COURT FILE NO.: CR-3796/14 DATE: 20180921

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

ANISSAH AUCKBARAULLEE

S. McIntyre, for the Crown

A. Auckbaraullee, Self-Represented

HEARD: September 25, 26, 28, 29, October 2-6, November 28, 2017, January 22, March 20, May 23, and July 6, 2018

REASONS FOR JUDGMENT

GARTON J.

TABLE OF CONTENTS

INTRODUCTION.. 1

OVERVIEW... 1

WITNESSES. 4

POSITION OF THE PARTIES. 5

EVIDENCE.. 8

Interview of Ms. Auckbaraullee by ISN Investigators on November 18, 2010. 8

Testimony of Kathleen Stepic (previous married name Lamonday) 11

New Vendor Forms. 13

The Signature Book. 14

Cheque-runs. 14

Telephone Call from TD Bank in October 2010. 15

The Eight Fraudulent Cheques and Related Documents. 16

Testimony of John Simone. 16

OHA History. 16

New Vendor Forms: General Background. 19

Accessing the Software for Cheque-runs. 19

The Cheque-runs: Process, Review, and Approval 21

New Vendor Forms: Additional Background and Approval Procedure. 23

Access to Ms. Auckbaraullee’s Files and Computer Programs. 25

Discovery of the Fraud. 26

Discovery of Other Fraudulent Cheques. 26

The Missing Cheque Summaries. 27

Testimony of Doug Miller. 28

OHA History. 28

The Filing Cabinet in the Hall 28

Discovery of the Fraud. 29

The Hiring of Students and Temporary Workers. 30

New Vendor Forms. 30

The Cheque-runs: Process, Review, and Approval 30

The September 29, 2010 Cheque-run. 32

The October 20, 2010 Cheque-run. 33

Policy Against Sharing Passwords. 35

Using SunSystems. 35

Testimony of Warren DiClemente. 35

Testimony of Isabella Wai 36

Testimony of Sushma Mahoobani 39

Testimony of Agnes Cho. 41

Testimony of Peter Stepic. 43

Access to SunSystems. 43

Access to Cheque Scribe. 44

Temporary Workers. 44

OHA Password Policy. 44

Access to Software for Cheque-runs. 44

Testimony of Michael White. 45

Testimony of Eric Pinto. 47

Particulars of the Eight Fraudulent Cheques. 48

1. June 17, 2010: Cheque No. 170824, payable to “Sarnia H Improvement” in the amount of $12,000.00 48

2. June 29, 2010: Cheque No. 170862, payable to “H.G Distributors” in the amount of $16,525.00 49

3. June 29, 2010: Cheque No. 170865, payable to “Elite Distributors,” in the amount of $14,850.00 51

4. September 24, 2010: Cheque No. 171761, payable to “H. G Distributors” in the amount of $15,000 53

5. September 29, 2010: Cheque No. 17809, payable to “H.G. Distributors,” in the amount of $9,250.00 55

6. September 29, 2010: Cheque No. 171818, payable to “H.U.S. Services” in the amount of $13,750.00 56

7. September 29, 2010: Cheque No. 171833, payable to “JN Distributors” in the amount of $8,750.00 61

8. October 20, 2010: Cheque No. 172058, payable to “M.W. Management” in the amount of $9,755.00 62

THE LAW RELATING TO FRAUD.. 66

The Elements of the Offence of Fraud. 66

EVALUATING CIRCUMSTANTIAL EVIDENCE.. 68

APPLICATION OF W.(D.) 69

ANALYSIS AND FINDINGS. 69

Has the Crown established beyond a reasonable doubt that Kathleen Stepic, either alone or in conjunction with Peter Stepic, did not commit the fraud?. 70

Ms. Stepic’s Absence from Work on September 24, 2010, when the Cheque to H.G. Distributors was Printed 71

Ms. Stepic’s Reaction to the Call from TD Bank re: the Cheque Issued to H.U.S. Services on September 29, 2010. 71

Ms. Stepic’s Ties to the Education Department 72

The New Vendor Forms and John Simone’s Forged Signature. 74

The Cheque-run on October 15, 2010. 77

The Changing of Ms. Auckbaraullee’s Password to her Computer in March/April 2010. 78

Conclusion as to whether Ms. Stepic Committed the Fraud. 84

Has the Crown established beyond a reasonable doubt that Mr. Simone did not commit the fraud? 85

The Cheque Summaries. 87

Other Witnesses. 88

Isabella Wai 88

Sushma Mahoobani 89

Eric Pinto. 90

Michael White. 91

Agnes Cho. 91

Has the Crown established beyond a reasonable doubt that Ms. Auckbaraullee committed the fraud? 91

The ISN Interview and the Application of W.(D.) 91

Weighing the Circumstantial Evidence. 95

CONCLUSION.. 106

INTRODUCTION

[1] The accused, Anissah Auckbaraullee, age 51, is charged with defrauding the Ontario Hospital Association [“OHA”] of approximately $90,000 between June 17 and October 20, 2010. The indictment reads as follows:

Anissah Auckbaraullee stands charged that she, sometime between and including the 17th day of June in the year 2010 and the 20th day of October in the year 2010, at the City of Toronto, in the Toronto Region, by deceit, falsehood or other fraudulent means, did defraud Ontario Hospital Association of a sum of monies of a value exceeding five thousand dollars, contrary to section 380 (1)(a) of the Criminal Code.

[2] On July 6, 2018, I found Ms. Auckbaraullee guilty as charged, with reasons to follow. These are those reasons.

OVERVIEW

[3] The OHA is a non-profit organization that represents 154 public hospitals in Ontario. It provides various services to its members, including advocacy, collective bargaining, HR support, and education. It also supports other non-profit organizations, as well as long-term care facilities.

[4] On October 28, 2010, the Royal Bank of Canada (“RBC”) contacted OHA’s Manager of Finance, John Simone, regarding a cheque that a person was attempting to deposit to an account that had just been opened that day. The cheque was made payable to M.W. Management in the amount of $9,755. Mr. Simone requested that a hold be placed on the cheque while he looked further into the matter.

[5] Upon learning that no one within OHA had ever heard of this company, Mr. Simone launched an internal investigation. That investigation uncovered a fraudulent scheme in which eight cheques to six different vendors were issued by OHA between June and October 2010 based on fraudulent invoices or cheque requisitions for goods or services that were never ordered by or provided to OHA. The names and locations of the six vendors were: Sarnia H. Improvement, in London; H.G. Distributors and Elite Distributors, both of which were in Brampton; H.U.S. Services, in Toronto; JN Distributors, in Bradford; and M.W. Management in Toronto.

[6] Bank records indicate that Ontario business licences were issued to each of these six enterprises, and that their respective bank accounts were opened only days or weeks before the cheques were deposited or, in the case of M.W. Management, were attempted to be deposited. The total loss to OHA was $80,370.

[7] “HealthAchieve” is an annual conference run by OHA’s Education Department for hospital executives and administrative staff. It is held every November at the Metro Toronto Convention Centre. All the fraudulent invoices or cheque requisitions referenced this event, although some of those references were rather vague or ambiguous. Supporting documents for the issuance of the cheques lacked the requisite information and contained spelling errors, form irregularities, and forged signatures. In some instances, there were no invoices or back-up documents.

[8] Ms. Auckbaraullee was hired by OHA in January 2005 as the Accounts Payable clerk. As such, she was responsible for issuing cheques to OHA’s vendors for services and products.

[9] At the time that the fraudulent cheques were produced, the computer located in Ms. Auckbaraullee’s work station was the only location where cheques could be printed. The following steps were required to print a cheque from Ms. Auckbaraullee’s computer:

1. Log into Ms. Auckbaraullee’s computer with Ms. Auckbaraullee’s Windows ID and password. The Cheque Scribe program (described below) could only be accessed by logging into Ms. Auckbaraullee’s computer using Ms. Auckbaraullee’s personal Windows user ID and password.

2. Log into SunSystems. This was the accounting software used by OHA. The program allowed users to input invoices and queue cheques to be printed on Cheque Scribe (described below). Select employees had their own user names and passwords to access this software. Any of these user names and passwords could be used; Ms. Auckbaraullee’s personal SunSystems password was not required.

3. Log into Cheque Scribe. Cheque Scribe was the software that printed the cheques after they were queued for printing in SunSystems. Cheque Scribe could only be accessed using Ms. Auckbaraullee’s Cheque Scribe user ID and password, along with a FOB, which was a secondary security feature. Ms. Auckbaraullee’s Cheque Scribe user ID and password could not be changed or overridden. When Ms. Auckbaraullee was away on vacation or on sick leave, the person covering for her obviously required the password for Cheque Scribe in order to print the cheques. The only OHA employees who were known to have that password were Ms. Auckbaraullee, John Simone, and the Accounts Receivable clerk, Kathleen Stepic.

(A note regarding the “Windows” terminology: Please note that the Windows operating system was rarely referenced during witnesses’ testimony; however, I am satisfied that this is what the witnesses were referring to when they spoke of Ms. Auckbaraullee’s “computer password.” For the purpose of clarity, I will employ the terms “Windows ID and password” below so as to differentiate between the passwords for (1) Ms. Auckbaraullee’s computer, (2) SunSystems, and (3) Cheque Scribe.)

[10] The process of printing a batch of cheques is referred to as a “cheque-run.”

[11] Generally speaking, an invoice would set out the amount owing for each particular cheque. Cheque Scribe allowed cheques for amounts under $25,000 to be printed with the electronic signatures of Doug Miller, the Chief Financial Officer of OHA, and Tom Classen, OHA’s Chief Operating Officer.

[12] The OHA required invoices to be stamped by the department that had procured the goods or services. The stamp required that certain information be filled out in various boxes, including codes that identified the department, and the amount of HST or GST being charged. Two signatures were required – one to confirm the accuracy of the invoice and that the goods or services had been received by OHA, and another to authorize payment. Only certain people were authorized to sign for invoices in amounts between $5,000 and $25,000. After an invoice was approved and authorized, it was sent to Accounts Payable for Ms. Auckbaraullee to process.

[13] The stamp entries on the fraudulent invoices and cheque requisitions contained a number of errors. The codes for the Education Department were sometimes not written in the correct boxes. None of the invoices or cheque requisitions set out the tax that was to be charged. In addition, a number of invoices were missing entirely.

[14] As stated, when an invoice was delivered to OHA, it was stamped and coded before being delivered to Ms. Auckbaraullee or put in her inbox. Ms. Auckbaraullee was then required to verify that the vendor had been entered into SunSystems. If the vendor was not in the system, Ms. Auckbaraullee was required to fill out a New Vendor form, which she passed on to John Simone, along with the invoice or cheque requisition, for his approval and signature. Mr. Simone would verify that the address and information on the form were correct. Mr. Simone denied having seen or approved any of the New Vendor forms, fraudulent invoices, or cheque requisitions relating to the eight fraudulent cheques.

[15] Cheques were usually printed on Wednesdays, although they could be printed on any day. Cheque Scribe produced a Payment Listing with each cheque-run. The Payment Listing included the cheque number, the payee’s name and code number, the date and time that the cheque had been printed, and the amount of the cheque.

[16] The Payment Listing also indicated the operator who had printed the cheques. Ms. Auckbaraullee was listed as the operator who did the cheque-runs that produced all eight fraudulent cheques: “AAU,” which contains the first initial of her first name and the first two initials of her last name, appears under the heading “Operator” for all of those runs. However, the designation of her as the operator did not necessarily mean that she printed the cheques: Cheque Scribe always designated Ms. Auckbaraullee as the operator even when Ms. Stepic or Mr. Simone ran the cheques. This stemmed from the fact that Ms. Auckbaraullee’s password was the only password that could be used to access Cheque Scribe, and that password could not be changed.

[17] When the cheque-run was completed, the cheques and supporting documents were sent to Doug Miller for his review. After his approval, they were returned to Ms. Auckbaraullee, who removed the cheque stubs, put the cheques into envelopes, and took them to the mailroom, where they were stamped, sealed, and placed in a bin with other mail. The mail was then picked up by a courier, who took it to Canada Post. The cheques were not in a locked or secure place pending pick-up by the courier.

[18] Occasionally, cheques were not mailed but would be picked up by the vendor. The vendor in these instances was usually nearby; for example, a vendor from the food court in the same building where OHA was situated. Cheques issued to a staff member might also be picked up as opposed to being mailed.

[19] A request to pick up a cheque would be made to Ms. Auckbaraullee. Cheques could be left with the receptionist for pick-up. There was no specific protocol followed with respect to hand-delivered cheques.

[20] With the exception of the cheque to M.W. Management, which was never deposited as a result of the hold put on it, there was a very short period of time between the printing of the fraudulent cheques and the depositing of them into bank accounts. In some instances, the cheques were deposited the day after they were printed, from which it may be inferred that they were not mailed. Two of the cheques had no address and therefore could not have been mailed. They would have needed to be picked up or delivered to the vendor in some other way.

[21] There is no evidence linking Ms. Auckbaraullee to any of the six businesses, their owners, or their respective bank accounts. There is no evidence of any financial gain by Ms. Auckbaraullee as a result of this fraud. For example, there was no evidence of large amounts of money being deposited into her bank account, or of her or her family members living beyond their means. No financial records relating to Ms. Auckbaraullee were filed as exhibits.

[22] Following the discovery of the fraud, Mr. Simone contacted the police, who recommended that OHA retain a private firm to conduct an investigation. OHA hired Investigative Solutions Network Inc. (“ISN”).

[23] Two ISN investigators, David Perry and Ronald Wretham, interviewed nine OHA employees. The interview of Ms. Auckbaraullee, which was about two hours in length, was conducted on November 18, 2010. The audio recording and transcript of the interview were entered as exhibits at this trial.

[24] Ms. Auckbaraullee did not testify. However, during the ISN interview, she denied any wrongdoing. She stated that she felt some responsibility for OHA’s financial loss because she had overlooked or failed to notice various deficiencies in the paperwork when processing the fraudulent invoices and printing the cheques, but denied any knowledge of the fraudulent scheme.

[25] The principles in R. v. W.(D.), 1991 CanLII 93 (SCC), [1991] 1 S.C.R. 742, 63 C.C.C. (3d) 397, apply.

[26] Since the Crown’s case depends on circumstantial evidence, the Crown must demonstrate that an inference of guilt is the only reasonable inference available on the totality of the evidence: R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, at para. 55.

WITNESSES

[27] All of the Crown witnesses, with the exception of David Perry, were OHA employees. They included the following:

1. David Perry, the founding partner and Chief Executive Officer of ISN, who interviewed Ms. Auckbaraullee, along with his partner, Ronald Wretham;

2. Kathleen Stepic (previous married name Lamonday), the Accounts Receivable clerk, who also performed the duties of the Accounts Payable clerk when Ms. Auckbaraullee was away on vacation or on sick leave;

3. John Simone, the Manager of Finance. Ms. Auckbaraullee, Ms. Stepic, and the Budget and Planning Analyst, Agnes Cho, reported to him;

4. Doug Miller, the Chief Financial Officer, who is now retired. Mr. Simone reported to him;

5. Warren DiClemente, who was Vice President of Education Services and Chief Operating Officer in 2010. He retired in 2014;

6. Isabella Wai, the Director of Exhibits in the Education Department, who was in charge of HealthAchieve. Ms. Wai was responsible for soliciting vendors to sign up for either booth space or sponsorship. She reported to Mr. DiClemente;

7. Sushma Mahoobani, the Coordinator of Exhibits for HealthAchieve and Ms. Wai’s administrative assistant;

8. Peter Stepic, the Network Administrator and main IT person at OHA in 2010. He and Kathleen Lamonday, now Kathleen Stepic, were married in 2015;

9. Agnes Cho, the Budget and Planning Analyst in the Finance Department;

10. Michael White, the Mailroom and Facilities clerk, who reported to Doug Miller; and

11. Eric Pinto, OHA’s receptionist since 1995.

POSITION OF THE PARTIES

[28] The evidence indicates that the same person within OHA was responsible for the fraud relating to all eight cheques. The main issue is identity – that is, whether the Crown has established beyond a reasonable doubt that Ms. Auckbaraullee was that individual.

[29] The only employees who were known to have the knowledge, means and ability to print cheques were Ms. Auckbaraullee, Mr. Simone, and the Accounts Receivable clerk, Kathleen Stepic. Each of them knew the passwords required to access SunSystems and Cheque Scribe, had access to the Cheque Scribe FOB, and knew how to print cheques using that software. Ms. Stepic was trained by Ms. Auckbaraullee and Mr. Simone in the role of Accounts Payable clerk so that she could cover for Ms. Auckbaraullee when Ms. Auckbaraullee was absent.

[30] The position of Crown counsel, Ms. McIntyre, is that Ms. Stepic and Mr. Simone were credible witnesses, and that their evidence, which serves to refute their involvement in the fraud, should be accepted. Ms. McIntyre noted that Ms. Stepic was not at work on September 24, 2010, when one of the fraudulent cheques was printed. Similarly, Mr. Simone was not in the office on October 20, 2010, when the fraudulent cheque to M.W. Management was printed. By contrast, Ms. Auckbaraullee was at work on each of the days when fraudulent cheques were printed.

[31] Ms. McIntyre submits that Ms. Auckbaraullee’s denial of involvement to the ISN investigators on November 18, 2010, is not credible. She submits that Ms. Auckbaraullee’s explanation as to why some invoices and other back-up documents are missing – that they were misfiled by temporary workers or summer students, or taken by other employees – should be rejected, and that those documents never existed in the first place. As for the back-up documents that were produced, Ms. McIntyre submits that Ms. Auckbaraullee forged the signatures of those employees authorized to approve payment of various expenses, and that she also forged Mr. Simone’s signature on three New Vendor forms. Ms. McIntyre noted that Ms. Auckbaraullee had access to OHA’s book of signatures, which was kept at her work station and which contained the signatures of employees authorized to approve payment of invoices, cheque requisitions or other expenses. Ms. Auckbaraullee was allowed to take that book home with her for a week in June 2010 for the purpose of updating it, although she never completed that task.

[32] Crown counsel submits that Ms. Auckbaraullee had a motive to commit the fraud, as she was under some financial pressure. She was supporting her parents in Mauritius and, on occasion, had asked for payroll advances.

[33] The Crown submits that when the circumstantial evidence is considered as a whole, the only reasonable inference is that Ms. Auckbaraullee perpetrated the fraud.

[34] Ms. Auckbaraullee submits that the Crown has not met its burden. The position of Ms. Auckbaraullee is that Kathleen and Peter Stepic worked together to commit the fraud. She submits that Peter Stepic accessed or changed Ms. Auckbaraullee’s password to her Windows ID and/or SunSystems, which enabled Ms. Stepic to process the fraudulent invoices and print the fraudulent cheques. Ms. Auckbaraullee noted that Peter Stepic was not interviewed by the ISN investigators, who were unaware that he and Kathleen – formerly Kathleen Lamonday – were in a relationship by November 2010. Ms. Auckbaraullee submits that in June 2010, Peter and Kathleen Stepic were more than “just friends,” as asserted by Ms. Stepic in her testimony.

[35] Ms. Auckbaraullee noted that Ms. Stepic worked more closely with those in the Education Department than did Ms. Auckbaraullee. She submitted that Ms. Stepic was therefore more likely to have committed the fraud, as all the fraudulent cheques were related to the conference organized by that department. She also noted that there was some evidence, albeit of a hearsay nature, that Ms. Stepic was under some financial pressure around the time that the fraudulent cheques were printed.

[36] Ms. Auckbaraullee submits that the cheque summaries show that she did not print the fraudulent cheques. The “cheque summaries” were a record-keeping document that Ms. Auckbaraullee was required to complete after every cheque-run. Each cheque summary was composed of a one-line, handwritten entry on a log sheet that stated the date of the run, the numbers of the first and last cheques printed in that run, the total number of cheques printed, and the initials of the person who did the run. Ms. Auckbaraullee kept the cheque summary sheets in a binder at her work station. The following is an approximate visual:

DATE

CHQ # FROM

CHQ # TO

RUN BY

Example 1

1

100

100

A.A

Example 2

101

200

100

A.A.

[37] The column without a heading was used to designate the total number of cheques printed in each cheque-run. Most times, that column was left blank. It was not until after the fraud was discovered that this column was consistently filled in.

[38] After reviewing the cheques and the Payment Listing, Doug Miller would place his initials at the end of the line beside the “Run By” column, thereby authorizing the mailing of the cheques to the vendors. Because there was no column for Mr. Miller to place his initials, Mr. Miller’s initials for separate cheque summaries often ran close together. Accordingly, it was sometimes difficult to determine precisely which cheque summary entries had been initialled by him without giving the document closer scrutiny.

[39] Ms. Auckbaraullee noted that the initials under the “Run By” column for September 29 and October 20, 2010, were not identified as belonging to her, from which she asks the court to infer that she did not do those runs or print the fraudulent cheques that those runs produced.

[40] In terms of Mr. Simone’s evidence, Ms. Auckbaraullee asks the court to infer that he purposely withheld the cheque summaries from the ISN investigators. The Crown eventually produced the summaries dating from September 1 to December 23, 2010, but OHA could not locate the summaries for the month of June 2010. One fraudulent cheque was printed on June 17, and two were printed on June 29.

[41] Ms. Auckbaraullee noted what she asserts are disparities between Mr. Simone’s evidence and that of Ms. Stepic. These alleged disparities relate to the passwords to Ms. Auckbaraullee’s computer that Ms. Stepic required when acting as the Accounts Payable clerk while Ms. Auckbaraullee was on vacation. For example, Ms. Stepic testified that Mr. Simone gave her the password to Cheque Scribe. Mr. Simone did not specifically recall sharing that password, although he acknowledged that Ms. Stepic would have to know it in order to print cheques when Ms. Auckbaraullee was away. Ms. Auckbaraullee also submits that there was a conflict between the evidence of Ms. Stepic and Mr. Simone in terms of whether Mr. Simone authorized Peter Stepic to override Ms. Auckbaraullee’s password to her computer when Ms. Auckbaraullee was on vacation in March/April 2010.

[42] Ms. Auckbaraullee submits that even if the Crown has established that she printed the fraudulent cheques, it has not been established that she did so knowing that the cheques were fraudulent.

[43] Ms. Auckbaraullee noted that Mr. Simone failed to mention during his testimony that he had authorized the installation of SunSystems on Sushma Mahoobani’s computer. She submits that a staff member in the Education Department could have accessed SunSystems from Ms. Mahoobani’s or Eric Pinto’s computer, and entered fraudulent invoices onto SunSystems.

[44] Ms. Auckbaraullee submits that the missing back-up documents and New Vendor forms are attributable to misfiling by temporary workers, and/or the deliberate taking of documents by other OHA employees.

EVIDENCE

Interview of Ms. Auckbaraullee by ISN Investigators on November 18, 2010

[45] Mr. Perry described Mr. Auckbaraullee as pleasant during his and Mr. Wretham’s interview of her. She was co-operative and answered all of their questions.

[46] In terms of her background, Ms. Auckbaraullee stated that she had worked for Woolworth/Woolco doing their payroll and accounting for 12 years. When that company went bankrupt, she got a job with Signature Vacations, where she was an accounting supervisor for nine years. She then got a job at Burger King’s head office, where she worked for one-and-a-half years before taking the position of the Accounts Payable clerk at OHA. She had held that job since January 2005. Although she has a lot of experience in accounting, she is not a certified accountant.

[47] When asked whom she believed was responsible for the eight fraudulent cheques, Ms. Auckbaraullee stated that it had to be the person who put the fraudulent invoices and cheque requisitions in her inbox.

[48] During the interview, Ms. Auckbaraullee took some responsibility for the fraud in the sense that she acknowledged that she processed the documents without paying close enough attention to them, and failed to notice certain deficiencies. She added that her inbox was always “packed,” and there were a lot of cheques to process. Every OHA employee, and not just individuals in the Education Department, could authorize and send invoices to Accounts Payable. The only exceptions were herself and Kathleen Stepic, who were not allowed to sign or approve anything: “Everything that we do in our department has to go to John [Simone] and Doug [Miller].”

[49] Ms. Auckbaraullee stated that she had been criticized in the past by Mr. Simone and Mr. Miller for not taking enough time to question problematic paperwork, and had been told to “pay more attention.” At the time that she processed the fraudulent invoices or cheque requisitions, she had not noticed anything suspicious about them. In hindsight, she has asked herself why she did not see that there was something “fishy” about them. Since the discovery of the fraud, she has been more diligent and asks Mr. Simone more questions regarding the adequacy of the documents that she receives. Prior to the fraud, she did not read every line on an invoice to determine exactly what it was for. When asked what she would need before printing a cheque, Ms. Auckbaraullee laughed and stated, “Nothing, basically nothing. I would just put it in the system.” She also stated, “When I look at, like if you give me one of these invoices, you put it in my inbox, all I’m doing is, okay, it’s going in and I print the cheque and it’s gone.”

[50] Two signatures were required on an invoice, one of which had to be that of a supervisor or manager. However, Ms. Auckbaraullee told Mr. Perry that she processed invoices even when there was only one signature: “I would just put them through. Everything, it will just go in the system.”

[51] Ms. Auckbaraullee stated that it was hard for her to recognize signatures. There were also a lot of new people on staff. The only signature that she recognized on the fraudulent invoices or cheque requisitions was that of Ms. Wai. She was of the view that people should have been required to print their full names below their signature, although she never raised this matter with any of her superiors.

[52] Ms. Auckbaraullee stated that as the Accounts Payable clerk, she was required to fill out New Vendor forms. These forms were co-signed by John Simone, who would ensure that the address was properly on the system.

[53] Ms. Auckbaraullee stated that after a cheque-run, the cheques, along with the Payment Listing and back-up documents (such as invoices or cheque requisitions), were given to Mr. Miller for his review. Mr. Miller was also given the cheque summary. After reviewing the cheques and back-up documents, he indicated his approval by initialing both the Payment Listing and the cheque summary.

[54] The cheque summaries mentioned by Ms. Auckbaraullee during her interview and which would have included the cheque-runs that printed the eight fraudulent cheques were not provided to the Crown prior to trial. Mr. Perry testified that he turned over all the materials provided to him by OHA to the Financial Crimes Unit of the Toronto Police Service, and that those documents are contained in Exhibit 4. The cheque summaries are not included in that exhibit.

[55] During cross-examination of John Simone, Ms. Auckbaraullee asked for disclosure of the cheque summaries. Crown counsel asked OHA to provide them. The cheque summary sheet listing the cheque-runs from September 1 to December 23, 2010, was eventually located and made an exhibit (Exhibit 7). The cheque summary sheet covering the June 2010 cheque-runs was never produced as it could not be located.

[56] Ms. Auckbaraullee told the investigators that she accidentally injured her finger in a blender on September 26, 2010, and required surgery to repair it. After incurring this injury, she would ask the receptionist, Eric Pinto, whose desk was on the same floor as the mailroom, to perform the task of putting the cheques into envelopes. When he was finished, she would ask him to put the envelopes in a box in the mailroom for pick-up.

[57] Ms. Auckbaraullee told Mr. Perry that the majority of OHA cheques were sent by regular mail. She could not comment on the validity of the addresses on the cheques, as she did not verify them. If a cheque was not delivered, it would be returned to OHA.

[58] Ms. Auckbaraullee told Mr. Perry that she printed “lots of cheques” without an address. In such cases, a sticky note attached to the invoice would state “Do not mail,” “Company moving,” or “Will be delivered.” Rather than leaving these sticky notes on the invoices, she would put them on her chair. She had been criticized by John Simone and Doug Miller for not leaving them on the documents.

[59] Ms. Auckbaraullee later acknowledged during her interview that between June and October of 2010, there were not that many cheques printed without an address.

[60] When asked to whom she would have delivered the two fraudulent cheques that did not include an address, Ms. Auckbaraullee initially stated that she had no idea. She then recalled delivering one such cheque to someone in the Education Department, but could not recall who. She then stated that she did not want to name names as she might be wrong, and it would not be fair to get that person into trouble. She later stated that Isabella Wai, who was in charge of HealthAchieve, requested that “lot of cheques” be returned to her rather than being mailed. Ms. Wai would attach sticky notes to invoices with the words, “Do not mail.” According to Ms. Auckbaraullee, a lot of cheques were also returned to the Education Coordinator, Lena Pallatto, as well as to Mary Romero, who was in the same department.

[61] Prior to the fraud being discovered, there was no procedure in place to document the fact that a person picking up a cheque had, in fact, received it.

[62] When asked if she hand-delivered any of the eight fraudulent cheques, Ms. Auckbaraullee replied, “No, not that I recall. No.” She agreed that some of them had been printed relatively recently or not that long before her interview, which was on November 18, 2010.

[63] Ms. Auckbaraullee stated that the majority of cheque-runs were on Wednesdays. However, she could also do cheque-runs on other days, or print a single cheque if there was a deadline to meet or some urgency regarding a deposit. She did not require authorization for such matters. After printing the cheque, she would either put it in the mail or hand-deliver it to the person who submitted the invoice. She hand-delivered a lot of cheques.

[64] Ms. Auckbaraullee agreed that all the fraudulent cheques were printed from her computer, which was the only computer in the office that could print cheques. If she was not in the office, Kathleen Stepic or John Simone would print them. Ms. Auckbaraullee expressed the belief that no one other than herself, Ms. Stepic, and Mr. Simone had the knowledge and means to print cheques. The previous Accounts Payable clerk, Leslie Carmichael, would know how to operate Cheque Scribe, but she was currently employed in the Human Resources department. Ms. Auckbaraullee did not believe that Ms. Carmichael had done a cheque-run or accessed her computer since Ms. Auckbaraullee had replaced her.

[65] During her interview, Ms. Auckbaraullee stated that she had different passwords that she used to log onto her computer, onto SunSystems, and onto Cheque Scribe. In October 2010, Ms. Auckbaraullee was off work for a couple of weeks after the surgery on her hand, and Ms. Stepic was covering for her. During that time, Ms. Stepic called and left a message for Ms. Auckbaraullee, stating that Ms. Stepic had asked IT to change Ms. Auckbaraullee’s password from Ms. Auckbaraullee’s father’s name to the name of her daughter. When Ms. Auckbaraullee returned to work, she found that the password to her computer had, in fact, been changed.

[66] Ms. Auckbaraullee told Mr. Perry that when John Simone wanted to do a cheque-run, he prepared it on his own computer using SunSystems. In order to print the cheques, however, he had to come to Ms. Auckbaraullee’s work station and log onto Cheque Scribe using her Cheque Scribe password. If Ms. Auckbaraullee was in the office, he would ask her to print the cheques. Both Mr. Simone and Ms. Stepic did cheque-runs when Ms. Auckbaraullee was on sick leave.

[67] During the interview, Ms. Auckbaraullee was shown copies of the eight fraudulent cheques. She was also shown and questioned about the back-up documents and New Vendor forms relating to those cheques. I will review her responses to those questions when reviewing the evidence pertaining to each cheque.

[68] Ms. Auckbaraullee stated that she had no idea who cashed the eight cheques or whether there was more than one person involved. She denied any involvement in the fraud, as she would never have jeopardized her job for “stupid things” like that.

[69] Ms. Auckbaraullee denied having domestic problems or being pressured by anyone to commit this offence. She stated that although she and her husband are separated, they live in the same house for the benefit of the children. She also stated that her 23-year-old daughter was a manager at Sobeys’ head office, and her son worked with his father. Together, they are able to maintain their house and pay their bills.

[70] The investigators told Ms. Auckbaraullee that when people are in difficult domestic situations, they do things that they normally do not do. They told her that they did not believe that the injury to her finger was caused by an accident with the blender, and stated that if she was in a difficult position at home, they could help her. Ms. Auckbaraullee denied that she was in a difficult domestic situation. She asserted that she was a very happy person and happy with her job. She also told the investigators that if they involved the police, which they stated they intended to do, she would be happy to answer any of the officers’ questions.

Testimony of Kathleen Stepic (previous married name Lamonday)

[71] Ms. Stepic began her employment at OHA as the Accounts Receivable clerk in 2006. She obtained her certificate of accounting from Humber College in 2008. She is still employed by OHA, and has been promoted to the position of Coordinator.

[72] Ms. Stepic married Peter Stepic in 2015. In 2010, Peter was the Network Administrator and main IT employee. In June 2010, she and Peter were “just friends,” and had not as yet started dating.

[73] Ms. Stepic recalled that the 2010 HealthAchieve convention took place in early November, as that was the week that she split up with her husband and left him.

[74] Ms. Stepic testified that she had a good relationship with Ms. Auckbaraullee, whom she met in 2006. They sometimes had coffee together and shared cab rides to HealthAchieve during the conference. They both lived in Brampton and were about a 15-minute drive from each other’s homes. Although they did not see each other outside of work, Ms. Stepic had visited Ms. Auckbaraullee at her house on one occasion in 2007. She described Ms. Auckbaraullee as very friendly and someone who liked to talk to everyone.

[75] Ms. Stepic testified that Ms. Auckbaraullee disclosed to her that her husband physically abused her. Ms. Stepic never observed any bruises on Ms. Auckbaraullee. However, as previously noted, there was an incident in September 2010 when Ms. Auckbaraullee suffered a serious injury to her finger. She called Ms. Stepic and told her that during an argument with her husband, she had “swiped at something that was on the table” and cut her finger very badly. She also stated that she was not going to tell anyone about what had happened as she did not want everybody to know about it.

[76] Ms. Stepic testified that Ms. Auckbaraullee was always busy in her role as the Accounts Payable clerk. If Ms. Stepic had some free time, she would sometimes help her out by coding invoices with vendor codes and entering them into the system. She also helped Ms. Auckbaraullee match cheques to invoices, and would separate or tear off the cheques from the stubs in preparation for them to be mailed out in envelopes.

[77] Ms. Stepic testified that she covered for Ms. Auckbaraullee in March 2010, when Ms. Auckbaraullee was on vacation, and again in October 2010, when Ms. Auckbaraullee was recovering from surgery to repair her injured finger. Ms. Auckbaraullee’s attendance records indicate that she was actually away on vacation in April as opposed to March of 2010. Ms. Stepic would have covered for her from April 9 to 20, 2010.

[78] Ms. Stepic was trained in the Accounts Payable role by Ms. Auckbaraullee and John Simone.

[79] The Accounts Payable role included processing invoices and cheque requisitions. When the amount payable was under $25,000, an invoice or cheque requisition required the signature of the person within the department who was sending it to Accounts Payable, and the signature of a Director within that department.

[80] The information required on an invoice included the date, the vendor’s name and address, a description of the service or product provided to OHA, the cost, a total amount, including tax, and an HST or GST number.

[81] The generic stamp placed on invoices required the following information: the department code, the activity or “initiative” code, the particular expense account that the invoice was assigned to, the amount of the invoice, the amount of GST or HST, the signature of the person signing off on the invoice, and the signature of the Director approving the expense.

[82] The same information required on an invoice was also required on a cheque requisition. However, cheque requisitions did not require a stamp because the information that the stamp called for was already contained within the cheque requisition itself; that is, the account number, the department code, initiative code, and the amount owing. There was a line for two signatures.

[83] Ms. Stepic explained that the accounting software, SunSystems, was used in conjunction with the Cheque Scribe software in order to process an invoice or cheque requisition. Both software systems had to be accessed in order to print a cheque: a cheque batch had to be run from SunSystems in order to prepare it for Cheque Scribe. It was then uploaded to Cheque Scribe, and the cheques were printed. The printing of cheques could only be done at Ms. Auckbaraullee’s work station and using her computer login information.

[84] When covering for Ms. Auckbaraullee, Ms. Stepic required three separate passwords in order to do a cheque-run.

[85] First, she logged onto Ms. Auckbaraullee’s computer using Ms. Auckbaraullee’s Windows ID and password. Ms. Stepic explained that this was necessary because the Cheque Scribe software, which she would ultimately have to access, was only accessible using Ms. Auckbaraullee’s Windows ID and password. If she logged into Ms. Auckbaraullee’s computer using her own or someone else’s Windows ID and password, the Cheque Scribe software would not show up: “I had to log into [Ms. Auckbaraullee’s] computer using her password, because if I had logged into, like, another user, it wouldn’t actually show that software on there, because it was linked to her.”

[86] Ms. Stepic then used her own user name and password to access SunSystems. As the Accounts Receivable clerk, Ms. Stepic was very familiar with SunSystems as she used it on a daily basis. She had access to both Accounts Receivable and Accounts Payable information. As she explained, “You have to go into the same place to enter receivable customer information as well as vendors.”

[87] Finally, Ms. Stepic would log onto Cheque Scribe using Ms. Auckbaraullee’s Cheque Scribe password, which she believed was given to her by John Simone.

[88] Ms. Stepic testified that it could not be determined who did the cheque-run by looking at the Payment Listing produced by Cheque Scribe. Since Ms. Auckbaraullee’s password was the only password that could be used for the Cheque Scribe system, Ms. Auckbaraullee was always identified as the Operator, regardless of whether Ms. Auckbaraullee personally conducted the cheque-run.

[89] Ms. Stepic testified that when she first covered for Ms. Auckbaraullee in March 2010, she did not have Ms. Auckbaraullee’s Windows password. Ms. Auckbaraullee had forgotten to give it to her. When she informed John Simone of the situation, he told her to ask IT to get the password. Ms. Stepic could not recall if she contacted the IT manager, Robert Saeggriato, or if she went directly to Peter Stepic. In any event, it was Mr. Stepic who ultimately overrode or changed Ms. Auckbaraullee’s Windows password. Even though the password was changed, the user ID remained the same. As a result, if Ms. Stepic logged on using Ms. Auckbaraullee’s Windows ID and performed various functions, it would appear as though Ms. Auckbaraullee had performed those functions. However, that would not necessarily be the case with respect to functions performed in SunSystems if Ms. Stepic, after logging into Ms. Auckbaraullee’s Windows ID, logged into SunSystems using her own SunSystems user ID and password.

[90] Ms. Stepic testified that when Ms. Auckbaraullee returned from vacation, she told her what had happened and gave her the new password. Ms. Stepic could not recall what the new password was, but guessed that it was “something generic like P@SSWORD1.” She assumed that Ms. Auckbaraullee changed it again.

[91] Ms. Stepic could not recall if there was a policy in place with respect to sharing passwords. She testified, however, that she never shared any of her passwords.

New Vendor Forms

[92] The role of the Accounts Payable clerk included filling out New Vendor forms for those vendors who were not already entered on SunSystems. This was a weekly occurrence. The form required the name of the vendor, the address, the department requesting that the invoice be paid, whether the payment was for supplies or services, as well as two signatures: the signature of the person filling out the form (the Accounts Payable clerk) and that of their manager (John Simone).

[93] The New Vendor procedure entailed filling out the form, entering the new vendor into SunSystems, and writing the new vendor code at the top of the form. The form was then provided to John Simone for his signature. Once approved, the invoice information for that vendor would then be inputted onto SunSystems.

[94] Ms. Stepic did not specifically recall filling out New Vendor forms, but assumed that she had done so whenever she covered for Ms. Auckbaraullee.

The Signature Book

[95] Ms. Stepic was aware of a binder or signature book that was used to verify signatures on invoice requests or cheque requisitions, and that Ms. Auckbaraullee was updating it. The binder was primarily for the use of the Accounts Payable clerk. Ms. Stepic did not know where it was kept. She never used it when covering for Ms. Auckbaraullee.

Cheque-runs

[96] Ms. Stepic recalled doing one cheque-run in March 2010, and another one when she covered for Ms. Auckbaraullee in October 2010.

[97] Cheque-runs were usually done on Wednesdays. A cheque could also be printed on another day in special circumstances. The batch of cheques to be printed each week was prepared in SunSystems.

[98] Ms. Stepic understood that the preparation of a batch of cheques in SunSystems could only be done from Ms. Auckbaraullee’s computer and, as a result, that was where she prepared the batches of cheques whenever she covered for her. Ms. Stepic later learned from John Simone that the preparation could actually be done from any computer with the SunSystems software, along with a SunSystems user name and password.

[99] Ms. Stepic understood that a function in SunSystems collected all the invoices that had been entered and then prepared a “batch” of all the vendors and invoices that were to be paid.

[100] The cheques were printed from Cheque Scribe, which also generated a Payment Listing. There were usually 60 to 120 cheques printed during a cheque-run. Cheques under $25,000 were printed with the electronic signatures of Doug Miller and Tom Classen.

[101] Ms. Stepic testified that after the cheques were printed, one stub was torn off each cheque and stapled together with the invoice or cheque requisition. They were organized alphabetically in anticipation of Doug Miller’s review, and then filed alphabetically according to vendor name, in the two-drawer filing cabinet located at Ms. Auckbaraullee’s desk. Ms. Stepic was not sure whether this filing cabinet was kept locked. She thought that it was probably unlocked. She recalled having access to it when covering for Ms. Auckbaraullee.

[102] The bottom stub and cheque were torn off and put in a pile to be mailed out or delivered. It was Ms. Stepic’s recollection that cheques for amounts under $25,000 were mailed the same day and before Mr. Miller had reviewed them (or the stubs) and the back-up documents. However, Ms. Auckbaraullee, during her ISN interview, and Mr. Simone and Mr. Miller in their evidence, made no distinction in the procedure followed with respect to cheques for amounts under $25,000, and cheques for amounts over $25,000. It was clear from Mr. Miller’s testimony that he reviewed all the cheques in a cheque-run before the cheques were sent out, regardless of the amount of the cheque. It appears, therefore, that Ms. Stepic was mistaken in this regard.

[103] After the cheque stubs with back-up documentation, such as invoices or cheque requisitions, had come back from Mr. Miller’s review, they were filed in alphabetical order according to vendor in a five or six-drawer filing cabinet located in the main office. That filing cabinet was locked. The keys to open it were kept in Ms. Auckbaraullee’s unlocked desk drawer. Anyone in the finance department had access to this filing cabinet.

[104] When the cheques were ready to be mailed, Ms. Auckbaraullee put them into envelopes. Ms. Stepic stated that she and Eric Pinto sometimes assisted her in this task. The cheques were then taken to the mailroom on the 28th floor. Ms. Stepic delivered them there on occasion. The mailroom was staffed by Michael White and was never locked. It was accessible to anyone who took the elevator up to the 28th floor.

[105] The protocol required that Mr. White be advised when cheques had been delivered to the mailroom. This procedure was implemented because there had been issues in the past where cheques had gone missing. Ms. Stepic could not recall if Mr. White simply had to be notified that the cheques were in the mail room, or if he had to be physically present when the cheques were delivered. Mr. White would then ensure that the cheques were given to the courier, who took them to Canada Post.

[106] Ms. Stepic agreed that anyone within the organization could walk into the mailroom. She also agreed that if that individual began flipping through cheques in the bin awaiting pick-up by the courier, she would not necessarily notice what they were doing.

[107] In the event that a cheque did not have an address, which could occur if it was for a staff expense, it would be hand-delivered. Cheques for vendors in the concourse level of the building, such as food vendors, might also be hand-delivered. Sometimes there would be a request in a cheque requisition that the cheque be returned to a person in the department that submitted it, so that it could be delivered to the vendor. A request that a cheque be couriered could also be noted on the cheque requisition, or made verbally. There was no approval process required for having a cheque couriered. There was no record of whether a cheque had been mailed, couriered, or hand-delivered. It would be possible to print a cheque and take it without anyone knowing.

[108] Other than cheques for staff expenses, Ms. Stepic did not recall seeing any cheques that did not have an address during the times that she covered for Ms. Auckbaraullee.

Telephone Call from TD Bank in October 2010

[109] Ms. Stepic testified that a call from TD Bank was forwarded to her in early October 2010 while she was covering for Ms. Auckbaraullee. The bank wanted to verify that a person attempting to cash an OHA cheque was the person authorized to cash it. Later on in her testimony, when shown a cheque for $13,750.00 payable to H.U.S. Services (Exhibit 4(6)(a)), Ms. Stepic identified it as the cheque that was the subject of this call. The cheque, which was printed on September 29, 2010, and deposited on October 1, 2010, was noted in the Account Listing as related to a speaker’s presentation at HealthAchieve. The cheque had been entered in SunSystems, but Ms. Stepic could not find any of the back-up documents. She consulted Doug Miller, who told her to check with Lina Pallatto, who was responsible for hiring speakers for the conference. When Ms. Pallatto could not find the invoice or any documents relating to this vendor, Ms. Stepic reported back to Mr. Miller, and left the matter with him.

The Eight Fraudulent Cheques and Related Documents

[110] Ms. Stepic testified that all eight cheques were related in some way to HealthAchieve. They were all for amounts under $25,000, which meant that they were printed with the electronic signatures of Doug Miller and Tom Classen.

[111] Ms. Stepic pointed out various errors in the addresses printed on the cheques, and other deficiencies in the back-up documents, which are referred to in these reasons during my review of the evidence pertaining to each cheque. Ms. Stepic testified that she would not have processed any of the cheques, and would have brought the errors to the attention of John Simone.

[112] Ms. Stepic testified that she was at work on the days when the cheques were printed except for September 24, 2010, when the cheque for $15,000 to H.G. Distributors was printed. She took that day off to attend her grandmother’s funeral.

[113] Ms. Stepic testified that in order to do a cheque-run, it was necessary to log on to Ms. Auckbaraullee’s computer using Ms. Auckbaraullee’s Windows ID and password. Otherwise, it would not be possible to access Cheque Scribe. One also needed to know how to enter a cheque or invoice into SunSystems, and to prepare the cheque batch before logging onto Cheque Scribe. In order to log onto Cheque Scribe and print the cheques, one needed to use the Cheque Scribe FOB, and to know Ms. Auckbaraullee’s Cheque Scribe user name and password.

[114] The people with the necessary knowledge and training to do a cheque-run in 2010 included herself, John Simone, and Ms. Auckbaraullee.

[115] Ms. Stepic testified that she did not print any of the eight fraudulent cheques.

Testimony of John Simone

OHA History

[116] John Simone began working at OHA in 2001, and became Manager of Finance in 2008. He occupied that position in 2010, and reported to Doug Miller. He was responsible for journal entries, financial reporting, and investment oversight. Ms. Auckbaraullee, Ms. Stepic and Agnes Cho reported to him.

[117] Mr. Simone testified that his wife previously worked in the Conference section of the Education Department. She did not work in HealthAchieve. She was not a Director, and could not approve any invoice that was over $5000. She was on maternity leave in 2010, but returned to work in September 2010. She is no longer employed at OHA.

[118] Mr. Simone testified that during the course of Ms. Auckbaraullee’s employment at OHA, she spoke to him about various aspects of her personal life. He knew that she had a son and daughter, that she had experienced some marital problems, and was separated from her husband, although they lived under the same roof. He observed that Ms. Auckbaraullee sometimes arrived at work with cuts and bruises.

[119] Mr. Simone was also aware that Ms. Auckbaraullee’s parents, who lived in Mauritius, were ill, and that she sent money to them to help support them. On weekends, she worked for an airline that flew between Toronto and Montreal.

[120] In cross-examination, Mr. Simone was asked whether he regarded all the employees who worked under him in the same way. He stated that he treated everyone exactly the same, although he worried about Ms. Auckbaraullee more than anyone else because of her personal situation and the family pressures she was under.

[121] Ms. Auckbaraullee was dismissed from her job at OHA in early 2011, following the completion of the ISN investigation and pursuant to a decision of senior management. It was not Mr. Simone’s decision.

[122] Mr. Simone testified that Ms. Auckbaraullee and Ms. Stepic appeared to be friends, and “leaned on each other” when going through their respective marital issues. He was not aware of any animosity between them. He knew that Ms. Stepic was “having troubles with her marriage,” and that she was receiving some financial assistance from her father.

[123] Mr. Simone testified that both Ms. Auckbaraullee and Ms. Stepic interacted with staff in the Education Department in their respective roles as Accounts Payable and Accounts Receivable clerks. Ms. Stepic probably had slightly more contact with the Education staff than Ms. Auckbaraullee, although it would be difficult to quantify the difference.

[124] Mr. Simone could not recall when he learned of the romantic relationship between Kathleen and Peter Stepic, who were married in 2015, but it was sometime after the November 2010 HealthAchieve conference. He was unaware as to whether ISN knew of this relationship between OHA’s Accounts Receivable clerk and its main IT person. He also did not know if ISN investigators interviewed Peter Stepic. (Mr. Stepic was not, in fact, interviewed.) Mr. Simone had no input as to which employees were interviewed, as those decisions were made by personnel within Human Resources.

[125] Mr. Simone testified that OHA’s office hours were 9:00 a.m. to 5:00 p.m., but there was some flexibility in this regard. Reception opened at 8:30 a.m. Some staff stayed later than 5:00 p.m. There was nothing to prevent staff from staying until 6:00 or 7:00 p.m., although after a certain time, if they were working overtime, their manager would have to be notified. An employee could continue working after their manager had left for the day.

[126] As the Accounts Payable clerk, Ms. Auckbaraullee was required to process payments and petty cash, cut cheques, and set up new vendors within the system. She was trained by Mr. Simone and the prior Accounts Payable clerk, Leslie Carmichael, who is currently the director of Human Resources.

[127] In terms of overseeing Ms. Auckbaraullee’s work, Mr. Simone testified that “she sat close to me but I wasn’t over her shoulder.” He had other duties, including supporting other organizations, such as The Change Foundation, during the period in which these events took place. He was also responsible for preparing for Finance and Audit committees, and was required to attend various meetings. In overseeing the role of the Accounts Payable and Accounts Receivable clerks, he had “more of an open door, and if anybody had an issue, they could come to talk to me about that.”

[128] Mr. Simone testified that he did not review what Ms. Auckbaraullee or Ms. Stepic inputted into the system on a daily or weekly basis. He might do such a review monthly when updating financial statements for the Finance committee. As the Manager of Finance, he received the monthly bank reconciliation, but that would not indicate whether a particular cheque had been improperly issued. He would not go through every cheque that accompanied the bank statement, but would do “spot-off checks.”

[129] Mr. Simone testified that during July and August, OHA was in “audit mode” as it prepared reconciliations for the auditors. He noted that the Education Department did not do its reconciliation until December, when all the expenses relating to HealthAchieve had been processed. He stated this was probably the reason why the fraudulent cheques, which were issued between June and October, went unnoticed. The reconciliation in December, which entailed a transaction to transaction review, would probably have detected them had Mr. Simone not caught them beforehand.

[130] Mr. Simone testified that during Ms. Auckbaraullee’s performance review, there were comments from other staff members about errors in inputting information, incorrect addresses, and the timing of payments. Mr. Simone discussed these matters, as well as her organizational skills, with Ms. Auckbaraullee. He did not specify during his testimony when this performance review took place.

[131] There were times when a temporary worker or student was hired to do filing for Ms. Auckbaraullee because of her workload. This happened more frequently during the summer months. During the summer, some staff members’ children, who were university students, were also employed and would do filing. None of these individuals was given passwords to SunSystems or Cheque Scribe.

[132] No specific person was dedicated exclusively to assist with filing for Ms. Auckbaraullee. The extra help was called in when there was a backlog of filing. Ms. Auckbaraullee often called in sick. The OHA, in response, made appropriate accommodations for her. Mr. Simone could not recall how often in 2010 a student or temporary worker was hired to assist Ms. Auckbaraullee.

[133] In 2009, when Ms. Auckbaraullee went to Mauritius for her father’s funeral, OHA hired a temporary worker to fill her position. That worker would have been given the passwords necessary to log onto Ms. Auckbaraullee’s Windows ID and access SunSystems and Cheque Scribe in order to print the cheques.

New Vendor Forms: General Background

[134] Mr. Simone explained the process followed by the Accounts Payable clerk in terms of processing invoices. If the vendor was not in the system, Ms. Auckbaraullee would fill out a New Vendor form. That form, along with an invoice, would then be sent to him for approval. If he was not in the office or was away on vacation, Doug Miller would approve the form. If there was no invoice, the New Vendor form would be accompanied by a cheque requisition, along with back-up documents, such as an email, or some supporting information explaining why the vendor was being paid. There were about 10 to 20 New Vendor forms created each week.

[135] Mr. Simone initially created the New Vendor form as a word document and then emailed it to Ms. Auckbaraullee for her regular use. It would have been available on a Finance and Administration shared drive, but a person would have to know where it was saved in order to access it. Some New Vendor forms were simply photocopies of a blank form.

[136] Mr. Simone testified that the form for cheque requisitions was also likely on a shared drive. He noted that the requisitions with respect to M.W. Management appear to have been filled out on a computer. In addition, each department had its own stock of printed cheque requisition forms.

[137] If Mr. Simone approved a New Vendor form, he signed it at the bottom of the page, just below Ms. Auckbaraullee’s signature or initials. Her signature indicated to him that she had reviewed the form and had ensured that the vendor had been properly entered into the system, with the correct address, etc. He relied heavily on her with respect to the accuracy of the New Vendor forms.

[138] Mr. Simone testified that both the Accounts Payable and Accounts Receivable clerks used the same system to set up new vendors.

[139] After the new vendor information had been entered into SunSystems, along with the expenses, the next step was to process the cheques. This entailed filling out accounting entries within SunSystems, which provided a sequence of cheques, each of which was numbered. Once that process was complete, Ms. Auckbaraullee would log onto Cheque Scribe and print the cheques.

Accessing the Software for Cheque-runs

[140] There was only one user ID and password for Cheque Scribe. A FOB, which plugged into Ms. Auckbaraullee’s computer, was also required to log onto Cheque Scribe. It was kept at Ms. Auckbaraullee’s work station. Mr. Simone could not recall exactly where it was kept: “It could have been in her desk filed somewhere. Likely in her desk.” He could not recall whether the drawer was locked. Later on in his evidence, he stated that it was, in fact, kept locked.

[141] The cheque stock or special paper used to print the cheques was “locked away” with Ms. Auckbaraullee.

[142] Mr. Simone testified that SunSystems was installed on five computers at the OHA. All the employees who had access to SunSystems were in the Finance Department, with the exception of the receptionist, Eric Pinto. Mr. Simone believed that Mr. Pinto’s access was limited to Accounts Receivable, and that he would not have known how to access Accounts Payable. However, someone who had a user ID and password for SunSystems could access that system using Mr. Pinto’s computer. Mr. Simone apparently forgot to mention during his testimony that he had authorized Sushma Mahoobani, who worked in the Education Department, to have limited access to SunSystems.

[143] Mr. Simone testified that when someone covering for Ms. Auckbaraullee during her absence was required to do a cheque-run, they would first need to know Ms. Auckbaraullee’s Windows ID and password in order to log onto her computer. They could not use their own Windows ID and password because only Ms. Auckbaraullee’s Windows ID was able to “access those items” – that is, the Cheque Scribe software. Mr. Simone’s evidence in this regard was in accord with Ms. Stepic’s testimony. As Ms. Stepic explained, she had to use Ms. Auckbaraullee’s Windows ID and password to log onto her computer in order for the Cheque Scribe software to “show up.”

[144] Thus, in order for a person who was covering for Ms. Auckbaraullee to do a cheque-run, Ms. Auckbaraullee would have had to give them her Windows password, or IT would have had to reset her password. When a person logged into Ms. Auckbaraullee’s Windows ID using the new password, it would have appeared as though Ms. Auckbaraullee herself had logged in. There would be no way of telling that another individual was covering for her. When Ms. Auckbaraullee returned to work, she would have had to use the new password in order to access her Windows account. Her old password would not work.

[145] Later on in his testimony, Mr. Simone was somewhat uncertain as to whether it would be necessary to log onto Ms. Auckbaraullee’s computer using Ms. Auckbaraullee’s Windows ID and password in order to access the Cheque Scribe software: “I don’t recall if Cheque Scribe was unique to the PC or if it was unique to the user.”

[146] In any event, Mr. Simone was firmly of the view that although Ms. Auckbaraullee’s password to log onto her Windows ID might be shared with Ms. Stepic or someone else covering for her, passwords to log onto SunSystems were not to be shared.

[147] Mr. Simone explained that the next step in terms of processing cheques would be to log into SunSystems. The person covering for Ms. Auckbaraullee could use their own user name and SunSystems password for this purpose. Mr. Simone, Ms. Auckbaraullee, Ms. Stepic, Mr. Miller, Ms. Cho, and Mr. Pinto were the only people who had a SunSystems user name and password. The individuals who could potentially cover for Ms. Auckbaraullee included Mr. Simone, Ms. Stepic, and Mr. Miller. (Mr. Miller testified that he did not, in fact, have access to Cheque Scribe. It appears that he never needed to use Cheque Scribe because he never printed a cheque.) Mr. Simone testified that the only times that he printed a cheque or cheques was when “it needed to be done” and neither Ms. Auckbaraullee nor Ms. Stepic was in the office.

[148] SunSystems’ passwords expired every 30 or 60 days, at which time the user was prompted to change the password. If a person wanted to change their password at some other time, perhaps as a result of having forgotten their password or being locked out after three unsuccessful attempts to log in, they would have to contact IT.

[149] Only a SunSystems “Super User” could change a SunSystems password. Mr. Simone could not recall if he had access to changing SunSystems passwords back in 2010, but IT had the capability of changing them. He was unaware as to whether IT tracked or kept a log of the people who asked to have their password changed.

[150] Mr. Simone testified that the processing of cheques could be done on his own computer using SunSystems. The printing of the cheques, however, could only be done at Ms. Auckbaraullee’s work station. In order to print cheques, he would import the information from his own computer to a USB key. He would then log onto Ms. Auckbaraullee’s computer, log into SunSystems with his own SunSystems password, plug in his USB key, and then log onto Cheque Scribe using Ms. Auckbaraullee’s Cheque Scribe user name and password. He also had to use the Cheque Scribe FOB.

[151] As stated, in order to log onto SunSystems, a person needed their own password. Mr. Simone did not know whether Ms. Auckbaraullee’s SunSystems password was shared with Ms. Stepic. He testified, however, that if Ms. Stepic was using Ms. Auckbaraullee’s computer, she would not need Ms. Auckbaraullee’s password to log onto SunSystems. She could just use her own SunSystems user name and password. She would, however, require Ms. Auckbaraullee’s user name and password for Cheque Scribe in order to print cheques.

[152] Mr. Simone testified that he would not have authorized Ms. Stepic to ask IT to override Ms. Auckbaraullee’s SunSystems password. However, if a SunSystems password were to be overridden for some reason in 2010, he would probably have asked IT to do it. He noted that the timeframe that they were talking about was seven years ago.

The Cheque-runs: Process, Review, and Approval

[153] Mr. Simone testified that invoices could be inputted into SunSystems throughout the day. Each cheque could be assigned its own due date and would not be printed until that date. For example, if a number of cheques were inputted on July 2, and all were assigned July 2 as the due date except for one cheque, which was assigned a due date of July 3, the cheque-run on July 2 would print all the cheques except for the one with the later due date. In other words, it was possible to delay the printing of a cheque by assigning it a different due date.

[154] Mr. Simone believed that it was also possible to change the due date. Thus, in the above example, if a person decided that they wanted to change the due date on the one cheque from July 3 to July 4, they could make that change and then print that cheque on July 4.

[155] The time required to input a new vendor into the system, process the invoice, and print a cheque would probably take less than ten minutes.

[156] Mr. Simone understood that the Payment Listing always named Ms. Auckbaraullee as the operator who had printed the cheques, no matter who had done the cheque-run. He based this reasoning on the fact that Ms. Auckbaraullee’s Cheque Scribe user ID and password had to be used in order to log onto Cheque Scribe. The Payment Listings included in Exhibit 9 show that Mr. Simone was correct in this regard.

[157] After the batch of cheques and Payment Listing had been printed, the cheques were matched with the corresponding back-up documents, such as invoices or cheque requisitions, which were kept in a filing cabinet at Ms. Auckbaraullee’s work station. Mr. Simone could not recall if the filing cabinet was locked. He agreed that it would have been possible for someone to place or file an invoice in the cabinet without Ms. Auckbaraullee’s knowledge.

[158] The cheques, back-up documents, and Payment Listing were sent to Doug Miller for review and authorization. The Payment Listing listed all the cheques that had been printed. It was not possible to manually delete or omit a cheque from the Payment Listing produced by Cheque Scribe.

[159] Mr. Miller’s role was to ensure that the cheques matched the Payment Listing. He would also do “one-off control checks” to ensure that the cheques had addresses and matched what was on the invoices. When Mr. Miller was away on vacation, Mr. Simone reviewed the cheques.

[160] Mr. Simone testified that following Mr. Miller’s review, the cheques and other documents were returned to Ms. Auckbaraullee, who put the cheques into envelopes and took them to the mailroom. They were sealed, stamped, and put in a plastic bin. The cheques were not locked prior to the courier picking them up for delivery to Canada Post. However, the courier usually arrived within an hour, or around 4:00 p.m. The Post Office closed at 5:00 p.m.

[161] Mr. Simone agreed that it was possible that Ms. Stepic and/or Mr. Pinto assisted Ms. Auckbaraullee in matching the cheques with invoices and cheque requisitions before they were sent to Doug Miller for review. They may also have assisted her in putting the cheques into envelopes. Mr. Simone thought that they would do these tasks at or near her work station, although it was possible they performed them at their own desks. There were about 100 cheques printed each week.

[162] Mr. Simone testified that a filing cabinet in the hallway outside Ms. Auckbaraullee’s cubicle was used to file the invoices and cheque stubs. It was kept locked during the day. Ms. Auckbaraullee kept the key at her work station. Mr. Simone was not sure whether the key itself was locked away. He, Ms. Auckbaraullee, Ms. Stepic, Mr. Miller and Ms. Cho were the only people who would have access to this filing cabinet. It was kept locked to ensure that files did not go missing, which could create problems during the audit.

[163] Mr. Simone testified that cheques would be “saved up” and then run on Wednesdays at around 1:00 or 2:00 p.m., unless there was an emergency. There could, however, be runs on other days if “a batch required running.” If somebody needed a cheque, Mr. Simone or Mr. Miller would just go ahead and approve it. Ms. Auckbaraullee could also run cheques on days other than Wednesdays without advising him or Mr. Miller. If Monday was a holiday, the cheque-run might be on a day other than Wednesday.

[164] Mr. Simone testified that cheques did not go to the mailroom if the vendor was nearby and wanted to pick up their payment, or if there was a rush on the cheque. A staff member would notify Ms. Auckbaraullee that the vendor wanted to pick up the cheque. In these instances, the cheque would be left at Reception. Mr. Simone would probably be aware of such a request. Ms. Auckbaraullee did not need authorization to leave a cheque with the receptionist.

[165] Mr. Simone testified that occasionally the staff member who approved an invoice would attach a post-it note stating “Return to sender.” This happened infrequently, and usually only occurred if the staff member was in a position to hand-deliver the cheque. There was no policy regarding this practice. Mr. Simone did not approve of the practice because post-it notes could fall off or get lost.

[166] Occasionally, a cheque would be couriered, particularly if it was for a large amount. The request was usually from the vendor, and could have been made to him, Mr. Miller or Ms. Auckbaraullee.

[167] Canada Post’s website indicated that it took three to five days for a letter from OHA to arrive at an address in Toronto.

[168] In cross-examination, Mr. Simone was questioned about a scenario in which a staff member wanted a cheque returned to them but failed to call Ms. Auckbaraullee to make that request, and also failed to note on the cheque requisition or by way of a post-it note on an invoice, that the cheque was to be returned to them and not mailed. Mr. Simone was asked whether it would be possible for that staff member to go to the mailroom and “grab the cheque themselves.” Mr. Simone testified that before that could happen, the staff member would have to have “some intimate knowledge” that the cheque had been printed, approved by Doug Miller, and been brought to the mailroom, where it would have been sealed and stamped.

New Vendor Forms: Additional Background and Approval Procedure

[169] Mr. Simone testified that the process with respect to New Vendor forms was instituted in 2007. It was not a by-product of SunSystems. It was just a form put in place to identify new vendors. However, the information from the New Vendor forms was entered into SunSystems. Once the new vendor information was in SunSystems, it could be changed or modified without a New Vendor form being completed: “You can go in and update, change the vendor, and not submit a form and we would never have known about it.”

[170] In terms of his review and approval of New Vendor forms, Mr. Simone testified that each form was accompanied by an invoice or cheque requisition. He would confirm that the address on an invoice matched what Ms. Auckbaraullee had entered into the system. The invoice had to have an address. Otherwise, the cheque issued in payment of the invoice could not have been mailed.

[171] Mr. Simone would also verify the signatures of the two staff members who had signed off on the invoice. Their signatures were placed in the appropriate boxes of a stamp, which was placed on every invoice received by OHA. Although every department had the same stamp, each department had its own unique code, which was entered in the appropriate box on the stamp.

[172] One staff member was required to sign the invoice to confirm that the goods or services being billed had been received by the department. The signature of a second staff member was required to indicate approval of the payment. When reviewing invoices attached to New Vendor forms, Mr. Simone would confirm that this individual was authorized to approve the amount being billed. The approval limit for administrators was $1,000. Consultants could approve expenses under $5,000. A Director, such as Isabella Wai, could approve up to $25,000. Over $25,000 required the approval of the Vice President and COO, Warren DiClemente.

[173] The only time that a department stamp was not used was when the request for payment was made by way of a cheque requisition, which incorporated the information required by the stamp on the form itself.

[174] Signatures could be verified by reference to a binder that listed each staff member’s signing authority, that is, the amount for which they were allowed to sign, along with their signature. Ms. Auckbaraullee kept the binder in her cabinet or overhead drawer. Mr. Simone could not recall if it was kept locked. Ms. Auckbaraullee never complained to him about issues relating to the verification of signatures. He himself never referred to the binder.

[175] Mr. Simone testified that every invoice had to have an HST number. If not, it was the role of the Accounts Payable clerk to follow up and ensure that it was available on the Ministry’s or CRA’s website. If he came across an invoice without an HST number, he would Google it. He noted that when he was doing control testing, he did not test every single invoice.

[176] Mr. Simone testified that a red flag would be raised if he came across an invoice that had an abbreviated name, no address, and no HST number, especially if there was no address to which the cheque could be mailed. Although Mr. Simone reviewed New Vendor forms, and Mr. Miller reviewed the cheques and invoices, they both counted on Ms. Auckbaraullee or whoever was covering for her to do their job properly. The gatekeeper with respect to these matters, who was to ensure that the properly authorized personnel had signed off on an invoice, was the Accounts Payable clerk. Mr. Simone placed a high level of trust in Ms. Auckbaraullee, having worked with her every day over the course of the six years that she was employed at OHA.

[177] Mr. Simone testified that if he did not sign a New Vendor form, then a cheque to that vendor should not have been processed. There were times when he did not sign a form because of a wrong address or similar deficiency. In those cases, the deficiency would have to be addressed and the form returned to him for approval before a cheque could be issued. There may have been instances when a form was not returned to him and was misfiled or filed without a signature. In these cases, he relied on Ms. Auckbaraullee “to fix it.”

[178] After Mr. Simone had approved and signed a New Vendor form, it was filed in alphabetical order in a Zebra folder on Ms. Auckbaraullee’s desk. In cross-examination, Mr. Simone agreed that the folder was “never locked or anything. It was just sitting there.” If he saw someone from Finance going through the folder, he would have questioned them. This would include Ms. Stepic, unless Ms. Auckbaraullee was away and Ms. Stepic was covering for her. Ms. Stepic also knew how to set up a new vendor on SunSystems.

[179] The main purpose of the New Vendor form was to ensure that vendors’ addresses were correct, as there had been problems in the past with incorrect addresses or addresses that contained spelling errors. It was only after the form had been approved by Mr. Simone that it was placed in the Zebra file. The need to access the file would be to double check or refer to an address. For example, if the CFO noticed an incorrect address, he could refer to the New Vendor form, which would contain the most up-to-date address. Auditors may also have accessed the Zebra folder.

[180] Mr. Simone testified that if someone created a New Vendor form, forged the signatures on it, and put it in the Zebra folder, neither he nor Mr. Miller would likely be aware of it.

[181] Mr. Simone also agreed that someone could have created a New Vendor form and put it in the Zebra file without Ms. Auckbaraullee’s knowledge; for example, on those days when she was away from her desk from noon until 2:00 p.m. as a result of covering for Mr. Pinto at Reception for one hour and taking a one-hour lunch break. Similarly, a person could, without her knowledge, put an invoice in her filing cabinet where invoices were stored.

Access to Ms. Auckbaraullee’s Files and Computer Programs

[182] Mr. Simone testified that Ms. Auckbaraullee was the Accounts Payable clerk for both The Change Foundation and OHA Africa, which were on the 25th floor. The cheque-runs for those two organizations, which were on Thursdays, were quite small and only involved about 15 cheques. However, Ms. Auckbaraullee would still have had to leave her work station to get the cheques signed and distributed.

[183] Mr. Simone agreed that he would not be able to see if Ms. Auckbaraullee was at her desk by just standing outside her work cubicle. He would have to “physically come around” to see if she was there. If he saw someone from IT working at her computer, he would question them as to what they were working on or fixing, although he would not continue to look over their shoulder as they worked.

[184] Mr. Simone’s understanding was that if Ms. Auckbaraullee was not at her computer, the computer would automatically lock. In those circumstances, an IT employee could access her computer by shutting it down and logging in as an administrator. He added that “any computer is accessible by anybody if you shut it down and restart it, or log off or log in as an administrator, or yourself, or something like that.” He continued: “Just like any PC here. Anybody can get in if you have the credentials to get in.” As I understand Mr. Simone’s evidence, other employees could log onto Ms. Auckbaraullee’s computer using their Windows ID and password, but their “access” to the computer would be specific to their own credentials. It would not, for example, give them access to the Cheque Scribe software installed on Ms. Auckbaraullee’s computer.

[185] It appears from Mr. Simone’s testimony that IT (i.e. Mr. Stepic) could not have obtained Ms. Auckbaraullee’s password to her computer without her knowledge, and that the only way to access her Windows account, barring Ms. Auckbaraullee disclosing her password, was to reset or override her password, which was the procedure followed in March/April 2010. He testified:

Q. So you can’t try to get [the password] from that person or contact IT?

A. Well, IT couldn’t. If you were to go to IT, they could not – they would have to reset the password and you would have to get a new password to log in, so they would reset the password. So then the person coming back would have [to use] a new password to log into. [Emphasis added.]

[186] Mr. Simone testified that if the IT person was accessing Ms. Auckbaraullee’s computer remotely, there would have to be someone logged in at her computer in order to accept the IT employee’s request for remote access. Mr. Simone understood that a log was kept of troubleshooting sessions where remote access was used.

Discovery of the Fraud

[187] Mr. Simone testified that on October 28, 2010, he received a call from RBC regarding a cheque issued to M.W. Management for $9,755. The fact that the cheque was for a large amount of money, and the person attempting to cash it, Merv Williams, had just opened the account on October 25, 2010, prompted the bank’s call. Mr. Simone put a hold on the cheque so that he could further investigate the matter.

[188] In examining the back-up documents for this cheque, Mr. Simone noted that each of the two cheque requisitions were for two separate amounts, which was unusual. They also appeared to be photocopies, as opposed to original documents. The codes were written in the wrong boxes. He did not recognize the authorizing signatures.

[189] Mr. Simone immediately took the documents to Isabella Wai, asking her to identify the signatures and to find out what services had been provided by M.W. Management. As Ms. Wai needed some time to look into the matter, Mr. Simone called the bank back and asked them to continue holding the cheque. He also authorized the bank to give Merv Williams his office and cell phone numbers so that Mr. Williams could call him.

[190] Mr. Williams called Mr. Simone on his cell phone on the weekend. The call display showed the name “Raj.” Mr. Simone could not recall the last name that was displayed.

[191] Mr. Williams told Mr. Simone that M.W. Management had printed materials for OHA. This raised some questions in Mr. Simone’s mind, as the bank had indicated that M.W. Management was in the janitorial business. He asked Mr. Williams to provide him with the materials that he had printed. Mr. Williams stated that he would, but never got back to him.

[192] When Ms. Wai advised Mr. Simone that no one in Education recognized the signatures on the cheque requisitions, and no one recalled having had any dealings with M.W. Management, Mr. Simone called RBC and asked that the cheque be voided.

[193] After consulting with Mr. Miller and senior management, Mr. Simone notified the police about the fraud. The police recommended that OHA hire a private investigation firm. Julie Giraldi, the senior manager in Human Resources, contacted ISN.

Discovery of Other Fraudulent Cheques

[194] After discovering the fraudulent cheque issued to M.W. Management, Mr. Simone decided to review OHA’s records going back at least ten months. As a result of that review, he discovered seven more fraudulent cheques, the first of which was issued on June 17, 2010.

[195] In conducting his search, Mr. Simone focused on cheques listed in the Payment Listings that were made out to names that appeared obscure to him. As it turned out, all the fraudulent cheques, with the exception of the cheque to Elite Distributors, were made out to businesses that had one or more initials in their name. Two of the three cheques issued to H.G. Distributors did not contain an address, even though the invoice relating to the second cheque had a Calgary address. A Google search of the addresses on the cheques or invoices indicated that they were residences, as opposed to industrial or commercial buildings. In a number of instances, no invoice or back-up document for the cheque could be located.

[196] Mr. Simone asked for Ms. Auckbaraullee’s assistance in finding the back-up documents. In most cases, she indicated that she could not find them, and blamed summer students or temporary workers for misfiling them. Mr. Simone noted that five of the fraudulent cheques were printed in September or October, when summer students would not have been working. Temporary workers were hired on an “on and off” basis to assist with filing. Mr. Simone could not recall if a temporary worker had been hired during the summer of 2010.

[197] Mr. Simone conducted a thorough search for the back-up documents himself before asking for Ms. Auckbaraullee’s assistance. His search was such that he came to believe that the documents did not exist or had been destroyed. He kept Mr. Miller up to date with respect to his searches, and advised him whenever he could not find any back-up for a particular cheque.

[198] Mr. Simone noted that some of the signatures on the fraudulent documents looked “spot on”; for example, those of Ms. Wai and Carissa Martin. There were other signatures, however, that he did not recognize. As a result, he “reclaimed” the signature binder from Ms. Auckbaraullee’s work station, and tried to match the unidentified signatures with those in the binder. In some cases, there were no matches.

[199] The office building that OHA occupied was shut down from June 21 to 28, 2010, as a result of the G20 summit. During that period, some staff, including Finance, were given remote access to their computers and to SunSystems so that they could perform some tasks while off site. One of Ms. Auckbaraullee’s tasks during this period was to process invoices, that is, to prepare or update invoices within SunSystems. No cheques, however, could be printed, as that required Cheque Scribe, which could not be accessed remotely.

[200] During the G20, Ms. Auckbaraullee was permitted to take home the signature binder for the purpose of updating it. However, when she returned to work, the binder had not been updated.

[201] Mr. Simone contacted all the banks where the fraudulent cheques had been deposited, and asked them to send him copies of the front and back of those cheques. He provided these copies and any related back-up documents that could be found to ISN. The mandate of the ISN investigators was to review all of the cheques and related material, and to interview all personnel connected with them. This included Mr. Simone himself.

The Missing Cheque Summaries

[202] As stated earlier, a cheque summary was a hand-written log prepared by Ms. Auckbaraullee that contained columns for the date of a cheque-run, the numbers of the first and last cheques in the run, and the initials of the person who had printed the cheques. As the Accounts Payable clerk, it was Ms. Auckbaraullee’s responsibility to bring the cheque summary, along with the cheques, the Payment Listing, and back-up documents, to Mr. Miller following a cheque-run. Mr. Miller would then review the documents, and initial the cheque summary and Payment Listing, thereby indicating that he had reviewed all the cheques and that they could be mailed out. All these materials were then returned to Ms. Auckbaraullee, who kept the cheque summaries in a separate binder at her work station.

[203] The cheque summaries that encompassed the eight fraudulent cheques were not provided to the Crown or disclosed to Ms. Auckbaraullee until mid-trial and after Mr. Simone had testified. When questioned about the summaries in cross-examination, Mr. Simone indicated that he did not know why they would not have been included in the materials provided to ISN. He recalled reviewing them during his investigation, and was “pretty sure” that there were instances where Mr. Miller’s initials were missing on both the cheque summaries and the Payment Listings. He thought that one of the dates in question was the cheque-run on June 29, 2010. The absence of Mr. Miller’s initials indicated to Mr. Simone that Mr. Miller had not reviewed those particular batches of cheques. Mr. Simone raised this matter with Mr. Miller, but could not recall the details of their conversation.

Testimony of Doug Miller

OHA History

[204] Doug Miller joined OHA in 2001 as Financial Controller, and was promoted to Chief Financial Officer in 2004, which was the position he held in 2010. Mr. Simone, Agnes Cho, Eric Pinto, Michael White, and Jean Roth, the administrative assistant for the Ontario Hospital Auxiliary Association, reported directly to him. Mr. Miller estimated that OHA had about 100 employees in 2010. He retired in 2015.

[205] Ms. Auckbaraullee, whom Mr. Miller regarded as a trustworthy employee, prepared cheques on a weekly basis for his review. He relied on her to review each invoice and cheque requisition to ensure that it was properly authorized. She was entrusted with generating cheques for up to $25,000 that bore an electronic signature. He placed a high level of trust in her.

[206] Mr. Miller testified that Ms. Auckbaraullee had disclosed to him some aspects of her personal life. He knew that she was providing financial support to her parents in Mauritius, and sometimes received payroll advances. There were problems in her marriage. One day she arrived at work with her hand bandaged. She told Mr. Miller that she had accidentally injured it in a blender.

[207] Mr. Miller was aware that Ms. Stepic’s husband did not treat her well, but did not get into too much detail with her in terms of her personal life. He was not aware of Ms. Stepic’s financial situation. He could not recall when Ms. Stepic disclosed that she and Peter Stepic were in a relationship.

The Filing Cabinet in the Hall

[208] Mr. Miller testified that back-up documents and cheque stubs were filed in alphabetical order in a filing cabinet near the Accounts Payable area. The cabinet was just around the corner from Ms. Auckbaraullee’s work station, or about 15 feet away. She would not have had a view of it while seated at her desk. If she stood up, she would be able to see the corner of the cabinet, but not the front of it, and would probably not be able to see if a person was retrieving a file. It was possible that a staff member from Education could come down to the 23rd floor and access the cabinet without Ms. Auckbaraullee being aware of it. If Ms. Auckbaraullee was at lunch or covering for Mr. Pinto at Reception, that person would not necessarily wait for her return before accessing the cabinet, although such behaviour was generally discouraged.

[209] According to Mr. Miller, the cabinet was unlocked during business hours, but locked at the end of the day by Ms. Auckbaraullee. She kept the key at her desk, either locked in a drawer or just under a box or coffee cup. Mr. Miller had accessed the cabinet on a couple of occasions. Mr. Simone would have had a key to unlock the drawer if Ms. Auckbaraullee was away.

Discovery of the Fraud

[210] Mr. Miller recalled that in late October or early November 2010, Mr. Simone spoke to him about a call that he had received from RBC regarding a cheque payable to M.W. Management for $8,755.00. A person by the name of Merv Williams was in the bank and attempting to deposit the cheque into an account that he had just recently opened. Mr. Miller and Mr. Simone asked Ms. Auckbaraullee to pull the back-up documents for the cheque. Two hours later, she finally produced them.

[211] In his examination-in-chief, Mr. Miller identified a cheque requisition for $8,755.00 (Exhibit 4(8)(b)) as the document located by Ms. Auckbaraullee. In cross-examination, he identified Exhibits 4(8)(d) and (e) as the documents she produced. These exhibits each consisted of a cheque stub and half of a cheque requisition, which have been photocopied together on the same page. One cheque stub was for $8,755.00; the other was for $8,489.00. No matter which document or documents that Ms. Auckbaraullee produced, the two-hour delay was unusual. Ms. Auckbaraullee normally took less than ten minutes to locate back-up documentation. She told Mr. Miller that the documents must have been misfiled by a temporary worker.

[212] Mr. Miller testified that at some point, the New Vendor form for M.W. Management was also located. He identified Ms. Auckbaraullee’s signature on the form, but testified that the second signature was definitely not his nor that of Mr. Simone. Mr. Miller recalled Mr. Simone discussing this form with him after it surfaced.

[213] Mr. Miller testified that it would be possible to “make up” a cheque requisition and New Vendor form in two hours. They were both handwritten documents.

[214] Given the irregularities in the back-up documents, and upon learning that M.W. Management had never provided any goods or services to OHA, Mr. Miller and Mr. Simone suspected that other fraudulent cheques may also have been issued. They decided to go through all the Accounts Payable files “from A to Z,” covering the period from January to October 2010. They printed all the Payment Listings for that period, and looked at all the files and back-up documents, ticking off each cheque on the Payment Listings after locating the cheque stub and invoice or cheque requisition. They conducted this search after regular business hours and about one or two days after Ms. Auckbaraullee had produced the M.W. Management documents. They did not disclose to her at that time that the M.W. Management cheques were fraudulent. The search took about two hours.

[215] Mr. Miller could not recall if, during their search, he or Mr. Simone found any documents that had been misfiled. He thought that there were probably some instances of misfiling, in which case he would have correctly re-filed the documents. However, he made no mention of finding any misfiled documents with respect to the eight fraudulent cheques.

[216] All eight fraudulent cheques related to HealthAchieve. Despite the thoroughness of their search, they found no back-up documents with respect to three of the cheques. Invoices and cheque requisitions contained forged signatures. The OHA did not receive any goods or services from any of the six businesses that had been issued the cheques.

[217] Mr. Miller reported his findings to the President, Tom Classen. The police were contacted and ISN was eventually retained.

[218] Mr. Miller testified that he turned over to ISN all the documents that he had gathered as a result of his search and internal investigation. He had no input into the decision as to which employees were to be interviewed.

The Hiring of Students and Temporary Workers

[219] Mr. Miller testified that some staff members’ children who were attending university would work at OHA during the summer. They did filing as well as other jobs. The OHA also hired temporary workers when Ms. Auckbaraullee fell behind in her filing.

New Vendor Forms

[220] As the Accounts Payable clerk, it was Ms. Auckbaraullee’s responsibility to set up new vendors in the system. She filled out the New Vendor forms by hand. Mr. Miller did not know where she kept the forms. The forms were not provided to him when he was reviewing the cheques.

[221] Accounts Receivable had a similar system for entering new customers or members, but Mr. Miller could not recall if the same form was used.

The Cheque-runs: Process, Review, and Approval

[222] Mr. Miller testified that cheque-runs, which were usually on Wednesdays, involved printing anywhere from 25 to 100 cheques. He normally reviewed the cheques on the same day that they were printed. Ms. Auckbaraullee would bring him the Payment Listing, the cheque summary, and a folder of the cheques, with the stubs still attached. The cheques were in alphabetical order. An invoice, cheque requisition, or expense claim was attached to each cheque. Cheque requisition forms were available to staff via the G-drive, so that they could be filled out electronically. Directors, managers, and administrative assistants used the same form.

[223] Mr. Miller testified that Ms. Auckbaraullee sometimes failed to give him the Payment Listing with a batch of cheques, telling him that she had problems with her printer, and undertaking to provide him with the Listing the following day. There was no record kept of those times when Ms. Auckbaraullee provided him with a Payment Listing after he had already reviewed of a batch of cheques.

[224] Mr. Miller testified that when he was not provided with the Payment Listing, a cheque could be omitted from the folder of cheques without his realizing it. Normally, as he reviewed each cheque, he would cross-reference it with the cheque listed on the Payment Listing. He was unable to do that with the cheque summaries, as they only indicated the numbers of the first and last cheques in the run. The cheque summary was essentially a one-line summary of the Payment Listing.

[225] After reviewing and approving the cheques and accompanying documents, Mr. Miller would place his initials on the cheque summary at the end of the line and beside Ms. Auckbaraullee’s initials, which were under the “Run By” column.

[226] The cheque summaries, together with the Payment Listings, provided Mr. Miller with a level of confidence that no cheques were missing. If he was away on vacation, Mr. Simone would review the cheques, but would not initial the cheque summary. Rather, Mr. Miller would initial it upon his return. Mr. Miller acknowledged in cross-examination that this was not always the case. The cheque summaries in Exhibit 7 indicate that Mr. Simone provided his initials on four different dates: November 3 and 5, and December 6 and 7, 2010.

[227] On those occasions when Ms. Auckbaraullee was away, Ms. Stepic did the cheque-run and filled out the cheque summary, which was to be approved by Mr. Miller. Mr. Simone also completed the cheque summary on the rare occasions when he printed a cheque or cheques.

[228] Ms. Auckbaraullee kept the cheque summaries in a binder on or in her desk.

[229] By the time that Mr. Miller testified, the page containing 46 cheque summaries, dated from September 1, 2010 to December 23, 2010, had been located and produced. Initially, only a photocopy was produced (Exhibit 6). Later on, during Mr. Miller’s testimony, the Crown filed the original document (Exhibit 7). The cheque summaries that covered the month of June 2010, during which three fraudulent cheques were issued, was never found. Mr. Miller was unable to say how long OHA kept these records.

[230] When shown Exhibit 6, Mr. Miller identified Ms. Auckbaraullee’s initials, “AA,” beside the handwritten entries for the cheque-run on September 1, 2010, when 54 cheques were printed. There is another entry for September 1, 2010, directly below that entry, and which indicates that one cheque – # 171606 – was printed by itself. Mr. Miller did not recognize the initials beside that entry. Ms. Auckbaraullee was working on September 1, 2010, but Mr. Miller testified that those are definitely not her initials. Nor are they the initials of Ms. Stepic or Mr. Simone. Mr. Miller’s initials appear at the end of the line, indicating that he reviewed and approved this cheque.

[231] The same unidentified initials, or what appear to be the same initials, are also under the “Run By” column for the cheque-runs dated September 8, 15, 17, 21, and 22, for a total of 140 cheques. None of those cheque-runs included any of the fraudulent cheques in issue at this trial. Ms. Auckbaraullee was working on all of these dates. Mr. Miller’s initials appear beside each of the six unidentified initials, indicating that he reviewed and approved the 140 cheques.

[232] Mr. Miller was questioned as to why, if Ms. Auckbaraullee was at work on all of these dates, her initials do not appear under the “Run By” column. He explained that if a temporary worker or student was assisting her with filing, it was not unusual for Ms. Auckbaraullee to ask that worker to complete the cheque summary. There were a number of occasions when Ms. Auckbaraullee was behind in her work, and a temporary worker was brought in to assist her. That was not an unusual situation. Given the passage of time, he could not recall who that individual was on those dates. The student or temporary worker, however, would not have done the actual cheque-run.

[233] Mr. Miller disagreed with the suggestion that the purpose of the cheque summary was to identify the person who actually did the cheque-run. The main purpose, in his view, was to ensure continuity of the cheques – that all of the cheques were accounted for in sequential order and that no cheques were missing.

[234] When shown Exhibit 7, which is the original cheque summary document, Mr. Miller was of the view that the same individual who placed their initials beside the cheque-runs on September 1, 8, 15, 17, 21, and 22, also initialed the cheque summaries for October 5, 20, 21 and 22, 2010.

[235] Two of the cheque summaries that correspond to fraudulent cheques do not appear to bear Ms. Auckbaraullee’s initials in the “Run By” column. Both of these cheque-summaries are considered below.

The September 29, 2010 Cheque-run

[236] Mr. Miller did not recognize the initials beside the cheque summary dated September 29, 2010. He testified that the initials are not those of Ms. Auckbaraullee, Ms. Stepic, or Mr. Simone, and that they do not bear any similarity to the unidentified initials on the cheque summaries dated September 1, 8, 15, 17, 21, 22, October 5, 20, 21 and 22.

[237] The September 29 cheque-run included three fraudulent cheques: one to each of H.G. Distributors, H.U.S. Services, and J.N. Distributors. Mr. Miller’s initials are missing on this date, from which he concluded that he never reviewed this particular batch of cheques. Normally, had he been away, he would have initialed the cheque summary upon his return, knowing that Mr. Simone would have reviewed the cheques in his absence. Mr. Miller could not say how his initials came to be missing with respect to this batch of cheques. He also did not initial or sign the Payment Listing for September 29. He did not recall if he was at work that day.

[238] Mr. Miller recognized Ms. Stepic’s initials, “KL,” on the cheque summaries for three entries on October 7, 2010, two of which refer to voided cheques, and a fourth entry with respect to 57 cheques printed on Friday, October 15, 2010. The Payment Listing for October 15, which Mr. Miller signed, names Ms. Auckbaraullee as the “Operator” or person who printed the cheques that day. Relying on the Payment Listing, Mr. Miller testified that Ms. Auckbaraullee would have printed the cheques, but probably asked Ms. Stepic to complete the cheque summary, which Ms. Stepic then initialled. However, Mr. Miller’s conclusion that Ms. Auckbaraullee did the cheque-run on October 15 was based on his assumption that the Payment Listing distinguished between operators based on different user ID’s and passwords for Cheque Scribe. As stated earlier, that was not the case.

[239] Mr. Miller testified that the fact that he signed the Payment Listing for October 15 indicates that he would have matched each cheque to the cheques listed in the Payment Listing, and looked at the back-up documents.

The October 20, 2010 Cheque-run

[240] Mr. Miller did not recognize the initials in the “Run By” column for the cheque-run on October 20, 2010. He testified that they do not look like Ms. Stepic’s initials.

[241] Later on in his testimony, after being shown the original cheque summary document, Exhibit 7, Mr. Miller testified that the initials beside the cheque summary for October 20 appeared to him to resemble the other unidentified initials for the cheque-runs dated September 1, 8, 15, 17, 21, 22, October 5, 21, and 22. Mr. Miller’s initials are beside the unidentified initials, indicating that he reviewed the October 20th batch of cheques, which included the fraudulent cheque to M.W. Management for $9,755.00. The Payment Listing indicates that this was the last cheque printed that day. It was the only cheque printed at 3:47 p.m. All the other cheques were printed at 2:27 p.m.

[242] I note that Ms. Auckbaraullee, in her submissions to the court, asserted several times that the initials beside the cheque summary for October 20, 2010, are those of Ms. Stepic. However, Mr. Miller was clearly of the view that they were not Ms. Stepic’s initials.

[243] Mr. Miller testified that he did not recall seeing the M.W. Management cheque and that he did not verify it. In cross-examination, however, it was brought to his attention that he signed the Payment Listing for October 20 to October 21, 2010. He stated, “I missed it, I guess.” He reiterated that he did not recall seeing the cheque. He speculated that he may have looked at the cheque stub and part of the cheque requisition that had been photocopied onto one page, and thought that it looked “okay.”

[244] I note that the Payment Listing in question is titled, “Payment Listing from 20/10/2010 to 21/10/2010. It lists 108 cheques, seven of which were printed on October 21, 2010. Mr. Miller’s initials are on the last page of the Payment Listing, indicating that he could not have seen or initialled this Payment Listing before October 21, 2010.

[245] It appears from the cheque summary that the cheques printed on October 20 were brought to him for review on that day, and not on October 21. If that were the case, Mr. Miller would not have had the benefit of cross-referencing each cheque to the cheques listed on the Payment Listing, and may well have missed the fact that a cheque – that is, the cheque for M.W. Management – was missing.

[246] The cheque summary records the 101 cheques printed on October 20, 2010 as running from #171958 to #172058. The line is initialled in blue ink by someone whose initials Mr. Miller did not recognize, but whom he believed would have prepared the summary for Ms. Auckbaraullee after she printed the cheques. Mr. Miller also initialled that line.

[247] The next line on the cheque summary is dated October 21, and records the seven cheques printed that day as running from cheque #3172059 to #172065. Again, Mr. Miller did not recall whose initials are on this line. I note, however, that these initials were written in red as opposed to blue ink, which suggests that they were not written at the same time as the initials on the line above, which references the cheque-run for October 20. The logical inference is that the cheques printed on October 20 and 21 were brought to Mr. Miller for review in two separate batches and on two different days – that is, the cheques printed on October 20 were brought to him on October 20, and the cheques printed on October 21 were brought to him on October 21. This accords with Mr. Miller’s evidence that he always reviewed the cheques on the same day that they were printed.

[248] As stated above, Mr. Miller signed the Payment Listing for both the October 20 and October 21 cheque-runs on October 21. If Mr. Miller reviewed the 101 cheques printed on October 20 without being able to cross-reference them with the Payment Listing, which was apparently not produced and signed by him until October 21, he may well not have noticed if a cheque was missing. In terms of whether the number of cheques in the cheque-run was accurately recorded on the cheque summary when Mr. Miller saw and initialled the document, I note that the original entries have been amended with white-out, and the observable numbers written over them. White-out was also used to change the cheque numbers of the cheques printed on September 29, 2010. That particular cheque-run contained three fraudulent cheques.

[249] Mr. Miller testified that a change to the cheque numbers would not be unusual if a cheque was printed later in the day and then added to the Payment Listing. The change could also be made if the person filling out the cheque summary made a mistake in entering the cheque numbers. It was possible that such a change could be made without his knowledge. Ms. Auckbaraullee was the person who controlled the cheque summaries, which she kept in a binder at her desk.

[250] Mr. Miller testified that prior to this investigation, he did not recall ever having reviewed a cheque that had irregular or insufficient back-up documents or that had no back-up documents at all. Ms. Auckbaraullee would have known better than to give him such cheques for review, and presumably would have properly screened them for deficiencies. He reiterated that it was possible that a cheque for less than $25,000 could have been issued without his having reviewed it if it was omitted from a batch of cheques given to him for review and he was not provided with the Payment Listing at the time.

[251] Mr. Miller’s testimony as to the process that was followed after he reviewed the cheques and initialed the cheque summary was similar to that of John Simone. The cheques were returned to Ms. Auckbaraullee, who removed the stubs. The cheques were put into envelopes and taken to the mailroom to be stamped and sealed by Michael White, and were then picked up by a courier for delivery to Canada Post. The stub stayed with the invoice or cheque requisition. These supporting documents were then filed in the filing cabinet outside Ms. Auckbaraullee’s work cubicle.

Policy Against Sharing Passwords

[252] There was a written policy at OHA that user names and passwords were not to be shared: Exhibit 8. This policy applied to all employees and all the software systems installed on OHA’s computers, including Windows, SunSystems, and Cheque Scribe. Everyone had their own user name and password for Word and the G-drive.

[253] Mr. Miller testified that he did not have access to Cheque Scribe. Only Ms. Auckbaraullee, Ms. Stepic and Mr. Simone could access that software. Mr. Miller was uncertain as to whether each of them had their own Cheque Scribe user name and password. When advised that there was only one user name and password that was shared by them, Mr. Miller stated this would constitute a breach of the “non-sharing” policy. When asked if Accounts Payable would be responsible for such a breach, he stated that it was a breach of IT policy and would be monitored by IT.

Using SunSystems

[254] Mr. Miller understood that all staff in the Finance Department, with the exception of Michael White, had SunSystems installed on their computers. This would include himself, Ms. Auckbaraullee, Ms. Stepic, Mr. Simone, Mr. Pinto and Ms. Cho.

[255] Mr. Miller testified that although every user had their own SunSystems user name and password, that user name did not show up when entries were made on the Account Listings. For example, in the Account Listing with respect to Sarnia H. Improvement (Exhibit 4(1)(c)), the invoice for $12,000 and the cheque for that amount are listed, but there is no indication as to which SunSystems user entered those invoices.

[256] A SunSystems user could enter an invoice while sitting at their own desk. They would not have to sit at Ms. Auckbaraullee’s, Ms. Stepic’s or Mr. Simone’s desk, because they could log into SunSystems with their own user name and password.

[257] Mr. Miller noted that when a payment was made, the number of the cheque was recorded in the Account Listing, which could then be cross-referenced with the Payment Listing and cheque summaries in order to determine which cheque-run produced the cheque.

[258] If staff in other departments needed SunSystems on their computer, the request would be made to John Simone for his approval. Someone from IT would then be authorized to install it. Mr. Miller could not say why Ms. Wai’s assistant, Sushma Mahoobani, would need the SunSystems software. He noted, however, that there were different levels of access to SunSystems. He and Mr. Simone had the highest level of access amongst the employees.

Testimony of Warren DiClemente

[259] Warren DiClemente was OHA’s Vice President of Educational Services and Chief Operating Officer in 2010. He retired in 2014, but continued to work for the association on contract until 2016.

[260] The Education Department consisted of five separate sections: HealthAchieve; Distance Learning; Conferences; Marketing; and Certificate and Diploma Courses. About 30 people reported to Mr. DiClemente.

[261] The OHA hired between six to twelve service providers or vendors to assist in the set up and management of the HealthAchieve conference. The vendors would normally bid for the work and, if successful, often entered into a three-year contract, during which the cost of the work would remain the same.

[262] Isabella Wai had the bulk of responsibility in terms of handling invoices from these vendors. All invoices relating to HealthAchieve crossed her desk.

[263] Two signatures were required before an invoice could be paid: the “requesting” signature and the “approval” signature. As a Director, Ms. Wai had authority to approve invoices that were under $25,000. Invoices for amounts over $25,000 had to be approved by Mr. DiClemente.

[264] Mr. Simone brought the fraudulent scheme to Mr. DiClemente’s attention in 2010, and asked him if he recognized any of the six vendors as entities that had provided services to OHA relating to HealthAchieve. Mr. DiClemente did not recognize any of the names.

[265] Mr. DiClemente confirmed that none of the signatures on the back-up documents relating to the eight cheques was his signature, and that he had nothing to do with the creation of those cheques.

[266] In cross-examination, Mr. DiClemente was questioned about the hiring of temporary workers in the Education Department. He testified that temporary workers from an agency were hired from time to time, mainly in connection with telemarketing. Temporary workers had nothing to do with the handling of invoices. He could not recall if they had access to the Finance department for the purpose of dropping off or picking up documents.

[267] Mr. DiClemente testified that invoices that were mailed to OHA would be delivered to the mailroom, where Michael White would open them and put them in the appropriate slot for pickup by the department that had received the goods or services. No particular individual was designated to pick up the mail. Anyone who worked at OHA could go into the mailroom.

[268] A number of people could have stamped an invoice with the large stamp used in the processing of invoices. Ms. Wai or her assistant would have filled out the appropriate codes. Mr. DiClemente did not know whether temporary worker had access to the codes. Again, most “temps” were doing telemarketing, and had nothing to do with invoices.

Testimony of Isabella Wai

[269] Ms. Wai began working for OHA in 1988, and continues to be employed there. In 2010, she was a Director in the Education Department, and responsible for conferences, seminars, and the annual HealthAchieve event in November. In 2010, HealthAchieve was held from November 5 to 10.

[270] Ms. Wai was responsible for approving and arranging for the payment of all vendors for HealthAchieve. There were four major vendors, and perhaps a few “one off” vendors, all of whose names she would recognize. Ms. Wai did not recognize any of the vendors relating to the eight fraudulent cheques.

[271] Ms. Wai did not arrange for or oversee speakers for HealthAchieve. That was the role of her colleague, Lina Pallatto, who reported to Bob Holden. After Mr. Holden’s retirement, Ms. Pallotta became a Director.

[272] Ms. Wai identified many deficiencies in the back-up documents relating to the fraudulent cheques, including the following:

• No GST/HST was set out

• Contracts were not attached to invoices as they should have been when referenced in the invoice

• Descriptions of services did not provide sufficient detail

• Addresses were missing

• Codes were in the wrong places within the stamp used on invoices

[273] Ms. Wai testified that vendors were not normally paid prior to the event, except perhaps in the case of an entertainment company, which might require a deposit. It was therefore strange that all of these invoices had been paid in full. Invoices relating to HealthAchieve usually came in by mail after the conference was over.

[274] Ms. Wai confirmed to Mr. Simone that none of the signatures on the invoices or back-up documents was her signature. Nor were the signatures of Warren DiClemente, Lina Pallotta, or Bob Holden on any of these documents. They were all forgeries.

[275] Ms. Wai prepared all the invoices relating to HealthAchieve. When she was away on vacation, no one else undertook this role. She would prepare the invoices upon her return.

[276] Ms. Wai described the steps that she took before submitting an invoice to Accounts Payable. First, she would verify all the information on the invoice, including the name and address of the vendor, the goods or services provided, the amount being charged, and the tax payable. If any of this information was missing, she would ask the vendor to resubmit the invoice. She had never seen an invoice that did not contain an address.

[277] Next, Ms. Wai would stamp the invoice, using the stamp that she assumed was standard or used by all OHA departments. She then filled out the requisite information, including the codes. Ms. Cho provided a coding list to each department, which was updated annually. Ms. Wai always ensured that the amount of tax was set out because otherwise the Accounts Payable clerk would call or return the invoice to her. Ms. Wai did not specifically recall receiving such a call from Ms. Auckbaraullee.

[278] Ms. Wai would place her signature on the first line in the box for signatures, indicating her approval, and then deliver the invoice to Mr. DiClemente’s assistant, Connie, who would forward it to Mr. DiClemente for his authorization. Mr. DiClemente signed on the second line.

[279] After Mr. DiClemente had signed and returned the invoice to her, Ms. Wai photocopied it and filed the copy in a cabinet in her office. She then delivered the original to Accounts Payable. She would walk from the 28th to the 23rd floor and either hand the invoice directly to Ms. Auckbaraullee, or leave it in her inbox outside her work station. The inbox was open, like a mail box.

[280] Occasionally, if Ms. Wai were busy or could not deliver the invoice personally, she would ask Ms. Mahoobani to take it to Ms. Auckbaraullee. Ms. Wai never left the invoices in a slot in the mailroom for delivery to Accounts Payable.

[281] Ms. Wai did not have her own mail slot in the mailroom. The slot was simply labelled “Educational Services.” The administrative assistants shared the responsibility of picking up and distributing the mail to the appropriate person on a monthly basis.

[282] Ms. Wai testified that the door to her office did not lock. She did not believe that other managers or administrative assistants would enter her office in her absence and look for paperwork. She did not know if anyone was aware of the fact that she kept photocopies of all the invoices approved by her and Mr. DiClemente. She sometimes referred to these copies for various reasons; for example, to find out how much OHA had paid for a service in the previous year when preparing a budget for that same service in the upcoming year.

[283] Ms. Wai testified that there were no copies of any of the invoices relating to the eight fraudulent cheques in the cabinet in her office.

[284] Ms. Wai had no recollection of any vendors picking up cheques or having asked to pick up cheques. Cheques were normally delivered by mail. There was only one time that she could recall that a cheque was couriered to a vendor. On that occasion, she called Ms. Auckbaraullee and asked her to arrange for the courier. She believed that she would have called her directly as opposed to leaving instructions on a sticky note attached to the invoice.

[285] Ms. Wai had no knowledge of the accounting system, and did not have access to SunSystems. She had no knowledge of the steps required to process a payment. Prior to the ISN investigation, she had never seen a New Vendor form. She did not know what Cheque Scribe or a Payment Listing was. She had no access to Cheque Scribe.

[286] Ms. Wai asked Ms. Mahoobani to produce something called a “Vision Report” every month. This report showed the exhibitors who had paid and those who had not paid. Ms. Wai did not know if this report was part of SunSystems. She did not know if Ms. Mahoobani had SunSystems on her computer, and Ms. Wai never spoke to her about SunSystems.

[287] Ms. Wai testified that invoices were to be submitted by 4:00 p.m. on Tuesdays so that they could be printed on Wednesday. She never saw the printed cheques.

[288] In cross-examination, Ms. Wai testified that prior to Ms. Mahoobani becoming her assistant, she had a part time assistant, Kumari, who helped out with the exhibition portion of HealthAchieve. Kumari remained in Education, but worked in the Marketing division.

[289] Ms. Wai arrived for work at 8:00 a.m. and left at 4:45 p.m. in order to catch the Go Train at 5:10 p.m. Ms. Mahoobani arrived at 8:30 a.m. and left before her, at 4:30 p.m.

[290] The OHA had flexible hours. Some employees arrived at 9:00 a.m. and left at 5:00 p.m. An employee who stayed late and wanted to be paid overtime would have to inform their superior.

[291] The only invoices that Ms. Mahoobani prepared were for small amounts, most likely under $100, to cover the cost of such things as catering for a meeting. Ms. Mahoobani would stamp the invoice and fill it out. If she had a question, she would ask Ms. Wai for advice. Ms. Wai, after checking the invoice for accuracy, would sign it.

[292] Ms. Wai never used the “Received” stamp, and was unaware as to whether the Education Department even had such a stamp. She only used the larger stamp that required the codes, the tax, and other information to be filled in. It was kept on top of a cabinet close to Connie’s work station. Anyone within the department could stamp an invoice.

[293] Ms. Wai had no temporary workers to assist her in the summer of 2010. However, temporary workers were hired in September and October to assist with HealthAchieve. Temporary workers had no dealings whatsoever with invoices. Their roles were limited to making phone calls, and filing the contracts and insurance certificates in a binder. Either Ms. Mahoobani or a temporary worker would keep the binder until the start of the convention, at which point Ms. Wai took possession of it.

[294] Temporary workers were provided with a computer and a user name and password. They would not have been given access to SunSystems for invoices.

[295] Ms. Wai did not see Ms. Auckbaraullee on a regular basis. The Education Department had more interaction with Accounts Receivable than with Accounts Payable, since there were approximately 300 exhibitors at HealthAchieve, all of whom were billed by OHA for space at the Metro Toronto Convention Centre. Most exhibitors paid for the space when the contract was signed. However, there were usually 30 to 40 exhibitors who had still not paid in full by September. Ms. Mahoobani, who was responsible for ensuring that all payments had been made prior to the convention, worked with Ms. Stepic in this regard. Ms. Stepic prepared the invoices and followed up with calls to the exhibitors if necessary.

Testimony of Sushma Mahoobani

[296] Ms. Mahoobani began her employment with OHA in 2009, and was the Coordinator for Exhibitors for HealthAchieve in 2010. She reported to Ms. Wai. She is still employed at OHA.

[297] Ms. Mahoobani did not have much contact with the contractors or vendors hired with respect to HealthAchieve, although she had some familiarity with four or five of them who were hired year after year. She testified that she would also likely recognize the names of “one-off” vendors, such as entertainers, who were different every year.

[298] Ms. Mahoobani did not recognize the names of any of the companies on the eight cheques in issue at this trial. She also testified that she was familiar with the signatures of both Ms. Wai and Mr. DiClemente. She confirmed that their signatures do not appear on any of the back-up documents relating to those eight cheques.

[299] Ms. Mahoobani testified that the vendors’ invoices were usually emailed directly to Ms. Wai, who would verify them, sign them, and send them to Mr. DiClemente for his authorization. After he returned them, they were forwarded to Accounts Payable. On a couple of occasions, Ms. Wai asked Ms. Mahoobani to make a copy of an invoice. Ms. Wai always photocopied the invoices after they had been authorized by Mr. DiClemente.

[300] Ms. Mahoobani was familiar with preparing invoices using the large stamp and filling in the requisite information. She was instructed by Ms. Wai to use the codes provided by the accounting department. These invoices were usually for small amounts. Ms. Wai, who was authorized to approve payments under $5,000, would sign them.

[301] The large stamp was kept on a desk outside Connie’s cubicle. Ms. Mahoobani did not know if any other divisions within Education had the same stamp.

[302] Neither Ms. Wai nor Ms. Mahoobani had a “Receiving” stamp. Ms. Mahoobani was unaware of which employees used that stamp.

[303] Ms. Mahoobani prepared cheque requisitions when there was no invoice. The cheque requisition form was accessible through the program “EPIC,” which was a website only available to OHA employees. She would use this form in order to refund a payment to an exhibitor who had overpaid, or to cover the cost of caterers. Sometimes an exhibitor would ask that a cheque be sent to the attention of a specific person within the company. On these occasions, Ms. Mahoobani included those instructions on the cheque requisition itself. She would not have used a sticky note to convey this information.

[304] Ms. Mahoobani did not see the cheques that were printed, and understood that most of them were mailed out. She was not aware of an exhibitor or vendor ever asking if they could pick up a cheque. She did not recall a courier being used to deliver a cheque. No cheque was ever returned to her.

[305] Ms. Mahoobani testified that Mr. Simone authorized her to have limited access to SunSystems on her computer. She could not recall whether she was granted this access before, during or after 2010. The purpose of her access to SunSystems, and the only time that she ever used it, was to print the monthly Vision reports for Ms. Wai. She never shared her SunSystems user name or password with anyone, and no one ever shared their password with her.

[306] Ms. Mahoobani had never heard of Cheque Scribe and had no access to that software.

[307] Ms. Mahoobani described her relationship with Ms. Auckbaraullee as friendly. They did not see each other outside of work. Although they worked on different floors, Ms. Auckbaraullee sometimes covered for Mr. Pinto at Reception, which was on the same floor as Education, that is, the 28th floor. Ms. Mahoobani did not recall ever seeing Ms. Auckbaraullee drop off a cheque to anyone on that floor.

[308] Ms. Mahoobani would either put an invoice or cheque requisition into an envelope to be delivered to Ms. Auckbaraullee via OHA’s internal mail, or put it in Ms. Auckbaraullee’s inbox. She did not recall ever handing these documents directly to Ms. Auckbaraullee, or putting them on her desk.

[309] Ms. Mahoobani testified that she worked more closely with Ms. Stepic than with Ms. Auckbaraullee. Ms. Mahoobani worked mainly with exhibitors, and Ms. Stepic was responsible for preparing the invoices sent to those exhibitors. Ms. Auckbaraullee’s involvement with HealthAchieve was limited to processing the vendors’ invoices and cheque requisitions. Ms. Auckbaraullee also worked the registration desk during the HealthAchieve conference.

Testimony of Agnes Cho

[310] Ms. Cho began working at OHA in 2001. In 2007, she became the Budget and Planning Analyst in the Finance Department, which is the position she held in 2010. Her main responsibility was to plan and organize the annual Budget and Operating Plan process. In 2010, she reported to Mr. Miller.

[311] Ms. Cho understood that only members of the Finance department had access to SunSystems. The SunSystems package contained another software system, Vision Query, which was used for financial reporting. John Simone was authorized to grant staff members access to Vision Query, which enabled the user to download information from SunSystems to Excel, and then to review transactions.

[312] The personnel who had access to Vision Query included herself, Mr. Simone, and Mr. Miller. Ms. Cho testified that the administration professionals in each department also had Vision Query installed on their computers. Although these individuals did not have access to SunSystems, the Vision Query application “pulled” information from SunSystems. When questioned as to what information that entailed, Ms. Cho stated that it included income statements and transaction reports. A transaction report displayed the name of the payee, such as the Metro Toronto Convention Centre, the date of the transaction, the amount paid, and the code of the department that had received the goods or services.

[313] Ms. Cho did not have much interaction with the Accounts Payable or Accounts Receivable clerks, although she worked on the same floor and saw Ms. Auckbaraullee every day. Her main interaction with Accounts Payable occurred when she was submitting an invoice for food that she had ordered for various meetings, or when she was seeking reimbursement for tuition fees. She might also interact with Ms. Auckbaraullee when retrieving a vendor file for review.

[314] When preparing to submit an invoice, Ms. Cho would review the invoice for accuracy in terms of the date, what had been ordered, and the price. She then stamped it with the Accounts Payable stamp, which was available in every department. She filled out the requested information, including the GST or HST. If the invoice did not itemize the tax, Ms. Cho would contact the vendor to get that information. It was important that the tax be set out because OHA, as a non-profit organization, could claim part or all of the tax as a credit.

[315] The stamp required the entry of various codes, including the code for the department that was submitting the invoice. The code for Education was EDUC; for Finance it was FINAD. The initiative code referred to a project, and was created by Finance. There was also a revenue and expense account code.

[316] Ms. Cho provided training to the personnel in different departments with respect to the use of the codes, and created a chart that Directors or their administrative assistants could refer to when preparing an invoice for submission to Accounts Payable. This chart was updated at the beginning of each fiscal year. It was on a piece of paper that she distributed to every assistant in every department, and contained the codes for each department. She could not recall whether an electronic copy of it was also available in 2010. The same information regarding revenue/expense codes was also in the annual Budget and Operating Plan.

[317] Ms. Cho testified that everyone in the Education Department would have known the Account Number for that department: “1671” was the code for deferred expenses; “7147” was the code for deferred revenue. The Activity or Initiative Code, “CE952,” was used to designate expenses relating to HealthAchieve delegates. Again, everyone in the Education Department would also be aware of that code.

[318] Ms. Cho testified that she printed the approved budget, which contained all the initiative codes for all the departments, and provided a copy to the head of each department. She could not say how that document was distributed within the department, but stated that administrative assistants would have found it useful in terms of accessing the codes required to prepare an invoice for submission to Accounts Payable.

[319] Ms. Cho testified that if a Director had a question regarding a transaction when reviewing one of her financial reports, she would ask Ms. Auckbaraullee for the vendor file in order to check the invoice. The vendor files were kept in the filing cabinet in the Accounts Payable area. Ms. Cho was uncertain as to whether the cabinet was locked during the day. She did not know where the key was kept. Ms. Cho was also uncertain as to whether she would retrieve the file herself, or if Ms. Auckbaraullee would retrieve it for her.

[320] The vendor files contained invoices, cheque requisitions, purchase orders, memos, correspondence, or any other supporting documents that related to the goods or services that had been provided. At a minimum, the vendor file should contain an invoice. The absence of any supporting documents would be a cause for concern. In that circumstance, she would contact the department that had requested the payment and ask them to return the supporting documentation.

[321] Ms. Cho testified that she never shared her SunSystems password with anyone, and no one ever shared their password with her. She did not have a password for Cheque Scribe. She knew nothing about a Zebra file containing the completed New Vendor forms that sat on Ms. Auckbaraullee’s desk.

[322] Ms. Cho knew the names of only a few of the entities that provided services or support to OHA in relation to HealthAchieve. These included the Metro Toronto Convention Centre, and the hotels that OHA booked for conferences and staff accommodation.

Testimony of Peter Stepic

[323] Peter Stepic began working at OHA in 2008 as the Website Support Network Administrator. In 2010, he became the Network Administrator and was the main IT employee. At that time, he and his now wife, Kathleen Stepic, were friends who shared a common wall between their work cubicles. Mr. Stepic was somewhat uncertain as to when he and Kathleen began dating. He initially thought it was in November 2011 or 2012 during the HealthAchieve convention, but acknowledged that it could have been in November 2010.

[324] The two software systems used by the Finance Department were SunSystems and Cheque Scribe. Mr. Stepic had no experience with these systems prior to working at OHA. Everything he knows about them he learned from John Simone.

Access to SunSystems

[325] As far as Mr. Stepic was aware, Mr. Simone, Ms. Auckbaraullee, and Ms. Stepic were the only employees who had access to SunSystems. His own access to SunSystems was limited to resetting passwords and unlocking accounts. However, he eventually became a SunSystems “Super User.” He was uncertain as to whether this occurred in 2010 or later. A SunSystems Super User could do anything inside that system, including changing passwords, inputting and changing information and unlocking accounts. An account would be locked if the wrong user name or password was inputted three times. This happened on occasion.

[326] Mr. Stepic testified that if a SunSystems password needed to be reset, he would typically ask Mr. Simone to do it. He had no recollection as to whether he made such a request of Mr. Simone in 2010.

[327] Mr. Stepic testified that there was no reason to change someone’s SunSystems user name, as user names were set and intended to remain the same. If Ms. Stepic were covering for Ms. Auckbaraullee when Ms. Auckbaraullee was away on vacation, she could sign onto Ms. Auckbaraullee’s computer with Ms. Stepic’s own Windows ID and password, and then log onto SunSystems with her own SunSystems user name and password.

[328] Mr. Stepic denied that Ms. Stepic ever asked him to override Ms. Auckbaraullee’s Windows password or told him that Mr. Simone had granted him permission to do so. He testified that it was not necessary to change Ms. Auckbaraullee’s password in order for Ms. Stepic to perform Ms. Auckbaraullee’s job. Ms. Stepic had her own access to SunSystems and, as far as he was aware, to Cheque Scribe as well. If a password was to be reset, that request would come to him by way of a ticket, and would have to be approved by Mr. Simone. He could give the user a new password at that user’s request, but would not be permitted to reset the password of one user at the request of another user. According to Mr. Stepic, such an act would cost him his job.

[329] Mr. Stepic understood that SunSystems did not create a log-in record.

Access to Cheque Scribe

[330] Cheque Scribe interacted with SunSystems to print cheques for transactions recorded in SunSystems. The Payment Listing for each cheque-run was produced by Cheque Scribe. Mr. Stepic assumed that Ms. Auckbaraullee, Ms. Stepic, and Mr. Simone all had their own user names and passwords for Cheque Scribe. He was unaware of the fact that there was only one user name and password for that software, and that all the cheques printed by that system recorded Ms. Auckbaraullee as the “Operator” of the cheque-run, whether or not that was the case.

[331] Mr. Stepic testified that the FOB used to operate Cheque Scribe functioned as a secondary security system. He had seen the key but did not know where it was kept. He assumed that Ms. Auckbaraullee kept it, as she was the one who would have used it the most.

[332] Mr. Stepic had no access to Cheque Scribe. If the software was not working, the vendor had to be contacted. Mr. Stepic only had access to the system that the software “sat on” in order to figure out what was wrong with it if it was not printing or “launching” cheques. He understood that only Mr. Simone, Ms. Auckbaraullee, Ms. Stepic, and possibly Eric Pinto had access to Cheque Scribe. A temporary worker would not have access to Cheque Scribe.

Temporary Workers

[333] Mr. Stepic testified that temporary workers were not hired to cover for either Ms. Auckbaraullee’s or Ms. Stepic’s respective positions. Summer students were given their own Windows IDs and passwords.

OHA Password Policy

[334] The policy of OHA was not to share passwords. Mr. Stepic was not aware of any instances in which employees, including himself, had shared passwords.

Access to Software for Cheque-runs

[335] Mr. Stepic worked on the same floor as Ms. Auckbaraullee, saw her on a regular basis, and helped her with computer related issues. These typically involved connectivity problems between her computer and the printer that printed the cheques. If the printer would not print the cheques, he would remove and re-install the drivers. He testified that he could not print cheques himself because he could not log onto the system. He never used Ms. Auckbaraullee’s computer to do work.

[336] Mr. Stepic and his boss, Robert Saeggriato, were the only employees who could access computers remotely. They only used remote access when asked to resolve a particular problem with a computer. A Super User could access SunSystems remotely. The printing of cheques using Cheque Scribe could not be done remotely.

[337] Mr. Stepic testified that OHA employees could log on to CITRIX from their homes, which allowed them to use the software as though they were sitting at their desk at the office. This enabled them to at least do some work when OHA’s offices were closed during the 2010 G20 Toronto summit. SunSystems has never been included in CITRIX. However, the G-drive is a common driver where all employees store their work. Mr. Stepic testified that the Finance Department stored its files in the G-drive, but those folders, with some exceptions, were only available to members of that department. One exception included members of the Education Department, who could access certain folders in Finance in order to upload their invoices. Those invoices would then be processed by Accounts Receivable. The employees in Education did not have access to any other folders in Finance.

[338] Mr. Stepic did not know whether the New Vendor forms were stored in the G-drive, or if they could have been accessed by members of the Education Department.

[339] Mr. Stepic understood that SunSystems was installed on all OHA computers, but that an employee had to have the necessary credentials in order to access it. A person with those credentials could input an invoice through SunSystems at their own computer, but would have to be at Ms. Auckbaraullee’s work cubicle in order to print a cheque through Cheque Scribe.

Testimony of Michael White

[340] Michael White began working at OHA in 2008 as the Mailroom and Facilities clerk. He was let go in 2015. He was not given a reason for the termination of his employment.

[341] Mr. White reported to Doug Miller. His duties included running the mailroom, which occupied about 20 to 25 percent of his time. His office was in the mailroom, which was on the 28th floor, but he was in and out of his office throughout the day. Other duties took him to the 23rd floor. He dealt with any renovations being carried out on the premises, set up rooms for training sessions, maintained copiers, FAX machines, and telephones, and worked closely with the IT department, assisting with technical services.

[342] Mr. White’s hours were 8:30 a.m. to 4:30 p.m. Regular hours were 9:00 a.m. to 5:00 p.m. Not everyone had the same schedule. Employees in Education tended to stay later. The building was locked after 5:00 p.m., but employees could come and go using an access card.

[343] Mr. White described the mailroom area as quite busy when classes were being held on the same floor. There could be 10 to 25 people in a room. Although there was a log kept of attendees, not everyone signed it. He would recognize the teachers, but not the students.

[344] Mr. White sorted the incoming mail and put it in the appropriate slots. There were slots for each department and for some individuals. If he required more information, he was directed to open the envelope to determine which department or person should receive it.

[345] Mail that arrived by courier required a signature. Eric Pinto, or someone who was covering for him, such as Ms. Auckbaraullee or Ms. Stepic, would sign for the item.

[346] Mr. White testified that OHA used a printing service that was in the same building. That company delivered printed material on an almost daily basis. It also hand-delivered its invoices, which, in turn, had to be delivered to the appropriate department. The invoices could be put in a mail slot, delivered to the person whose name appeared on the invoice, or taken to the department responsible for the payment. Sometimes the receptionist would call the person who was to receive the invoice, and that person would take direct delivery of it. At other times, the invoice might be put on Mr. White’s desk. There was no specific procedure that was followed.

[347] Cheques to be mailed out were brought to the mail room by Ms. Auckbaraullee, Ms. Stepic, Mr. Simone or, occasionally, Mr. Miller. If Mr. White was not in his office, the cheques were left on his desk or chair. Sometimes the envelopes containing the cheques were sealed. At other times, they were not, in which case Mr. White sealed them using the postage machine. He never looked inside an open envelope.

[348] Mr. White ran the envelopes containing the cheques through the postal machine together as a bundle, and did not look at each individual item. There could have been cheques contained in the bundle that did not have an address. He recalled a cheque without an address being returned to OHA more than once. He would put the cheque in the slot for Finance, or deliver it to Mr. Miller, Mr. Simone, or Ms. Auckbaraullee.

[349] Mr. White never actually saw any cheques being printed. It was his understanding that when Ms. Auckbaraullee was away, Ms. Stepic covered for her. He also understood that Mr. Simone and Mr. Miller had the ability to do cheque-runs.

[350] There were times when a cheque without an address was delivered to the mailroom for pick up. When the person who was to pick it up arrived, Mr. White would hand it to them. There was no system in place to track who picked it up or when it was picked up. The Finance Department was not notified as to who took delivery of the cheque.

[351] The courier who picked up the mail for delivery to Canada Post usually arrived around 4:00 p.m., but was sometimes late and did not arrive until after Mr. White had left for the day.

[352] Sometimes Eric Pinto, while at Reception, would stuff cheques into envelopes. Occasionally, Mr. Pinto would bring the cheques to the mailroom. Employees on the 23rd and 28th floor had access to the mailroom, which was never locked. Someone could take a cheque without signing for it. If Mr. White was not there, he had no way of knowing that a cheque had been taken.

[353] Mr. White had only limited knowledge of the vendors who supplied goods or services relating to HealthAchieve. He was not familiar with any of the businesses whose names appear on the fraudulent cheques.

[354] Mr. White did not use a “Received” stamp, unless instructed to do so by Doug Miller or John Simone, which was once or twice a year. He understood that all the administrative assistants had “Received” stamps.

[355] All departments had a stamp for expenses. Mr. White used that larger stamp on invoices from contractors who did renovations or internal work for OHA. The codes that had to be filled in were on a list, which all administrative assistants and managers would have for ease of reference when processing invoices.

[356] Mr. White was not familiar with the software systems used by OHA. When he logged onto his computer with his user name and password, he had access to Windows, the Internet and email. He never shared his password with anyone, as that was against OHA’s policy. He did not have a user name or password for SunSystems, and had no knowledge of Cheque Scribe or how to access the printer to print cheques.

[357] Mr. White described Ms. Auckbaraullee as a happy employee who always had a smile on her face. He knew that she was separated from her husband, but that they were still living in the same house. He was aware of the injury to her hand, which she stated was caused accidentally when she was using a blender.

[358] The configuration of Ms. Auckbaraullee’s work cubicle was such that unless someone actually entered it, it was not possible to see if she or anyone else was at her desk.

[359] Mr. White testified that he became aware of the relationship between Kathleen Stepic and Peter Stepic sometime after the 2010 HealthAchieve conference. He knew that Ms. Stepic had been involved in divorce proceedings.

Testimony of Eric Pinto

[360] Eric Pinto began working as a receptionist at OHA in 1995, and continues to occupy that position today. In 2010, he reported to Doug Miller and John Simone. His duties included manning the main switchboard, attending to visitors and members who arrived for meetings, and handling publications that were for sale to OHA members. He also acted as back-up support in the mailroom when Michael White was not around.

[361] Mr. Pinto’s mailroom duties included putting incoming mail into the appropriate department slots, operating the machine to seal and stamp outgoing mail, and putting that mail in a crate by the mailroom door for pick up by a courier. The courier normally arrived between 3:30 and 4:00 p.m., and delivered the mail to Canada Post.

[362] Mr. Pinto also arranged for same-day courier service if a staff member requested it and Michael White was not available to handle the request. A record was kept of all mail delivered by a courier, including the address and department or individual who had made the request. The courier’s bill was then forwarded to that department.

[363] Sometimes a person would arrive at Reception to pick up a cheque. If the cheque was from the Education Department, Mr. Pinto would call that department to notify them. Sometimes the Education Department notified him ahead of time that someone would be coming to pick up a cheque. There was no record made of mail or cheques that were delivered in this fashion.

[364] Mr. Pinto had a computer at his desk at Reception. He had a user name and password for SunSystems, which he used to access information with respect to publication sales, and to find the addresses of vendors. It was not clear from Mr. Pinto’s evidence as to whether his access to financial information was restricted, or whether he simply never accessed that information. He never shared his password with anyone. He had never heard of Cheque Scribe.

[365] Ms. Auckbaraullee or Ms. Stepic covered for Mr. Pinto when he was on his one-hour lunch break. A monthly timetable was prepared with respect to this coverage. He usually took his lunch break from 12:00 to 1:00 p.m., but sometimes it was from 1:00 to 2:00 p.m. He had a good relationship with both Ms. Auckbaraullee and Ms. Stepic.

[366] Mr. Pinto never covered for Accounts Payable or Accounts Receivable. He would, however, assist Ms. Auckbaraullee by stuffing cheques into envelopes. He performed this function at his desk on the 28th floor. He never saw any back-up documents for the cheques.

[367] Mr. Pinto testified that after he finished, he would call Ms. Auckbaraullee, who would come up and take the envelopes to the mailroom to be stamped and sealed. In cross-examination, he acknowledged that she may have asked him on occasion to take the cheques to the mail room himself, or have Mr. White take them to the mail room, since the mail room was on the same floor as the reception area.

Particulars of the Eight Fraudulent Cheques

1. June 17, 2010: Cheque No. 170824, payable to “Sarnia H Improvement” in the amount of $12,000.00

[368] The address on this cheque was written as follows:

867 London Unite#5 [sic]

London, ON

N7T 4H7

[369] The cheque was one of at least six cheques printed on Thursday, June 17, 2010, at 5:07 p.m. Since the courier picked up the mail between 3:30 and 4:30 p.m., the cheque would not have been mailed out until Friday afternoon at the earliest. Ms. Stepic and Mr. Miller testified that the fact that it was deposited in a Sarnia bank on Monday, June 21, 2010, indicates that it was not mailed, and would have arrived at its destination by some other means.

[370] Ms. Auckbaraullee’s Attendance Record shows that she was working on June 17, 2010. She told the ISN investigators that she would have printed this cheque as part of a cheque-run, but did not recall this particular cheque as she prints a “lot of cheques.”

[371] Ms. Auckbaraullee stated that there was nothing about the cheque that struck her as odd or different. However, Ms. Stepic noted that the address on the cheque does not comply with the Canada Post regulation that the province and postal code be written on the same line. None of the eight cheques with addresses complied with this regulation. The word “Unit” was misspelled, and there is no indication as to whether “867 London” is a road, street, avenue etc. Although the business had a London address, the cheque was deposited in a bank in Sarnia.

[372] Mr. Simone noted that the name of the business contained an initial. Five of the other businesses to whom cheques were fraudulently issued had two or three initials in their name. This appeared to be a common theme.

The Account Listing (Exhibit 4(1)(c))

[373] There were no back-up documents located for this cheque. The Account Listing generated by SunSystems refers to “Sarnia H Improvement” as a creditor, and the $12,000 as a purchase invoice or “PI.” Ms. Stepic testified that it was unusual for the Account Listing not to include an invoice number or, in the alternative, the date of the Cheque Requisition. Here, the transaction reference is simply entered as “healthachi.”

[374] John Simone testified that the reference in the Account Listing to an invoice in relation to HealthAchieve suggests that there was an invoice, yet no back-up documents were ever found. The invoice was entered into SunSystems on the same day that the cheque was printed. As the Accounts Payable clerk, Ms. Auckbaraullee would have been responsible for completing that task.

[375] Ms. Stepic, Mr. Simone, Mr. Miller, Mr. DiClemente, and Ms. Wai testified that they did not recognize the vendor, and did not authorize or have anything to do with the processing of this cheque.

[376] The CIBC bank records indicate that Cristian Martinez was the sole proprietor of “Sarnia Home Improvement Service,” which was granted an Ontario business licence on April 7, 2010. The nature of the business was described as “Home and Warehouse Renovation.” Mr. Martinez opened a CIBC bank account in Sarnia for the business on April 13, 2010, or about two months before the cheque was printed.

2. June 29, 2010: Cheque No. 170862, payable to “H.G Distributors” in the amount of $16,525.00

[377] No back-up documents were found to support the issuance of this cheque. It was printed on Tuesday, June 29, 2010, at 3:58 p.m., and deposited on Friday, July 2, 2010, at a TD Canada Trust branch in Mississauga.

[378] Since there was no address on this cheque, it would not have gone to the mailroom or have been couriered. It would have needed to be hand-delivered or picked up.

[379] Ms. Auckbaraullee’s attendance records indicate that she was working on June 29, and that she worked for only half a day on June 30, 2010. She did not attend work on July 1, which was a statutory holiday, and was also off work on July 2. Ms. Auckbaraullee confirmed this information when speaking to the ISN investigators. She specifically recalled doing this cheque-run on Tuesday rather than on Wednesday because she was only working a half-day on the Wednesday.

[380] Ms. Auckbaraullee stated that the cheque would not have been mailed because it had no address. She explained that there would probably have been a sticky note on the invoice stating “Do not mail.” Whoever provided the invoice, which has never been located, would also have provided her with an explanation as to why there was no address for the company; for example, that the company was in the process of moving and thus had no fixed address.

[381] Ms. Auckbaraullee stated that the person to whom she would have given this cheque would not have been required to sign a document to confirm receipt of it.

[382] Ms. Stepic and Mr. Simone testified that the fact that there was no address on this cheque was unusual or strange. This usually only occurred when the cheque was for a staff member or a local caterer. Neither Ms. Wai nor Ms. Mahoobani had ever seen an invoice without an address, which was one of the main criteria in processing invoices and cheque requisitions.

[383] Ms. Stepic noted the absence of a period after the “G” in the name “H.G Distributors,” just as there was no period after the initial “H” in “Sarnia H Improvement.” She also added that she thought that it was strange that OHA would be purchasing from a distribution company.

[384] Mr. Simone testified that there should have been a New Vendor form filled out for H.G. Distributors. He was unable to find one, despite his search of the records going back one year.

[385] Mr. Simone testified that neither he nor more senior staff would have approved this cheque without an address. Ms. Auckbaraullee, who was working on June 29 and would have been the person who did the cheque-run, should have brought the lack of an address to his or Mr. Miller’s attention.

[386] Mr. Simone testified that Ms. Auckbaraullee had made mistakes in the past in terms of filing and coding errors, and that her lack of organizational skills had been addressed with her through her performance reviews. However, he was not aware of her having made an error such as this; that is, processing a cheque without an address.

The Account Listing

[387] The entry “2010 Healt,” which follows the date 06/29/10 in the Account Listing, indicates that the invoice was related to HealthAchieve. Mr. Simone testified that it is not possible to determine the date that H.G. Distributors was set up in the system. The cheque was printed on the first day that OHA resumed business after the closure caused by the G20.

[388] No back-up documents other than the Payment Listing and Account Listing was found for this cheque.

[389] Ms. Stepic, Mr. Simone, Mr. Miller, Mr. DiClemente, and Ms. Wai did not recognize H.G. Distributors as a vendor, and testified that they did not authorize or have anything to do with the processing of this cheque.

[390] Two further cheques for H.G. Distributors were issued by OHA in September 2010.

[391] The TD Bank Records indicate that H.G. Distributors was issued an Ontario business licence on June 25, 2010. The business address provided to the bank was 122 Earth Star Trail, Brampton, Ontario, Canada, L6R 2N8. The occupation of the sole proprietor, Sharde Elaine Rattray, is described as maintenance operator employed by the City of Brampton. The bank account was opened on June 26, 2010, or just three days prior to the printing of the cheque.

3. June 29, 2010: Cheque No. 170865, payable to “Elite Distributors,” in the amount of $14,850.00

[392] The address on this cheque appears as follows:

374 Queen Mary Dr

Brampton, ON

L7A 3T1

[393] No invoice or cheque requisition was ever located as back-up for this cheque.

[394] The cheque was printed on Tuesday, June 29, 2010, at 3:58 p.m., and was part of the same cheque-run that produced the cheque to H.G. Distributors for $16,525.00.

[395] The cheque was deposited at a CIBC Branch on Lisa Street in Brampton, Ontario, on June 30, 2010. It may be inferred that the cheque was not mailed but was either picked up or delivered. Mr. Miller noted that it was not printed until late afternoon on June 29, after which it would still have to be reviewed by him. Yet it was deposited in a Brampton bank the following day. Mr. Miller testified that he would not have approved the cheque if there was no invoice attached.

[396] CIBC’s records indicate that an account in the name of Elite Distributors was opened at the Lisa Street Branch in Brampton on June 24, 2010. The business, described as “Hospital Garment Distributors” on the Ontario business licence, was registered on June 21, 2010.

[397] Ms. Auckbaraullee told Mr. Perry that she was aware of a CIBC Branch in a plaza on Lisa Street, which was about a 10- to 15-minute drive from her home. She regularly attended at that plaza in order to pay her Rodger’s bill, but had never been in the bank.

[398] Ms. Stepic did not recognize this cheque or the purported vendor, “Elite Distributors.” Nor did Mr. Simone, Mr. Miller, Mr. DiClemente or Ms. Wai. All of them testified that they did not authorize or have anything to do with the processing of this cheque. Ms. Stepic stated that she found it odd that OHA would be purchasing from a distribution company. Mr. Simone’s Google search of the address, which he showed to Mr. Miller, showed a house, as opposed to a commercial or industrial building.

[399] When asked whether she remembered this cheque, Ms. Auckbaraullee stated that she processed a lot of cheques every week, and that it would be hard for her to remember each and every one of them. She could only recall the cheques issued to companies with whom OHA regularly did business.

[400] As stated earlier, Ms. Auckbaraullee specifically recalled doing this particular cheque-run, which was on a Tuesday.

The Reference Audit Report

[401] John Simone testified that he discovered a way to run a “Reference Audit Report” within SunSystems, which identified the creator of a New Vendor form. The identification was linked to the SunSystems user ID.

[402] The Audit Report with respect to Elite Distributors identified Ms. Auckbaraullee as the creator of the New Vendor form: “Created by AUC on 06/29/2010.” “AUC” was Ms. Auckbaraullee’s user ID for SunSystems.

The New Vendor Form

[403] Ms. Auckbaraullee completed the New Vendor form for Elite Distributors, in which she described the requisitioning department as “EDU.” Ms. Stepic and other witnesses testified that the proper designation for the Education Department was “EDUC.”

[404] Ms. Auckbaraullee told the ISN investigators that she did not include the business address for elite Distributors on the form, but simply wrote the words, “See attached,” presumably referring to an invoice. However, no invoice from Elite Distributors was ever located.

[405] Ms. Auckbaraullee signed her name at the bottom of the form beside “Accounts Payable,” and noted the date as June 29, 2010. During her interview, she identified the signature below hers as that of Mr. Simone.

[406] Ms. Stepic identified Ms. Auckbaraullee’s and Mr. Simone’s signatures on the New Vendor form. Mr. Miller identified Ms. Auckbaraullee’s signature, but testified that the second signature was not that of Mr. Simone.

[407] Mr. Simone initially testified that the signature on this form did not look like his signature. He then stated that it looked like his signature, but noted that his signature was very easy to copy, which is why he later changed it. Mr. Simone was certain that he would not have signed this form if an invoice had not been attached.

[408] Crown counsel noted that there was no date written beside Mr. Simone’s signature. Mr. Simone testified that sometimes he would just use “ditto” marks below the date entered by Ms. Auckbaraullee, but his failure to do so or to write the date would not be that unusual.

[409] In testifying about his signature on the New Vendor form for Elite Distributors, Mr. Simone commented that the signature on the New Vendor form for H.U.S. Services (Exhibit 4(6)(c)) was definitely not his signature.

The Account Listing

[410] The Account Listing recorded the payment of $14,850.00 to Elite Distributors as related to “Focus Health Achieve 2010.” Ms. Stepic testified that the fact that June 28, 2010, was entered as the transaction date indicates that there should have been an invoice or cheque requisition on file. However, none was found.

[411] John Simone testified that the date of June 28, 2010 on the Account Listing indicates the date the invoice was created. However, the information from the invoice would not have been entered on the Account Listing on that date as no one was in the office as a result of the G20. It was not entered into the system until June 29, when the office re-opened. Although the Account Listing does not indicate who entered the information, Ms. Auckbaraullee would most likely have entered it because that was her responsibility as the Accounts Payable clerk and she was at work that day.

[412] Mr. Simone testified that the cheque to Elite Distributors ought not to have been issued without back-up documentation.

[413] Ms. Auckbaraullee told the ISN investigators that Mr. Simone instructed her to look for the Elite Distributors’ invoice after the fraudulent cheque to M.W. Management was discovered. She looked everywhere for it but could not find it. She blamed this state of affairs on the temporary staff hired to assist her with filing:

We had the year end. We had temp agency and we have a student that is in the office and do [sic] all the filing for me.

4. September 24, 2010: Cheque No. 171761, payable to “H. G Distributors” in the amount of $15,000

[414] Like the cheque issued to H.G. Distributors on June 29, 2010, there was no address on this cheque, dated September 24, 2010, even though bank records from June 26, 2010, indicate that the business address was 122 Earth Star Trail in Brampton.

[415] The Payment Listing shows that the cheque was printed on Friday, September 24, 2010, at 1:24 p.m. It was deposited on Monday, September 27, 2010 through an ATM at the TD Canada Trust branch at 7205 Goreway in Mississauga. Since there was no address on the cheque, it had to have been, as Mr. Miller put it, “carried out of the office.” He noted that after it was printed, the cheque still had to be reviewed by him. In his view, it was unlikely that the cheque could have been processed that quickly, given that it was not even printed until Friday afternoon.

[416] Ms. Auckbaraullee told Mr. Perry that she recognized the company name on this cheque as Mr. Simone had asked her to look for the back-up documents after the fraud was discovered.

[417] Ms. Stepic was not at work on September 24, 2010, as she took the day off to attend her grandmother’s funeral. She testified that she had nothing to do with the processing or printing of this cheque. Similarly, Mr. Simone, Mr. Miller, Mr. DiClemente, and Ms. Wai testified that they had nothing to do with the creation of this cheque.

The Invoice

[418] According to Ms. Stepic, Mr. Simone, and Mr. Miller, the fact that the cheque had no address was unusual, given that the back-up document – an invoice dated September 3, 2010 – provided a Calgary address: Suite 356, 1501-15 St SW, Calgary – AB T3C 1C9. That address should have been on the cheque. Ms. Wai found it “very strange” that there was no address on the cheque, and would not have approved payment of it.

[419] A “Received” stamp, which Ms. Auckbaraullee told Mr. Perry was used by her, indicates that the invoice came into her possession on September 24, 2010, which is the same day that the cheque was printed. When asked whether she recognized the invoice, Ms. Auckbaraullee stated that she had seen it in Doug Miller’s office.

[420] Ms. Stepic noted that vendors normally generate an invoice number. It was therefore a “little unusual” that this invoice was not numbered.

[421] The invoice was addressed to Isabella Wai, Director, Convention Exhibits, Health Achieve. “HealthAchieve” was misspelled, as there was a space left between the two words. In addition, the invoice referred to the Metro Toronto Convention Centre as “MTTC,” instead of the letters “MTCC.”

[422] In describing the services provided, the invoice again misspelled “HealthAchieve,” this time by omitting the “e” in “achieve.” The services were described as follows:

Services from Nov 5- 6- 7- 8- 9, OHA HEALTHACHIVE, FULL SERVICE AT MTTC, As per amended agreement,

PAYMENT BY SEP 22/2010 $ 15,000.00

PAYMENT BY SEP 30/2010 $ 9,250.00

[423] Ms. Wai testified that normally, the “move in” dates of the convention, which were November 5 and 6, would not be referred to in an invoice. She also testified that it is uncommon for an invoice to include two amounts to be paid.

[424] Ms. Mahoobani noted that the conference portion of HealthAchieve was actually held from Monday, November 8 to Wednesday, November 10. The invoice omitted November 10.

[425] Ms. Stepic and Ms. Wai noted that the invoice did not describe the services to be rendered, and only referred to an “amended agreement.” In these circumstances, the agreement ought to have been attached to the invoice. Ms. Stepic testified that if she had been processing this invoice, she would have asked Ms. Wai what services were involved, and requested a copy of the agreement. Ms. Stepic also noted that the invoice was for a pre-payment of services that would not have been rendered until November 2010.

[426] Mr. Simone testified that sometimes OHA will pay an initial deposit toward a fee charged by a speaker at HealthAchieve. However, OHA did not pre-pay for services, which appears to be what H.R. Distributors was providing.

[427] Mr. Miller testified that the request for full payment prior to the HealthAchieve convention would have caused him to make further inquiries of Ms. Wai, particularly since there was no indication on the invoice of a guarantee that the services would be provided. Ms. Wai testified that she would not have processed this invoice prior to the event.

[428] The stamp placed on the invoice was, according to the testimony of Ms. Stepic, Mr. Simone, Mr. Miller, Ms. Wai, Ms. Mahoobani, and Ms. Cho, filled out incorrectly. The Initiative and Account codes were written beside “DEPT,” where the department code – “EDUC” – should have appeared. There was also no amount set out for the GST or HST, which would have caused Ms. Wai to return it to H.G. Distributors rather than process it.

[429] When questioned about the two signatures on the invoice, Ms. Auckbaraullee told Mr. Perry that the first signature appeared to be that of Ms. Wai. Ms. Wai testified that this was not her signature and that she had never seen this invoice. The second signature, which appears beside the “Approval” box, should have been that of Warren DiClemente. That signature is illegible, and was described by Mr. Perry as a “squiggle.” Ms. Auckbaraullee stated that she did not recognize the signature. Mr. DiClemente testified that the “squiggle” was not his signature.

[430] Mr. Miller noted that the stamp on the invoice indicates that it was approved on September 10, 2010 by the two individuals from the Education Department who allegedly signed it. However, the “Received” stamp indicates that Ms. Auckbaraullee did not receive it until September 24, 2010, which was an unusually long time lag.

5. September 29, 2010: Cheque No. 17809, payable to “H.G. Distributors,” in the amount of $9,250.00

[431] The address on this cheque was as follows:

122 Earthstart Trail

Malton, ON

L6R -2N8

[432] The correct address was presumably “122 Earth Star Trail, Brampton, ON L6R 2N8,” which was the address provided by Sharde Elaine Rattray to the TD Bank when she opened the business account in June 2010. The province and postal code on the cheque were not set out on the same line, as required by Canada Post. Ms. Stepic, Mr. Miller, and Ms. Wai noted that this address is different from the Calgary address that appears on the invoice and which also appeared on the invoice with respect to the September 24th cheque issued to H.G. Distributors. Ms. Stepic described this as “unusual”: the addresses on the cheques should match the addresses on the invoices.

[433] The cheque was printed as part of the regular cheque-run on Wednesday, September 29, 2010, at 11:30 a.m., and was deposited on Thursday, September 30, 2010, at an ATM at the TD Canada Trust branch at 7205 Goreway in Mississauga. Ms. Stepic testified that given the short time frame between the printing of the cheque and when it was deposited, the cheque would not have been mailed. Canada Post would not have delivered it that quickly.

[434] Ms. Stepic testified that she was working on September 29, 2010, but was not covering for Ms. Auckbaraullee. Had she been acting as the Accounts Payable clerk that day, she would have brought the discrepancy between the address on the invoice and the address on the cheque to the attention of Mr. Simone.

The Invoice

[435] The back-up document for this cheque is the same invoice that was used with respect to Cheque No. 4. However, there is no “Received” stamp indicating when Accounts Payable received it. Ms. Stepic testified that all invoices were supposed to be stamped with the Received stamp.

[436] The larger stamp, which was used by the department submitting the invoice, indicates that it was from the Education Department. Like Cheque No. 4, the box where the GST should have been left blank.

[437] During her interview, Ms. Auckbaraullee identified Ms. Wai’s signature beside the “Rec’d By” box. She did not recognize the illegible squiggle beside the “Approval” box. Part of the “squiggle” is not visible as it was cut off during the photocopying process. Ms. Auckbaraullee told Mr. Perry that it did not appear to her to be the same illegible signature or squiggle on the H.G. Distributors’ invoice used as back-up for Cheque No. 4.

[438] Mr. Simone testified that the signatures are not those of Ms. Wai or Mr. DiClemente.

[439] Ms. Wai testified that she never received this invoice. The writing within the stamp on the invoice is not hers. Her signature has been forged. Mr. DiClemente testified that the second signature or “squiggle” is not his signature.

[440] The cheque is dated September 29, 2010. However, the date on which Ms. Wai and her superior allegedly approved payment is October 24, 2010. It appears, therefore, that the cheque was printed before payment was approved. Mr. Simone testified that he would have expected Ms. Auckbaraullee to have caught this discrepancy. If she missed it, he would have expected Mr. Miller to catch it, as he reviewed the Payment Listings before the cheques were released.

[441] Mr. Miller testified that he would not have approved this cheque had it crossed his desk. I note that there is no cheque summary for the cheque-run dated September 24, 2010, and that the cheque summary for September 29, 2010, was never initialed by Mr. Miller. Nor was the Payment Listing for that date, which was combined with the Payment Listing for September 24, 2010. This implies that the three fraudulent cheques printed on September 29, and the cheque to H.G. Distributors on September 24, 2010, were never placed before him for review. (See Exhibits 7 and 9).

6. September 29, 2010: Cheque No. 171818, payable to “H.U.S. Services” in the amount of $13,750.00

[442] The address that appears on this cheque was written as follows:

75 Dowling Ave,Unit310 [sic]

Toronto-On

M6K -3G7

[443] This cheque was printed on Wednesday, September 29, 2010, at 11:31 a.m., and was deposited on Friday, October 1, 2010. Mr. Simone and Mr. Miller testified that given this time frame, it is unlikely that the cheque was mailed. Mr. Miller pointed out that after the cheque was printed, it still had to be approved by him, and was therefore unlikely to have been mailed on September 29.

[444] Mr. Simone noted that the invoice was processed and paid on the same day. That was not that unusual, but it appeared to be a common theme with respect to these fraudulent cheques.

[445] Ms. Stepic noted the various errors in the address as it appeared on the cheque, including the lack of a space between the comma and the word “Unit,” and the lack of a space between “Unit” and “310.” The postal code contains the same deficiencies as the postal codes on the other fraudulent cheques.

[446] Ms. Stepic was at work on September 29, 2010, but was not covering for Accounts Payable that day.

[447] When asked by Mr. Perry if she remembered printing this cheque, Ms. Auckbaraullee stated, “Yes, I was in the office.” She also stated that it would have been part of her “regular batch” of cheques, and that she put all of the cheques in the mail. She agreed that she was working on September 29 and October 1, 2010. She also recalled that she had injured her finger on Sunday, September 26, 2010.

[448] Ms. Auckbaraullee explained to Mr. Perry that after the cheques were printed, they were matched with the back-up documents and given to Mr. Miller for approval. They were then returned to her, at which point they were separated from the stubs and put into envelopes. When she was very busy, she would ask Eric Pinto to “stuff” the cheques into envelopes, and then put them in the box in the mailroom for pick-up by the courier, who took them to Canada Post.

[449] Ms. Auckbaraullee told Mr. Perry that she had not stuffed cheques into envelopes “for a long time,” or since she injured her finger. She missed approximately two weeks of work as a result of this injury.

[450] Ms. Stepic recognized the cheque issued to H.U.S. Services as the one that the TD Bank had called about in early October 2010, and for which she could not find any back-up documents at the time. She could not say where or when the back-up documents eventually turned up.

[451] During her interview, Ms. Auckbaraullee recalled that Ms. Stepic had called her at home regarding the H.U.S. Services cheque sometime during the first week after the surgery on her finger. Ms. Stepic told her that the bank had called her or Doug Miller, and wanted “a phone number or something.” Ms. Stepic told her that she could not find the phone number. Ms. Auckbaraullee told Ms. Stepic, “I wouldn’t know about it. It has to be somewhere there.” Ms. Auckbaraullee explained to Mr. Perry that because of the injury to her finger, she had not done any filing “for the past couple, like you know, days or so or prior to that. There was no filing done.” She stated that a lot of the filing was sitting on top of the cabinet in her office.

[452] Ms. Stepic agreed in cross-examination that OHA hired temporary workers to assist with filing. College students, who were employed from the end of April to the end of August, helped with filing/organization. The children of some staff members also worked in this capacity during the summer.

[453] The back-up documents for this cheque included a cheque stub with half an invoice, which were photocopied together on the same page, (Exhibit 4(6)(b)), and a New Vendor form.

Photocopy of Two Documents: Cheque Stub and Half an Invoice

[454] The cheque stub appears on the top half of the document, and the invoice appears on the bottom half of this document. The vendor’s name and address have not been reproduced or were cut off in the photocopying process. The invoice has been stamped as having been received by Accounts Payable on September 24, 2010. The larger stamp, allegedly filled out by someone from the Education Department, indicates that the invoice was approved three weeks earlier, on August 31, 2010. Mr. Simone, Mr. Miller, and Ms. Wai testified that this three-week delay in delivery to Accounts Payable makes no sense.

[455] Ms. Auckbaraullee told Mr. Perry that she did not recognize either of the two signatures in the Accounts Payable stamp – either the “squiggle” that appears beside the “Rec’d By” box, or the “Approval” signature below it.

[456] Ms. Stepic testified that the first signature could be that of Mr. DiClemente. However, the appropriate place for him to sign would have been in the “Approval” box. The other signature may have been that of Carissa Martin, who worked in the Education Department. However, the appropriate person to process an invoice relating to a speaker at HealthAchieve would have been Lina Pallatto. Ms. Wai confirmed this in her testimony.

[457] Mr. Simone testified that although Ms. Martin is in the Education Department, she works in governance, and was not authorized to process an invoice for HealthAchieve. He testified that logically, the other signature should have been that of Warren DiClemente, but it was not. Mr. DiClemente confirmed in his testimony that the “squiggle” was not his signature.

[458] Mr. Miller testified that Lina Pallatto and her supervisor, Bob Holden, as well as Ms. Wai and Mr. DiClemente, would have been authorized to approve this invoice. Mr. Miller was familiar with the signatures of all of these people. None of their signatures appear on this invoice.

[459] Ms. Mahoobani, who was familiar with the signatures of Lina Pallatto and Mr. Holden, confirmed that neither of their signatures are on this invoice.

[460] Mr. Perry asked Ms. Auckbaraullee to compare the “squiggle” signature on this document with the “squiggle” signatures that appear in the same Accounts Payable stamp on Exhibits 4(4)(b) and 4(5)(b), both of which are invoices from H.G. Distributors. Ms. Auckbaraullee stated: “They don’t look the same to me”; “All three of them, they all three look different”; “I think they look different.” She denied having written any of these signatures herself.

[461] Ms. Stepic, Mr. Simone, Ms. Cho, Mr. Miller, and Ms. Wai pointed out that the Account Code on Exhibit 4(6)(b) has been written in the space for the Initiative Code, and the Initiative Code has been written in the space for the Account Code. There was no entry in the GST box.

[462] The services described on the invoice are as follows:

DEPOSIT FOR SPEAKERS PRESENTION [sic] FOR HEALTHACHIEVE – NOVEMBER 8TH – 2010

TWO SESSIONS AT $ 6,875

In order to confirm these sessions, a deposit is required by Sep 30/2010

TOTAL DUE $13,750

[463] Mr. Simone and Ms. Mahoobani testified that it would be unusual to have the same speaker speak at two sessions during HealthAchieve. Normally, there would be a contract or memorandum of understanding for this type of service, which should have been attached to the invoice.

[464] Mr. Miller testified that invoices for speakers usually contained more detail, such as the session at which the person was to speak.

The New Vendor Form

[465] Ms. Auckbaraullee explained to Mr. Perry how she filled out the New Vendor form for H.U.S. Services. All of the entries on that form are hand-written. She entered the business code, “PHUS” in the appropriate place. In the space where the address was to be entered, she simply wrote, “See Attached.” She explained that she did not rewrite the address on the form because it was already on the page containing the invoice and cheque stub. Mr. Simone, when verifying the information, could go into SunSystems and see the address.

[466] Mr. Simone pointed out that the full invoice was not attached to the form, although the address appears on the cheque stub.

[467] Ms. Auckbaraullee identified her signature beside the words “Accounts Payable” at the bottom of the form. She did not enter the date beside her signature.

[468] Ms. Auckbaraullee identified the signature below hers as that of John Simone, which appears beside the words, “Manager/CFO”:

Q. Okay. So Accounts Payable, this is you?

A. That’s me.

Q. Okay, and then Manager/CFO?

A. That would be John.

Q. Okay. Is that John?

A. Uh, he sign like this and that’s what he brought to me and I said –

Q. M’hmm.

A. –“this is your signature.”

Q. Right. Okay.

A. Because uh who –

Q. Can you just put your initials on that page?

A. - like there’s no one else that verified it.

[469] John Simone testified that this was definitely not his signature. He testified that it was also not the signature of Doug Miller, who was the only other person who was authorized to approve a New Vendor form at that time.

[470] The New Vendor form was not dated. Mr. Simone testified that “it could happen” that a date was omitted if he were reviewing a large number of forms.

[471] Ms. Stepic testified that the absence of a date would have caused her some concern if she were processing this cheque. The forms are supposed to be dated. Mr. Miller found the absence of a date to be “unusual.”

[472] Ms. Stepic noted that Ms. Auckbaraullee’s signature on the New Vendor form for H.U.S. Distributors differs somewhat from her signature on the June 28, 2010 New Vendor form for Elite Distributors. She testified that the signature on the Elite Distributors’ form more closely resembles the way she remembered Ms. Auckbaraullee’s signature.

[473] Ms. Auckbaraullee told Mr. Perry that after she injured her finger on September 26, 2010, her signature was “a little bit different.” It appears that this explains the differences noted by Ms. Stepic in the two signatures. Based on Ms. Auckbaraullee’s statements to Mr. Perry as to how she filled out the New Vendor form for H.U.S. Distributors, there can be no doubt that it is, in fact, her signature on that form.

The Account Listing

[474] In terms of the services allegedly provided by H.U.S. Services, the Account Listing refers to “Healachive Speaker” beside the posting of the purchase invoice for $13,750. This invoice was never found.

The Reference Audit Report

[475] As stated earlier, John Simone testified that he found a way to run a Reference Audit Report within SunSystems that would identify the creator of the New Vendor form. The identification was through the SunSystems user ID.

[476] The Reference Audit Report with respect to the vendor account for H.U.S. Distributors shows that Ms. Auckbaraullee created it on the same day that she processed the invoice and the cheque was printed. Ms. Stepic testified that this was unusual, given that Mr. Simone’s approval of a New Vendor form was required before an invoice could be entered onto the system. Since Mr. Simone was very busy, it was unlikely that he would have approved the form right away.

[477] Ms. Stepic testified that after receiving the call from the TD Bank in relation to this cheque, and leaving the matter in Doug Miller’s hands, she heard nothing further about the matter. The cheque was obviously cashed.

[478] Ms. Auckbaraullee told Mr. Perry that it was Mr. Simone who first informed her that the invoice from H.U.S. was fraudulent. He told her that it had been shown to employees in the Education Department and that no one recognized it. When asked by Mr. Perry for her response upon learning about the fraud, she stated: “That I’m re – like you know, why I process it. I should question it. Because when he showed me who signed it I said, ‘I don’t understand. I don’t know.”

[479] Ms. Stepic, Mr. Simone, Warren DiClemente, Ms. Wai, and Mr. Miller testified that they did not recognize H.U.S. Services as a vendor, and did not authorize or have anything to do with the processing of this cheque.

[480] The TD Bank records indicate that an account for H.U.S. Services was opened on September 23, 2010, or just one week prior to the printing of the fraudulent cheque. The sole proprietor of the business, Courtney Omari Chambers, had a Brampton address. The nature of the business was described as “Linen Supply.”

7. September 29, 2010: Cheque No. 171833, payable to “JN Distributors” in the amount of $8,750.00

[481] The address that appears on this cheque was as follows:

54 Noble Drive

Bardford, ON [sic]

L3Z 3A8

[482] “Bardford” was a misspelling of “Bradford.” Ms. Stepic testified that it is unusual that such a mistake would go unnoticed, since the New Vendor forms were reviewed by John Simone. If there was a mistake while entering the address on the system, he would likely have caught it.

[483] This cheque was printed on Wednesday, September 29, 2010, at 3:57 p.m. There are two bank tellers’ stamps on the back of the cheque – one from the Bank of Montreal, dated Friday, October 1, 2010, with an address on Holland Street West in Bradford, and the second from TD Bank and dated Tuesday, October 5, 2010. Mr. Simone testified that he found this “odd.” In any event, the fact that the cheque was in the hands of the payee by October 1, 2010, having only been printed in the late afternoon on September 29, 2010, at which point it would still have to be reviewed by Mr. Miller, implies that it was not mailed but either picked up or delivered. Ms. Auckbaraullee agreed that September 29, 2010, was one of her regular cheque-run days.

[484] No back-up documents were located to support the issuance of this cheque. When asked by Mr. Perry if she ever saw an invoice related to this payment, Ms. Auckbaraullee stated that she could not recall if she “pulled” an invoice for Mr. Simone after the fraud was discovered.

The Account Listing

[485] The Account Listing indicates that this was the second cheque issued for $8,750.00 on September 29, 2010. The first cheque, which was part of the same cheque-run that printed the cheque to H.U.S. Services at 11:30 a.m., was payable to “GN Distributors,” as opposed to “JN Distributors.” The first cheque was voided. The second cheque was printed at 3:57 p.m. on its own. Mr. Simone testified that someone obviously caught the error with respect to the vendor’s name, went into SunSystems, and modified it. As the Accounts Payable clerk, Ms. Auckbaraullee would have been the one who made that correction. Other OHA employees who had the ability to make that change included Mr. Simone, Ms. Stepic, and Mr. Miller.

[486] Ms. Stepic noted that the invoice was entered in the Account Listing using the date of September 5, 2010. This entry indicates that there was either an invoice or a cheque requisition. Invoices are normally entered by reference to their number. It is unusual for an invoice not to have a number.

[487] Ms. Stepic, Mr. Simone, Mr. Miller, Ms. Wai, and Mr. DiClemente testified that they did not recognize this vendor and did not authorize or have anything to do with the processing of this cheque.

[488] Records from the Bank of Montreal show that Jeffrey Twumasi Ntim, who is referred to as the sole proprietor of JN Distributors, registered the business with the Province of Ontario on September 23, 2010. The business was described as “Healthcare Uniform Supply.” Mr. Ntim opened the Bradford bank account for JN Distributors on September 25, 2010, or four days before the cheque was printed.

8. October 20, 2010: Cheque No. 172058, payable to “M.W. Management” in the amount of $9,755.00

[489] The address on this cheque contained mistakes in terms of spacing and the placement of the postal code. The address, as printed, was as follows:

33, Carisbrooke Square

Toronto, ON

M1B -4M5

[490] This cheque was printed on Wednesday, October 20, 2010. The cheque summary indicates that it was the last of 101 cheques printed that day. The Payment Listing, however, indicates that the first 100 cheques were printed at 2:27 p.m., and that the cheque issued to M.W. Management was printed on its own at 3:49 p.m. Ms. Auckbaraullee told Mr. Perry that the cheque was probably mailed because it did not have an address, and there was no request made on the cheque requisition that it be returned to the person submitting it.

[491] The cheque was never cashed, as RBC put a hold on it after contacting Mr. Simone and raising concerns about its legitimacy. It was eventually voided at Mr. Simone’s request.

[492] Mr. Simone was away for the entire day on October 20, 2010.

[493] Mr. Simone, Ms. Stepic, Mr. Miller, Mr. DiClemente, and Ms. Wai testified that they did not recognize the vendor, or authorize or have anything to do with the processing of this cheque.

[494] Ms. Auckbaraullee’s attendance record indicates that she was at work on October 20, but was absent for one hour. Ms. Auckbaraullee disagreed with Mr. Perry that she took an hour off:

Perry: Regular run and you were working, you did six hours, and is, I know that might not be the way it is, but it shows up “sick paid, one hour.”

Ms. Auckbaraullee: Yeah, but I haven’t taken any one hour.

Perry: Okay, but you were here on the 20th?

Ms. Auckbaraullee: Yeah.

Perry: Okay.

Ms. Auckbaraullee: Even though like it shows that, because of the train hours, like the train doesn’t leave till 4:15 –

Perry: M’hmm.

Ms. Auckbaraullee: -- and I don’t want to just sit in the Go Station [chuckle].

[495] The back-up documents include two cheque requisitions from the Education Department, which appear to be identical: Exhibits 4(8)(b) and (c). Both refer to two amounts: $9,755.00 and $9,489.00.

[496] Another back-up document was a photocopy of a cheque stub for $9,755.00, and the bottom half of the cheque requisition, which were photocopied onto one page: Exhibit 4(8)(e). Exhibit 4(8)(d) is a similar document but with a photocopy of a cheque stub for $9,489.00. Both cheque stubs include the vendor’s name and the Carisbrooke Square address.

[497] There was also a Payment Listing and a New Vendor form for M.W. Management.

Cheque Requisitions: Exhibit 4(8)(b) and 4(8)(c)

[498] Ms. Auckbaraullee told Mr. Perry that the cheque requisitions for M.W. Management would have been dropped off in her inbox. Both requisitions are stamped as having been received by her on October 19, 2010.

[499] The cheque requisitions were filled out in such a way that the address appears beside the space for the name of the business, and “Toronto” and the postal code appear beside the space for the address. The space for the postal code was left blank.

[500] Ms. Stepic noted that since the requisitions referred to an agreement, the agreement should have been attached to them. No such agreement was located.

[501] Ms. Wai testified that she only completed a cheque requisition when there was no invoice. That situation arose when there was a contract, for example, with an entertainment company, and a deposit was required. She used a standard template for cheque requisitions, which the accounting department had sent her electronically. She would attach the contract to the cheque requisition when submitting it to Accounts Payable.

[502] Each cheque requisition with respect to M.W. Management requested two payments:

Make two Chq 9,755.00 Date Oct 20-2010/ 9,489.00 on Oct 27/2010.

[503] Ms. Stepic, Mr. Simone, Ms. Wai, and Ms. Cho testified that this was unusual, as there should have been two separate cheque requisitions – one for each amount.

[504] There was no reference to the HST or GST. Ms. Stepic would not have processed this cheque requisition in the absence of that information.

[505] Ms. Stepic, Mr. Miller, and Ms. Cho noted that the space for the “Account Number” mistakenly contains the “Activity Code”; further, the space for the “Activity Code,” also known as the “Initiative Code,” mistakenly contains the Account Number.

[506] Ms. Auckbaraullee told Mr. Perry that she did not recognize either of the two illegible signatures that appear beside the words “Approved By” at the bottom of the cheque requisitions. She stated that she would have just looked to see if there was a signature and then processed the payment. She denied writing those signatures herself, pointing out that she was not authorized to approve a cheque requisition.

[507] Mr. Simone testified that one of the signatures should have been that of Lina Pallatto. However, her signature, which he testified that he would recognize, does not appear on this document. Ms. Wai may have had authority to approve this payment, but her signature is also missing.

[508] Ms. Stepic testified that given that the cheque requisition was from the Education Department, Warren DiClemente and Isabella Wai or Lina Pallatto should have signed it, but they did not.

[509] Warren DiClemente and Isabella Wai confirmed in their testimony that they did not sign either of these cheque requisitions. Ms. Wai noted that the template for cheque requisitions that she used contained two lines – one for each signature – whereas these two cheque requisitions had only one line for both signatures.

[510] The space for the date of approval was left blank.

[511] The “Explanation” for the services in the cheque requisitions states: “Materials for 50 Participants/OHA Customer services/As agreed for services.” Ms. Wai testified that it would be strange for OHA to order print material from M.W. Management when it had a contract with another company for that service.

[512] As noted earlier, a man by the name of Merv Williams attempted to cash this cheque. Mr. Simone testified that during his telephone conversation with him, Mr. Williams told him that the first payment was a deposit, the second payment was for “November Expo 2010,” and that the services were provided in March 2010. This did not make any sense to Mr. Simone, since HealthAchieve had not as yet taken place.

Pages Containing the Cheque Stubs and Half a Cheque Requisition

[513] The cheque stub portion of Exhibit 4(8)(d) indicates that an invoice was entered on October 27, 2010 for $9,489.00. The cheque stub portion of Exhibit 4(8)(e) indicates that an invoice for $9,755.00 was entered on October 20, 2010, and that the cheque was printed the same day. No invoice was ever found.

New Vendor Form

[514] The New Vendor form for M.W. Management indicates that the Education Department made the cheque requisition. The form appears to have been signed by Ms. Auckbaraullee. John Simone identified the signature as that of the accused. Ms. Stepic testified that although the signature says “Anissah” (Ms. Auckbaraullee), she was “actually not sure” if it was the accused’s signature.

[515] The signature where the “Manager/CFO” was required to sign is not legible. John Simone testified that it was neither his nor Doug Miller’s signature.

[516] The date of October 19, 2010 appears beside Ms. Auckbaraullee’s signature. The Payment Listing indicates that there was a cheque-run on October 20, 2010 at 2:27 p.m. It appears that the cheque to M.W. Management was not part of that run but was printed by itself at 3:49 p.m.

[517] Ms. Stepic testified that normally a cheque-run includes everything that has been entered that day or on earlier days. However, a cheque might be printed on its own if it is a “rush job.” It would be possible to print a cheque and take it without anyone knowing about it.

[518] Mr. Simone testified that New Vendor forms do not always come to him on the same day that they are completed, and that they usually sit on his desk for a few days before he has an opportunity to review them. He does not rush the reviews but takes his time, refusing to “turn it around quickly just for the sake of turning it around quickly.” This New Vendor form was dated October 19, 2010. As stated earlier, Mr. Simone was not in the office on October 20.

[519] Mr. Simone testified that when he questioned Ms. Auckbaraullee about this New Vendor form after it came to light, she insisted that he had seen it and that the signature at the bottom of the page was his signature. Mr. Simone told her that it was not his signature. Ms. Auckbaraullee reiterated that it was his signature. Mr. Simone did not continue to argue with her: “I just dropped it there. Obviously we’re at a difference of opinion, or difference – me knowing my signature over somebody who doesn’t.”

[520] Mr. Miller recalled that when Ms. Auckbaraullee was first asked to retrieve the back-up documents for this cheque, it took her two hours before she produced the cheque requisitions. The New Vendor form for M.W. Management did not show up until sometime later, although he was not sure when. He recalled having a conversation with Mr. Simone about the form. However, Mr. Miller did not actually see the form until November 18, 2010, when the ISN investigators showed it to him during his interview.

[521] Mr. Miller identified Ms. Auckbaraullee’s signature at the bottom of the form. However, the signature below hers, where Mr. Simone would normally sign, is not that of Mr. Simone.

[522] The RBC bank records indicate that an Ontario business licence was issued to M.W. Management on October 20, 2010, and that an account was opened on October 25, 2010. Merv Williams was named as the sole proprietor of the business, which was described as a “Nursing Home and Warehouse Cleaning Service.” The bank closed the account on November 25, 2010.

THE LAW RELATING TO FRAUD

[523] Section 380 (1)(a) of the Criminal Code states:

Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars;

The Elements of the Offence of Fraud

[524] The elements of the offence of fraud were discussed by the Supreme Court of Canada in R. v. Théroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5, 79 C.C.C. (3d) 449, and R. v. Zlatic, 1993 CanLII 135 (SCC), [1993] 2 S.C.R. 29, 19 C.R. (4th) 230, 79 C.C.C. (3d) 466.

[525] The actus reus of fraud will be established by proof of:

1. the prohibited act, be it an act of deceit, a falsehood or some other fraudulent means; and

2. deprivation, caused by the prohibited act, which may consist in actual loss or the placing of the victim’s pecuniary interests at risk.

[526] Where it is alleged that the actus reus of a particular fraud is “other fraudulent means,” the existence of such means will be determined by what reasonable people consider to be dishonest dealing. In instances of fraud by deceit or falsehood, it will not be necessary to undertake such an inquiry; all that need be determined is whether the accused, as a matter of fact, represented that a situation was of a certain character, when in reality, it was not: Théroux, at pp. 17-18.

[527] It is not necessary for the accused to have profited by the fraud: Théroux, at p.18

[528] The mens rea of fraud is established by proof of:

1. subjective knowledge of the prohibited act; and

2. subjective knowledge that the prohibited act could have as a consequence the deprivation of another (which deprivation may consist in knowledge that the victim’s pecuniary interests are put at risk).

[529] Where the conduct and knowledge required by these definitions are established, the accused is guilty whether he actually intended the prohibited consequences or was reckless as to whether it would occur: Théroux, at pp. 20-21.

[530] A person is not saved from conviction because he or she believes there is nothing wrong with what he or she is doing. The question is whether the accused subjectively appreciated that certain consequences would follow from his or her acts, not whether the accused believed the acts or their consequences to be moral. Just as the pathological killer would not be acquitted on the mere ground that he failed to see his act as morally reprehensible, so the defrauder will not be acquitted because he believed that what he was doing was honest: Théroux, at p. 19.

[531] The fact that an accused may have hoped that the deprivation would not take place, or may have felt that there was nothing wrong with what he was doing, provides no defence: Théroux, at p. 20.

[532] In the present case, there is no question that OHA was defrauded of $80,370.00. This amount would have been higher had the cheque issued to M.W. Management for $9,755.00 been cashed.

[533] There is also no question (and the parties did not argue otherwise) that the same person or persons within OHA orchestrated the printing of all eight fraudulent cheques. The following factors support this conclusion:

• The eight cheques were issued within a relatively short time frame, starting on June 17, 2010 and ending on October 20, 2010.

• Some of the cheques were printed in the same cheque-run: two were printed on June 29, 2010, and three were printed on September 29, 2010.

• Three cheques, dated June 29, September 24, and September 29, 2010, were made payable to the same vendor, H.G. Distributors.

• All the cheques were for amounts under $25,000, which meant that they were automatically printed with the electronic signatures of the CFO and CEO, and did not have to be signed.

• All the cheques were for amounts rounded to the nearest dollar – that is, there were no pennies charged.

• All the cheques related to the Education Department and were issued as payment for goods or services allegedly provided in connection with OHA’s HealthAchieve conference.

• There was a similarity in the names of the six purported vendors to whom the cheques were issued. The names were non-specific or generic and, with the exception of Elite Distributors, all contained at least one initial: Sarnia H. Improvement; H.G. Distributors; H.U.S. Services; JN Distributors; and M.W. Management.

• There was a similarity in the types of errors contained in the back-up documents. There were similar spelling mistakes and errors in the addresses. Codes for the Education Department were entered in the wrong boxes on the invoices. The GST or PST was not itemized on any of the invoices or cheque requisitions.

• Unlike most OHA cheques, which were sent by mail, none of the fraudulent cheques, with the possible exception of the cheque to M.W. Management, could have been mailed, given the short time frame between the date and time that they were printed and the date that they were received and deposited into a bank account. Two of the cheques were obviously not mailed as they lacked an address.

• There was also a commonality with respect to the bank accounts of the six purported vendors: each account was opened only days or weeks before the cheques were printed. Other than the OHA cheques, there was very little activity in any of these accounts.

[534] Based on the above factors, the inference that the same OHA employee or employees orchestrated the creation of all eight fraudulent cheques, and that they were part of one ongoing scheme, is extremely compelling.

[535] The main issue is identity, and whether the Crown has established beyond a reasonable doubt that Ms. Auckbaraullee was that individual.

EVALUATING CIRCUMSTANTIAL EVIDENCE

[536] The Crown’s evidence in this case is circumstantial. As such, in accordance with Villaroman, the Crown must demonstrate that an inference of guilt is the only reasonable inference available on the totality of the evidence. The approach to be taken by the trier of fact in assessing circumstantial evidence was described by the Court at para. 37:

When assessing circumstantial evidence, the trier of fact should consider “other plausible theor[ies]” and “other reasonable possibilities” which are inconsistent with guilt: R. v. Comba, 1938 CanLII 14 (ON CA), [1938] O.R. 200 (C.A.), at pp. 205 and 211, per Middleton J.A., aff’d 1938 CanLII 7 (SCC), [1938] S.C.R. 396; R. v. Baigent, 2013 BCCA 28, 335 B.C.C.A. 11, at para. 20; R. v. Mitchell, [2008] QCA 394 (AustLll), at para. 35. I agree with the appellant that the Crown thus may need to negative these reasonable possibilities, but certainly does not need to “negative every possible conjecture, no matter how irrational or fanciful, which might be consistent with the innocence of the accused”: R. v. Bagshaw, 1971 CanLII 13 (SCC), [1972] S.C.R. 2, at p.8. “Other plausible theories” or “other reasonable possibilities” must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation.

[537] When the Crown relies on circumstantial evidence, the evidence must be evaluated as a whole rather than as individual pieces. It is the cumulative effect of the relevant circumstances that must be assessed in determining whether the Crown has met its burden. In R. v. Dodd, 2015 ONCA 286, at para. 59, the Court, quoting from R. v. Uhrig, 2012 ONCA 470, at para. 13, described the analysis to be conducted in a circumstantial case as follows:

When arguments are advanced, as here, that individual items of circumstantial evidence are explicable on bases other than guilt, it is essential to keep in mind that it is, after all, the cumulative effect of all the evidence that must satisfy the standard of proof required of the Crown. Individual items of evidence are links in the chain of ultimate proof: R. v. Morin, 1988 CanLII 8 (SCC), [1988] 2 S.C.R. 345 (S.C.C.), at p. 361. Individual items of evidence are not to be examined separately and in isolation, then cast aside if the ultimate inference sought from their accumulation does not follow from each individual item alone. It may be and very often is the case that items of evidence adduced by the Crown, examined separately, have not a very strong probative value. But all the evidence has to be considered, each item in relation to the others and to the evidence as a whole, and it is all of them taken together that may constitute a proper basis for a conviction: R. v. Côté (1941), 1941 CanLII 348 (SCC), 77 C.C.C. 75 (S.C.C.), at p. 76.

APPLICATION OF W.(D.)

[538] Ms. Auckbaraullee did not testify and did not call any evidence. However, during her ISN interview, she denied any knowledge of the fraud. If I believe Ms. Auckbaraullee’s statements to the investigators that she did not knowingly print any fraudulent cheques, then I must find her not guilty. Even if I do not believe Ms. Auckbaraullee’s statements of denial, I must acquit her if I have a reasonable doubt based on those statements or other evidence favourable to the defence. Finally, even if that evidence does not leave me with a reasonable doubt, I must go on and determine whether the Crown has proved Ms. Auckbaraullee’s guilt beyond a reasonable doubt. In assessing Ms. Auckbaraullee’s statements, I am entitled to consider them in the context of all of the evidence.

ANALYSIS AND FINDINGS

[539] The Crown submits that Ms. Auckbaraullee knew that the cheques were fraudulent because she forged the signatures on the fictitious invoices and cheque requisitions, as well as John Simone’s signature on three New Vendor forms. At other times, Ms. Auckbaraullee simply printed cheques without creating any fictitious invoices or cheque requisitions, which is why there were no back-up documents for some of the cheques. Although there were three individuals who had the knowledge, training and ability to print cheques – Ms. Auckbaraullee, Ms. Stepic, and Mr. Simone – Ms. Auckbaraullee was the only one who was at work on each of the days when a fraudulent cheque was printed.

[540] Ms. Auckbaraullee submits that the Crown has not established that she is responsible for the fraudulent cheques. She submits that Ms. Stepic, with the assistance of Mr. Stepic and his IT skills, perpetrated the fraud. Ms. Auckbaraullee also relies on the cheque summaries, and the fact that someone else’s initials are included in the “Run By” column of the cheque summaries for the cheque-runs that produced some of the fraudulent cheques.

[541] Ms. Auckbaraullee submits that even if she printed the fraudulent cheques, she would not necessarily have realized that they were fraudulent. She simply overlooked or missed various errors in processing the invoices and cheque requisitions. She noted that invoices could be inputted by anyone who had access to SunSystems without that person being identified, as SunSystems did not create a log-in record. Thus, an employee in Education could have anonymously entered false invoices using Mr. Pinto’s or Ms. Mahoobani’s computers on the 28th floor without being identified. Ms. Auckbaraullee submits that cheques that were printed based on these fraudulent documents could have been intercepted in the mail room and before they were picked up by the courier for delivery to Canada Post. Ms. Auckbaraullee also submits that a sticky note attached to an invoice could have directed that a cheque be returned to the employee submitting it, or that it be sent to Reception for pick-up by the vendor.

[542] I will first address the issue of whether the Crown has established beyond a reasonable doubt that neither Kathleen Stepic, either acting alone or in conjunction with Peter Stepic, nor Mr. Simone, committed the fraud. If the Crown has not met its burden in this regard, then I must acquit Ms. Auckbaraullee. If the Crown has established that none of these individuals committed the fraud, then I must go on and determine whether the Crown has established its case against Ms. Auckbaraullee beyond a reasonable doubt.

Has the Crown established beyond a reasonable doubt that Kathleen Stepic, either alone or in conjunction with Peter Stepic, did not commit the fraud?

[543] Ms. Stepic testified in a direct and straightforward manner, and exhibited no animosity towards Ms. Auckbaraullee. Her evidence that they enjoyed a friendly relationship was supported by the evidence of Mr. Simone. Ms. Stepic and Ms. Auckbaraullee appeared to get along well. They had coffee together, occasionally went out to lunch, and “leaned on each other” when they were both experiencing marital difficulties. Ms. Stepic observed that Ms. Auckbaraullee was always busy in her role as the Accounts Payable clerk. As a result, Ms. Stepic would assist her with various tasks when she had some free time.

[544] Ms. Stepic did not exaggerate, and appeared to take care to be as accurate and fair as possible when giving her evidence. For example, although she identified Ms. Auckbaraullee’s signature on the New Vendor form for Elite Distributors, she was cautious when considering whether it was Ms. Auckbaraullee’s signature on the New Vendor form for H.U.S. Services. She noted that it appeared to be somewhat different from the signature on the Elite Distributors’ form, and that the latter signature more closely resembled Ms. Auckbaraullee’s signature as she remembered it.

[545] There can be no doubt that Ms. Auckbaraullee did, in fact, sign the New Vendor form for H.U.S. Distributors – she identified her signature on that form during the ISN interview. In addition, the Reference Audit Report, Exhibit 4(6)(e), identifies her as having created the form for that vendor on September 29, 2010. However, her signature at that time, as she explained to Mr. Perry, was somewhat different as a result of the injury to her finger on September 26, 2010.

[546] Ms. Stepic, having observed a difference between the two signatures, was hesitant to attribute the signature on the H.U.S. Services form to Ms. Auckbaraullee.

[547] When asked if she could identify Ms. Auckbaraullee’s signature on the New Vendor form for M.W. Management, Ms. Stepic again took care and did not jump to the conclusion that Ms. Auckbaraullee had signed the document. She testified that although the signature says “Anissah,” she was “actually not sure” that it was the accused’s signature. Again, there is no doubt that the signature belonged to Ms. Auckbaraullee. Mr. Simone identified it as that of Ms. Auckbaraullee. In addition, he recalled discussing this particular form with Ms. Auckbaraullee after the fraud was discovered. Ms. Auckbaraullee insisted that the signature that appears just below hers belonged to him. Ms. Auckbaraullee obviously had no doubts about her own signature on the form, and was resolutely maintaining that Mr. Simone had signed it as well. Mr. Simone testified that he did not sign this form and that his signature had been forged.

Ms. Stepic’s Absence from Work on September 24, 2010, when the Cheque to H.G. Distributors was Printed

[548] Ms. Auckbaraullee told the ISN investigators that the invoice for $15,000 from H.G. Distributors came into her possession on September 24, 2010, as indicated by the “Received” stamp that she placed on it. The invoice was processed and the cheque printed that same day. Ms. Stepic could not possibly have delivered the invoice to Ms. Auckbaraullee, put it in her inbox, or done the cheque-run on September 24 because she did not go to work that day. She took the day off in order to attend her grandmother’s funeral. There is no evidence as to whether Peter Stepic was at work on September 24. However, he did not have the knowledge necessary to do a cheque-run.

[549] Somehow the cheque, which was not printed until 1:24 p.m. on Friday, September 24, was in the hands of someone connected to H.G. Distributors by Monday, September 27, when it was deposited at a bank in Mississauga. The cheque could not have been mailed or couriered because there was no address on it.

[550] The position of the Crown is that Ms. Auckbaraullee walked out of OHA with this cheque. Ms. Auckbaraullee’s position is that this may have been one of those times when a sticky note had been placed on the invoice with instructions to return it to someone in Education, or to send it to Reception to be picked up. In any event, it is clear that Ms. Stepic was not in a position to have put a sticky note on the invoice, or to have plucked this cheque from the pile of printed cheques and carried it out of the office, as she was not in the office that day.

[551] Given the circumstances, I am satisfied that Ms. Stepic had nothing to do with the creation or processing of the fraudulent invoice, the printing of this cheque, or its delivery to the purported vendor, H.G. Distributors.

Ms. Stepic’s Reaction to the Call from TD Bank re: the Cheque Issued to H.U.S. Services on September 29, 2010

[552] Sometime in early October 2010, TD Bank called OHA in relation to the cheque issued to H.U.S. Services. The call was forwarded to Ms. Stepic because she was covering for Ms. Auckbaraullee at the time. Ms. Stepic’s reaction to receiving this call is completely inconsistent with someone who knowingly had anything to do with the issuance of this fraudulent cheque.

[553] Ms. Stepic’s first step was to try to find the back-up documents. Although she located the Account Listing for H.U.S. Services in SunSystems, which referred to the invoice as relating to a speaker for HealthAchieve, she could not find the invoice or any other back-up documents. She reported the matter to Doug Miller, who directed her to speak to Lina Pallatto. When Ms. Pallatto could not find any documents relating to this cheque, Ms. Stepic reported back to Mr. Miller, and left the matter with him.

[554] It is apparent from Ms. Auckbaraullee’s ISN interview that Ms. Stepic also contacted her in an attempt to track down the documentation regarding this cheque. Ms. Auckbaraullee told Mr. Perry that during the first week in October 2010, when she was at home and recovering from surgery on her hand, Ms. Stepic called and told her that the bank had called and wanted “a phone number or something.” Ms. Stepic told her that she could not find the phone number. Ms. Auckbaraullee told Ms. Stepic, “I wouldn’t know about it. It has to be somewhere there.” Ms. Auckbaraullee explained to Mr. Perry that because of the injury to her finger, she had not done any filing for a while, and that a lot of documents were sitting on top of the cabinet in her office.

[555] If Ms. Stepic had been responsible for or played any role in the issuance of the cheque to H.U.S Services, knowing that it was fraudulent, she could have easily deflected any further investigation into the matter by simply calling back the bank and advising that the cheque was legitimate. Instead, she exercised due diligence. She reported the bank’s inquiry and the lack of back-up documentation to her superior, followed through with his directions, and reported back to him. She also contacted Ms. Auckbaraullee to see if she could shed any light on the whereabouts of the missing documents.

[556] Ms. Stepic’s behavior is inconsistent with her having had any knowledge of the fraud.

Ms. Stepic’s Ties to the Education Department

[557] Ms. Auckbaraullee noted that all of the fraudulent invoices and cheques were related to HealthAchieve. She also noted that Ms. Stepic, as the Accounts Receivable clerk, worked more closely with the Education staff than did Ms. Auckbaraullee. Ms. Auckbaraullee submitted that given Ms. Stepic’s close association or more frequent contact with Education, she was more likely than Ms. Auckbaraullee to have been involved in creating the fraudulent cheques and back-up documents relating to that department.

[558] The difficulty with this submission is that it is highly unlikely that Ms. Stepic would have made the types of errors contained in the fraudulent cheques and supporting documents. When shown the cheques and documents during her testimony, Ms. Stepic unhesitatingly pointed out all the spelling errors, inaccuracies, deficiencies and omissions contained in them. She testified that had she been covering for Ms. Auckbaraullee as the Accounts Payable clerk, she would not have processed any of the fraudulent invoices, and would have brought the deficiencies to the attention of Mr. Simone.

[559] Ms. Stepic pointed out that the addresses on the cheques did not comply with Canada Post’s regulation that the province and postal code be written on the same line. There were numerous spelling errors, such as the word “Unite,” rather than “Unit,” which was contained in the address for Sarnia H. Improvement. There were periods missing after the initials in the names of the vendors. The city of Bradford was misspelled as “Bardford” on the cheque to JN Distributors.

[560] Ms. Stepic found the absence of an address on some of the cheques was strange, particularly in the case of the September 24, 2010 cheque to H. G. Distributors, since the invoice contained a Calgary address. She noted that it was unusual for an invoice not to be numbered. HealthAchieve was misspelled in two places, and the Metro Toronto Convention Centre was referred to as “MTTC” instead of “MTCC.” Since the invoice did not describe the services to be rendered, but referred to an “amended agreement,” that agreement ought to have been attached.

[561] Ms. Stepic also pointed out instances where the Initiative and Account codes for the Education Department were written in the wrong boxes of the Accounts Payable stamp. The code for the Education Department was written in the wrong place on at least one occasion. Ms. Stepic was aware of these codes and where they should have been entered. If she created the fraudulent invoices, it is unlikely that she would have made these obvious errors which, in the normal course of events, would have raised questions by the person processing the cheques, i.e. Ms. Auckbaraullee. The last thing that Ms. Stepic would have wanted to do would have been to draw special or extra attention to the fraudulent documents.

[562] Another obvious defect in the fraudulent invoices and cheque requisitions was the omission of the HST or GST that was payable. The setting out of the tax was regarded as essential before an invoice could be approved for payment because, as Ms. Cho explained, OHA was a non-profit organization and could therefore claim part or all of the tax as a credit. Ms. Wai testified that when an invoice omitted the amount of tax owing, she returned it to the vendor and asked them to resubmit it.

[563] Ms. Stepic testified that she would not have processed any invoice that did not itemize the amount of tax owing. Presumably, she expected that Ms. Auckbaraullee would do the same. It therefore makes no sense that Ms. Stepic would submit to Accounts Payable such obviously flawed paperwork, which she could be fairly certain would catch Ms. Auckbaraullee’s attention and potentially lead to exposure of the fraud or, at the very least, a refusal to issue a cheque.

[564] In summary, the fact that Ms. Stepic was able to indicate all the inaccuracies, deficiencies, and omissions with respect to the back-up documents in relation to the fraudulent cheques militates against the possibility that she had any role in creating those documents. She knew what was required before an invoice could be processed and a cheque printed. Logic dictates that she would have prepared the documents so that they would be processed smoothly and would not raise questions or draw the attention of either Ms. Auckbaraullee or Mr. Simone.

[565] Ms. Auckbaraullee submitted that the fact that all the fraudulent invoices and cheques related to HealthAchieve casts suspicion not only on Ms. Stepic but on members of the Education staff. Again, the question arises as to whether a staff member in that department who was attempting to perpetrate this fraud would have made the obvious errors and omissions contained in those documents, thereby increasing the risk of exposure of the fraud, or the refusal of Accounts Payable to issue a cheque.

[566] I note in particular the omission of the tax payable, as well as the errors in the codes and placement of the codes in the boxes of the Accounts Payable stamp. Certainly Ms. Wai, who was meticulous in her record keeping, would not have made such mistakes. Nor would Ms. Mahoobani, who was trained by Ms. Wai in the use of the codes and in preparing invoices for submission to Accounts Payable. They relied on the annual coding list provided by Ms. Cho. Michael White also relied on that list, which was provided to all administrative assistants and managers for ease of reference when processing invoices.

[567] Ms. Cho testified that she trained the personnel in different departments on the use of the codes. She distributed the chart or list of codes to every administrative assistant in every department. She testified that all staff members in Education would have known the Account Number for that department, as well as the codes for deferred expenses, deferred revenue, and the Activity or Initiative code.

[568] It is noteworthy that the one person who did tend to make mistakes in paperwork associated with processing invoices was Ms. Auckbaraullee. Mr. Simone testified that her errors in inputting information, addresses, and codes had been the subject of discussion during her performance reviews. I note that Ms. Auckbaraullee used the wrong code for the Education Department when filling out the New Vendor form for Elite Distributors, entering the letters “EDU” instead of “EDUC.”

The New Vendor Forms and John Simone’s Forged Signature

[569] During her submissions, Ms. Auckbaraullee observed that Ms. Stepic knew how to create New Vendor forms, such as the ones that were used as back-up documents for three of the fraudulent cheques; namely, the June 29, 2010 cheque to Elite Distributors; the September 29, 2010 cheque to H.U.S. Services; and the October 20, 2010 cheque to M.W. Management.

[570] Ms. Stepic acknowledged that she probably filled out New Vendor forms when covering for Ms. Auckbaraullee. However, for the reasons already stated, there can be no doubt that Ms. Auckbaraullee created the three New Vendor forms listed above. Ms. Auckbaraullee told Mr. Perry that she filled out the forms, and explicitly identified her own signature on two of them.

[571] For the reasons that follow, I am also satisfied that Mr. Simone’s signature was forged on all three forms.

New Vendor Form for Elite Distributors, dated June 29, 2010: Exhibit 4(3)(b)

[572] During her ISN interview, Ms. Auckbaraullee identified her own signature at the bottom of the Elite Distributors’ New Vendor form. The Reference Audit Report also identifies her as having created this form.

[573] During her interview, Ms. Auckbaraullee identified the signature below hers as that of Mr. Simone. Mr. Simone initially testified that it did not look like his signature. He later stated that it resembled his signature, but noted that his signature at the time was very easy to copy. It was for that reason that he later changed it. He testified that he would never have signed this form if an invoice had not been attached to it.

[574] No invoice from Elite Distributors was ever located, despite a thorough search of OHA’s records by Mr. Simone and Mr. Miller. Ms. Wai, who kept a copy of every invoice that she submitted to Accounts Payable, had no record of any invoice from Elite Distributors. Neither she nor Mr. Simone recognized the name of that business as one of the HealthAchieve vendors.

[575] Although the Account Listing for Elite Distributors referred to an invoice, there was no invoice number attached to it. Ms. Stepic testified that it was unusual for the Account Listing not to include the invoice number or, in the alternative, the date of the cheque requisition.

[576] It may be inferred from all of the circumstances that Mr. Simone never saw an invoice from Elite Distributors because there never was one. In the absence of an invoice, he would not have signed this New Vendor form. I am satisfied that his signature on the form was forged.

New Vendor Form for H.U.S. Services, created on September 29, 2010: Exhibit 4(6)(c)

[577] During her interview, Ms. Auckbaraullee explained how she filled out all the hand-written entries on the New Vendor form for H.U.S. Services, and identified her signature at the bottom of the form. She also identified the signature below hers as that of Mr. Simone. Mr. Simone testified that this was definitely not his signature.

[578] The Reference Audit Report indicates that Ms. Auckbaraullee created this form on September 29, 2010. The cheque issued to H.U.S. Services for $13,750.00 was printed at 11:30 a.m. that same day. Ms. Stepic testified that this timing was “unusual.” She explained that given how busy Mr. Simone was, it would be unusual for him to approve a New Vendor form “right away.” Mr. Simone confirmed in his testimony that he took his time in reviewing the forms. He also testified that New Vendor forms were not always presented to him for review on the same day that they were completed.

[579] Mr. Simone noted several deficiencies in the invoice that make it unlikely that he would have approved and signed the New Vendor form for H.U.S. Services. For example, the alleged signature of Mr. DiClemente was not in the appropriate box in the Accounts Payable stamp. The second signature appears to be that of Carissa Martin, but the appropriate person to authorize invoices relating to speakers at HealthAchieve was Lina Pallatto. It was also unusual to have the same speaker speak at two sessions during the conference. There should have been a contract or memorandum of understanding attached to the invoice for this type of service. In addition, the Account and Initiative codes were written in the wrong spaces.

[580] I accept Mr. Simone’s evidence that the signature below that of Ms. Auckbaraullee on the New Vendor form for H.U.S. Services was not his signature, and that it was forged. I am also satisfied that Ms. Auckbaraullee authored and signed this New Vendor form.

New Vendor Form for M.W. Management, dated October 19, 2010: Exhibit 4(8)(f)

[581] The New Vendor form for M.W. Management was filled out by hand and appears to have been signed by Ms. Auckbaraullee. Ms. Auckbaraullee told Mr. Perry that filling out New Vendor forms was her responsibility. Both Mr. Simone and Mr. Miller identified her signature at the bottom of the page.

[582] Mr. Simone testified that the illegible signature below Ms. Auckbaraullee’s signature is neither his nor Mr. Miller’s. Mr. Miller testified to a similar effect: the signature in question did not belong to him or Mr. Simone. Mr. Miller and Mr. Simone were the only individuals who were authorized to approve a New Vendor form.

[583] Mr. Simone noted that the form is dated October 19, 2010, and that the cheque was printed on October 20, 2010. He was not in the office on October 20. Thus, he would have had to sign the form on the same day that it was completed, which would be unusual, given the time that he normally took to approve these forms. He also testified that he often did not receive the forms on the same day that they were completed.

[584] Mr. Miller recalled that when Ms. Auckbaraullee was first asked to retrieve the back-up documents for the M.W. Management cheque, it took her two hours before she produced the cheque