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Fontaine gets three years prison for fraud scheme

By: Mike McIntyre

Posted: 06/19/2009 2:35 PM | Comments: 0 (including replies)

Perry Fontaine (KEN GIGLIOTTI \ WINNIPEG FREE PRESS ARCHIVES)

Perry Fontaine enjoyed a lavish lifestyle that was filled with exotic trips, fancy cars and expensive jewelry. Now he is headed to a federal prison, a victim of his own greed which saw him orchestrate an elaborate fraud scheme that robbed taxpayers of several million dollars.
Fontaine, 56, left court in handcuffs Friday after being sentenced to three years in prison. Queen’s Bench Justice Perry Schulman rejected his bid for a more lenient penalty.
The former head of a Manitoba addictions treatment centre was also ordered to pay restitution of $2.36 million, which is the amount he personally received through the scam.
Fontaine admits he set up two phoney consulting firms that skimmed millions of dollars in program payments from Health Canada to the Virginia Fontaine Addictions Foundation — an organization named after his own mother. He pleaded guilty last September to charges of fraud and bribing a public official.
Fontaine engineered the fraud with two senior federal government employees: Paul Cochrane, an assistant deputy minister of health; and Patrick Nottingham, the ex-regional director of Health Canada’s First Nations and Inuit health programs in Manitoba.
Cochrane and Nottingham pleaded guilty in the fall of 2005. In exchange for testifying against Fontaine, Cochrane was given a one-year sentence and ordered to make $211,000 in restitution. Nottingham, who also agreed to testify against Fontaine, was given a conditional sentence of two years less a day and ordered to pay $1.14 million in restitution. Charges against the men’s wives were dropped as part of the plea.
Crown attorney Dale Harvey said Fontaine had convinced Cochrane and Nottingham to increase funding to the treatment centre over the course of several years. In exchange, Fontaine diverted centre funds to two consulting firms — one controlled by Nottingham and his wife, and another controlled by Fontaine. The centre paid the consulting firms on the pretext of providing services to the centre but in reality, the firms provided work of no value, Harvey said, and the money was paid to Nottingham and Fontaine, who also directed money back to Cochrane.
Harvey said that between 1991 and 2000, the centre received $97.5 million in funding from Ottawa and part of those funds were diverted to pay for luxury vehicles, homes, NHL hockey tickets and vacations for the three men and their families.
Harvey said the scheme began to unravel with a 2000 newspaper report of a Caribbean cruise taken by Fontaine and 70 centre staff, along with Cochrane. That resulted in Health Canada ordering a forensic audit, which took three years to complete.
Harvey said centre staff had described Fontaine as a manipulative bully, who threatened other board members to get his way.
The treatment centre was the largest employer at Sagkeeng First Nation with 100 workers when it closed amid the scandal. In addition to the criminal charges, Ottawa is suing Fontaine to recover more than $800,000 he paid himself in vacation and retirement settlements after he quit the facility. Luxury jewelry items seized from Fontaine’s former Père Oblat Drive condominium following his arrest in 2003 are to be auctioned off. The items include rings, bracelets, earrings and necklaces made of gold and diamonds. One 14-karat gold diamond ring had an appraised value of $14,000.

www.mikeoncrime.com

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