt to quit politics in November 2012.

In the weeks leading up to the mass arrests, police had raided numerous engineering firms and businesses in addition to Vaillancourt’s own home, condo, offices and his bank safety-deposit boxes.

Thursday’s proceedings began with Quebec Superior Court Justice James Brunton asking Vaillancourt whether he had intended to commit the crimes to which he pleaded guilty.

Vaillancourt answered he did not have that intention, prompting Brunton to temporarily suspend proceedings. When they resumed, Vaillancourt said he had planned to commit the crimes.

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13 contractors and engineers plead guilty to Laval fraud charges
By The Canadian Press
12 July 2017

On Tuesday, a group consisting of eight contractors and five engineers pleaded guilty to fraud charges while working with ex-Laval mayor Gilles Vaillancourt.

The Crown suggested sentences from 12 to 24 months for the group, except for former Municipality of Laval director of engineering, Claude Deguise.

The judge recommended that Deguise serve 30 months for his role in the fraud. He was considered the mastermind behind the collusion and fraud charges.

In December 2016, Vaillancourt pleaded guilty to charges of fraud, breach of trust and conspiracy between 1996 and 2010.

He was arrested along with 37 other people by Quebec’s anti-corruption squad in May 2013 during a police operation at his home, condo, offices and bank safety-deposit boxes.

Vaillancourt originally faced 12 charges of gangsterism, conspiracy, fraud, breach of trust, bribery, favouritism, corruption and collusion.

The gangsterism charges were dropped.

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Norfolk developer told feds he bribed Sheriff Bob McCabe as well as Anthony Burfoot, sources say
The Virginian-Pilot
By Scott Daugherty
21 November 2016

Sheriff Bob McCabe

Norfork:
Businessman Ronnie Boone Sr. told federal investigators he bribed longtime Sheriff Bob McCabe in addition to Treasurer Anthony Burfoot, according to two sources familiar with the interview.

The sources did not disclose the nature of what was described as a “corrupt quid pro quo relationship” in court documents.

The revelation comes two months after Boone pleaded guilty to bribing Burfoot and to bank fraud. In court documents related to the plea agreement, federal prosecutors said Boone also bribed two other Norfolk officials – but didn’t name them.

No charges have been filed against McCabe. Officials with the U.S. Attorney’s Office for the Eastern District of Virginia and the FBI declined to comment, as did an attorney for Boone.

McCabe denied any wrongdoing Saturday in response to inquiries from The Virginian-Pilot.

“I unequivocally deny engaging in any corrupt quid pro quo of any kind with Ronnie Boone,” McCabe wrote in a statement sent to The Pilot through a lawyer.

In an earlier statement, McCabe accused The Pilot of basing its report “on rumor and innuendo.” He wrote that he had not been contacted by state or federal authorities in relation to any “rumored allegations.”

“I have always tried to carry myself in a manner above reproach,” wrote McCabe, who has served as sheriff since January 1994 and ran unsuccessfully this year to replace Mayor Paul Fraim.

eight felonies relating to public corruption and perjury

Burfoot, 49, is standing trial this month in U.S. District Court on eight felonies relating to public corruption and perjury. The former vice mayor faces up to 100 years in prison if convicted.

Prosecutors allege that Boone and other local businessmen paid Burfoot more than $400,000 in kickbacks and bribes between 2005 and early 2011. In exchange, prosecutors say, Burfoot helped or promised to help their projects and business ventures.

In court documents as part of Boone’s plea agreement, prosecutors said the businessman had engaged in a “corrupt quid pro quo relationship” with a “high-ranking” official in Norfolk other than Burfoot from about 2002 through 2012. It also said Boone, who with his family owns The Thirsty Camel and Greenies, as well as the Ocean View Fishing Pier and its restaurant, provided “cash and other things of value in exchange for that public official using his position” for Boone’s benefit.

The document described another unidentified official as a high-ranking employee of the Treasurer’s Office. It said Boone gave that person an undisclosed, interest-free, undocumented loan of at least $5,000.

Prosecutors and Burfoot’s defense attorney did not ask Boone about the other officials last week when he testified as a government witness in the treasurer’s trial.

McCabe was once friends with Boone and lives in Ocean View, an area the businessman and his wife, Judy, helped develop.

People familiar with the two men said they had a close relationship as far back as the early 2000s.

“They were friends,” said Glen Kovacs, a real estate agent who worked for Judy Boone Realty for almost a decade. “They were tight.”

McCabe’s wife, Janet, worked as a real estate agent for Judy Boone, Kovacs said. Ronnie Boone let McCabe put up campaign signs on his properties, and McCabe hosted at least one political party at Greenies, according to Kovacs and a 2011 Pilot article.

Jail inmates worked in the kitchen of the Thirsty Camel and at Greenies through a work release program, making minimum wage, according to jail spokeswoman Kaila DeRienzo.

When McCabe built a home in East Beach in 2005, Boone was the general contractor, according to city records.

But Boone and McCabe had a falling out a few years ago, Kovacs said. By 2012 – the year court documents say Boone and the high-ranking Norfolk official stopped working together – McCabe was speaking at City Council meetings in favor of letting a restaurant in competition with Boone’s serve alcohol after midnight.

While that vote appeared to illustrate the rift between Boone and McCabe, it also caused tension between Boone and Burfoot. According to prosecutors, Boone bribed Burfoot to vote against the change in question and got angry at the vice mayor when he voted in favor.

– Staff writers Tim Eberly and Gary Harki contributed to this report.

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Charges filed after ink cartridges add up to gift cards for former county employee
ABC WNEP 16
23 November 2016

Police have charged the former director of the Wyoming County 911 Center with several counts of theft.

According to investigators, Debra Raimondi purchased more than 1,200 hundred ink cartridges and toner from 2009 through 2014, totaling more than $92,000.

The issue is that the 911 center only needed about one or two cartridges a year. Investigators believe Raimondi would receive a commission for these orders in the form of Wal-Mart gift cards. All the excess cartridges were discovered when a new director took over the 911 center.

According to investigators, most of those ink cartridges that were purchased weren’t even compatible with the printer being used.

Norman Washick runs Cartridge World near Pittston and says it would be just about impossible for the 911 Center to ever use that much ink.

“You’d have to probably have 100-200 printers and be using a cartridge a day to use those kind of amounts before they would run out,” he explained. “Ink cartridges have a six-to-eight-month shelf life. Toner cartridges (can last) two to three years.”

The Wyoming County District attorney told Newswatch16 this is one of the most unusual cases he’s handled. And for those inside the Yearbook Diner in Tunkhannock, this is unbelievable.

People honestly will do anything to get money

“People honestly will do anything to get money,” said Lexi Tinna of Tunkhannock. “It’s just crazy that someone who is working at such a prestigious place would honestly come to terms with buying ink cartridges for money.”

“I could see it happening in Lackawanna County or Luzerne County, but not in Wyoming County,” added Eric Marhelski of Tunkhannock.

“We need two signatures,” proposed Betsy Ziegler of Fleetville.  “You had another thing recently where somebody got away with a whole bunch of money and two signatures might stop it.”

Raimondi is due back in court in December.

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New Jersey mayor charged in public worker overtime scheme
Bellingham Herald
The Associated Press
07 March 2017

PATERSON, N.J.—The mayor of Paterson directed three supervisors in the public works department and other municipal employees to perform work at a warehouse leased by his daughter and nephew while being paid overtime by the city, state authorities said Tuesday.

Paterson Mayor Jose "Joey" Torres and the supervisors were charged with theft, misconduct, tampering with public records and other offenses, Attorney General Christopher Porrino said.

"This is a case of old-school public corruption and abuse of power," Porrino said. "We have zero tolerance for this type of abuse of public office in New Jersey."

Standing on the steps of city hall later Tuesday, Torres' executive assistant read a statement as he stood next to her. In the statement, Torres said he would "vigorously defend myself" against the charges and said he is confident he will be "vindicated when the full story is told."

"I am extremely disappointed and surprised that the attorney general has elected to pursue this case and file these charges against me today," the statement said, noting that Torres and his attorneys were "addressing certain issues" with that office when "we were notified at the last possible moment that the state would be unsealing an indictment today."

Torres later left city hall without speaking to reporters, driving through a stop sign in his SUV .

The indictment alleges Torres directed the supervisors to work at the warehouse leased by Quality Beer, a company formed by Torres' daughter and nephew. The work included renovation, painting, carpentry and electrical work, officials said.

Torres' daughter and nephew intended to use the warehouse as a wholesale liquor distribution facility, Porrino said, but they terminated the lease after failing to obtain the necessary permits and license from the state.

The public works officials charged were Joseph Mania, who supervises the facilities division; Imad Mowaswes, who heads the traffic division; and Timothy Hanlon, assistant supervisor of the facilities division. It wasn't immediately known if the men had attorneys to comment on their behalf.

Mania had false time-keeping records submitted to the city, including overtime verification forms and bi-weekly timesheets that falsely stated he and other employees were working on legitimate city projects, Porrino said.

Torres, the first Hispanic mayor of Paterson, won his first term in 2002 as a Democrat and was re-elected in 2006. He lost another re-election bid in 2010 but won the office again in 2014, running as an independent.

Torres previously has said no city workers had ever done private jobs for him, but he has repeatedly declined to comment about the allegations at length. NBC New York videos have appeared to show city employees doing such work for Torres, from washing his scooter and building bookshelves to doing construction at his nephew's would-be business.

The indictment does not prevent Torres from continuing to serve as Paterson's mayor while the charges are pending, and city officials say they don't expect him to resign.

Torres' predecessor, Martin Barnes, was indicted in 2002 while in office. He fought the indictment and unsuccessfully sought re-election that year, losing to Torres. Barnes later pleaded guilty and served more than two years in federal prison.

Paterson, New Jersey's third-largest city, is a few miles from New York City.

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Ex-Congresswoman Guilty of Taking Money From Sham Charity
The Associated Press
Jason Dearen,
11 May 2017

Bishop Rudolph W. McKissick, Sr., left, escorts Former Congresswoman Corrine Brown outside the Bryan Simpson United States Courthouse on Thursday, May 11, 2017 in Jacksonville, Fla. Brown was found guilty of taking money from a charity that was purported to be giving scholarships to poor students. Photo: Bruce Lipsky/The Florida Times-Union via AP

After a historic, nearly 25-year career representing the Jacksonville area in Congress, former U.S. Rep. Corrine Brown was found guilty Thursday of taking money from a charity that was promoted as a program giving scholarships to poor students.

The verdict came after prosecutors outlined a pattern of fraud by Brown, 70, and her top aide that included using hundreds of thousands of dollars from the One Door for Education Foundation for lavish parties, trips and shopping excursions. She was convicted of 18 of the 22 charges against her, including lying on her taxes and on her congressional financial disclosure forms.

Wearing a lavender suit, Brown watched the judge read each verdict in a silent courtroom with no visible reaction. She later left the courthouse holding onto the arm of a companion, surrounded by dozens of reporters. A few supporters shouted "We love you Corrine!" and "Keep the Faith!" as she silently made her way to a waiting car.

Brown, a Democrat who was one of the first three African Americans to be elected to Congress from Florida since Reconstruction, represented the district that included Jacksonville since 1993.

Since her indictment last summer, she had been publicly defiant of the government's charges, saying in a statement she was among black elected officials who have been "persecuted." She had pleaded not guilty to all of the charges, including the fraud, but lost re-election last fall after her indictment.

"Former Congresswoman Corrine Brown violated the public trust, the honor of her position and the integrity of the American system of government when she abused one of the most powerful positions in the nation for her own personal gain," Acting Assistant Attorney General Kenneth A. Blanco, said in a statement after the verdict.

Key to the government's conviction was the testimony of Brown's former chief of staff, Elias "Ronnie" Simmons, and the charity's president, Carla Wiley. Both pleaded guilty after their federal indictments for misusing the charity's funds, and testified against Brown.

Federal prosecutors said Brown and her associates used One Door to bring in more than $800,000 between 2012 and 2016, including a high-profile golf tournament at TPC Sawgrass. Brown's indictment said the Virginia-based One Door only gave out one scholarship for $1,200 to an unidentified person in Florida.

Simmons said Brown ordered him to take cash and checks from One Door's account. On dozens of occasions, Simmons said he was told to take out of One Door's account the maximum $800 from an ATM near his house and deposit hundreds of it in Brown's personal account. Sometimes he kept some for himself.

Brown testified in her own defense, saying she was left in the dark about the goings-on with One Door's money, and blamed the theft on Simmons.

Brown said she left those details to Simmons and other hired staffers, and said she should have paid more attention to her personal and professional finances.
Her attorney, James Smith, said he plans to file a motion for a new trial and said Brown respects the American judicial system and the jury's verdict, even though she disagrees with it.

"She's strong and fighting for her innocence," Smith said outside the courthouse. "And she will continue to do that."

The judge did not set a date for Brown's sentencing, which could include many years of jail time.

Jason Dearen reports for the Associated Press.

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Televangelist Todd Coontz indicted on tax fraud, claims $1.5M condo, Ferraris are business expenses
The Christian Post
By Stoyan Zaimov
27 June 2017

Todd Coontz appearing on his "Financial Freedom" show in 11 November 2016. (Photo: The Word Network YouTube screencap)

After North Carolina televangelist Todd Coontz was indicted on tax fraud charges last week, claiming that his $1.5 million condo and luxury cars were "business expenses," a group that monitors ecclesiastical fraud has warned that some preachers are "raping" the Christian community.

"It's time the IRS started looking into these people that are raping the Christian community," Trinity Foundation President Ole Anthony told The Christian Post in a phone interview on Monday.

Anthony, whose Texas-based group reports on fraud committed by pastors and televangelists, said people who scheme others out of their money are not leading Christian lives.

"They are cheating the people of knowing the mystery of God," he said.

As The Charlotte Observer reported last week, Coontz was indicted on three counts of failure to pay taxes and four counts of aiding and assisting in the filing of false tax returns.

The televangelist and author of several books on the topic of seed giving that he says can make people rich, claimed as business expenses his family's $1.5 million condo, along with a fleet of luxury cars, including three BMWs, two Ferraris, a Maserati and a Land Rover.

The federal criminal bill of indictment further states that Coontz provided no proof that his Regal 2500 boat, 400 charges at movie theaters, $228,000 in clothing purchases and $140,000 in meals and other entertainment were all business expenses.

U.S. Attorney Jill Rose said when announcing the charges: "This is a classic example of 'Do as I say, not as I do.'"

"As a minister, Coontz preached about receiving and managing wealth, yet he failed to keep his own finances in order. Coontz will now receive a first-hand lesson in 'rendering unto Caesar' that which is due," Rose added.

His lawyer, Mark Foster of Charlotte, said in a statement that Coontz "unequivocally asserts his innocence ... and will vigorously defend himself against these charges."

"Todd Coontz has always endeavored to follow the law and to be a good citizen, father, and minister. He trusted others to manage his finances and taxes for him and was shocked to find out he was under criminal investigation by the IRS," Foster said, outlining his expectation that the jury will find his client not guilty after hearing the evidence.

Anthony told CP, however, that he's "very thankful that the IRS finally took some action," both on Coontz and on televangelist Benny Hinn.

Hinn, who has asked his supporters in the past to step up to "higher seed-level giving" by donating $1,000 to his ministry, basing his request on Coontz's financial teachings, admitted back in April that criminal investigators from the IRS and inspectors from the U.S. Postal Service had raided his offices in Grapevine, Texas.

Hinn said he's "cooperating fully with the governmental entities" who are "reviewing certain operations of the Church," but did not provide further details.

Anthony added that televangelists such as Hinn and Coontz like to "give each other credit," and build their own ego.

"There is more fraud committed in the name of God than any other fraud in the world," he said.

it's in the neighborhood of $55 billion for fraud, and about $49 billion for missions

"We just found out that there's now more clerical fraud, ecclesiastical fraud than there is money given for missions. And now, this year, it's in the neighborhood of $55 billion for fraud, and about $49 billion for missions," he explained.

"They are not feeding the hungry or clothing the naked or housing the homeless, they are building themselves mansions and multiple jet planes," he said of televangelists who commit fraud.

"It's heresy that's worse than almost any heresy that I know of," the Trinity Foundation president continued. "Jesus warned of it. The only time I'm aware that He said He hated something [was] the doctrine of Balaam and the doctrine of Nicolaitans in the book of Revelation."

Anthony noted that while the doctrine of Balaam talks about mixing religion with politics and money; the doctrine of Nicolaitans preaches success in the world in the name of God.

"There's no End Times revival — it's an End Times apostasy, and we're now seeing the greatest apostasy that the world has ever known," he positioned.

The Trinity Foundation, he said, has submitted 38 reports to the Senate Finance Committee on abuses to the tax code and on ecclesiastical fraud that is being committed.

Anthony said that while the committee promised that there would be hearings, at the end nothing was done. He claimed that many politicians are afraid of those in the Christian community who preach "the success theology."

"They hire the nation's best attorneys, and ex-IRS directors," he said of fraud suspects.

"It just infuriated me," he said of the committee's inaction.

The Trinity Foundation also sent CP Anthony's unpublished comments in an interview with WSOC-TV Charlotte four years ago when when Coontz asked viewers to send him a $273 'Recovery Seed' donation to experience a "supernatural change in 90 days." The number 273 is also the number to his $1.5 million condo.

"There are many thousands that are victims that are giving their money under false pretenses, false promises. It's a sham. In any other society it would be criminal. But in religious broadcasting it's the soup du jour.

"There is no accountability for the ministers. They get by with anything they want to do because prosecutors and law enforcement agencies in this country do not want to go after religious figures," Anthony said.

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Former French budget minister who led crusade against tax evasion jailed for tax fraud
Reuters
Chine Labbe
08 December 2016

Gendarmes escort French former budget minister Jerome Cahuzac (C) as he leave the Paris courthouse following his tax fraud and money laundering trial's verdict on December 8, 2016.

PARIS — A former minister who led a French government crackdown on tax evasion was sentenced to three years in jail on Thursday for hiding an offshore bank account of his own, in a scandal that deeply embarrassed President Francois Hollande.

A Paris court found Jerome Cahuzac, a cosmetic surgeon by trade who was made budget minister when Hollande won power in 2012, guilty of tax fraud and money laundering.

The verdict marks the end of a saga that shocked France and shook Hollande, who promised as he took power that his government would be beyond reproach after years of corruption accusations that dogged his predecessors.

Cahuzac, who specialized in hair transplants and consultancy work for drugs companies before becoming a minister, resigned in disgrace in 2013 when he admitted having held an undeclared account over 20 years, first in Switzerland and later in Singapore.

Prior to that he had repeatedly denied the existence of such an account, once in particularly dramatic fashion in a declaration in the lower house of parliament.


After ultimately admitting he had lied, Cahuzac, now 64, was also expelled from the Socialist Party, of which he been a member since the 1970s.

Hollande, whose term ends in May 2017 and who said last week he would not seek a second one, at the time condemned what he called an unforgivable moral error.

Reyl bank of Geneva was also fined 1.875 million euro for its part in the affair.

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