Winnipeg Free Press - PRINT EDITION

RCMP probe travel scheme

Search targets native health centre boss

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OTTAWA -- The former president of the Virginia Fontaine Addictions Foundation used his position at the native treatment centre to create a fraudulent scheme involving false travel claims, the RCMP allege in court documents.

According to the information sworn by RCMP officers in order to obtain search warrants, RCMP commercial crime investigators believe Perry Fontaine was defrauding both Health Canada and the treatment centre by making inflated travel claims.

The documents, which were filed by the RCMP in support of their applications for authorization to conduct searches in 2001 and 2002 of a Winnipeg travel agency, a credit card company, bank and chartered accountants, outline the allegations the Mounties are making against Fontaine.

"I believe that Mr. Fontaine used his position within the Virginia Fontaine Addictions Foundation (VFAF) to further his own financial well-being," RCMP Cst. Ian McPherson swears in one information document.

"I believe the evidence I have thus far uncovered indicates that there are compelling grounds to believe that Mr. Fontaine committed a fraud by submitting inflated travel claims to Health Canada for reimbursement and reasonable grounds to believe a similar fraud has been committed against the VFAF."

Fontaine has not been charged by the RCMP and is innocent of all allegations unless proven guilty.

However, the Mounties have served notice that further charges are expected as part of a massive probe into suspicious spending involving the VFAF. The probe, which spans Manitoba, Ontario and Quebec, has been under way for two-and-one-half years.

On Tuesday, the RCMP laid the first charges from their investigation against Paul Francis Cochrane, the former Health Canada assistant deputy minister who oversaw all native health spending at the VFAF.

Cochrane, a 56-year-old resident of Ottawa, is facing seven counts of fraud against the government and one count of breach of trust.

Included in the bribe-related charges laid against Cochrane were some that the RCMP allege involved payoffs from Fontaine of $50,000 cash, an SUV, season tickets for Ottawa Senators games and free travel for Cochrane and his family.

The fraud allegations the RCMP are making against Fontaine are based on expense claims he filed for travel as part of his offical duties at the VFAF.

The RCMP were able to uncover duplicate tickets for his flights, one of which was handwritten and included a significantly higher amount than the computer-generated ticket, the documents say. The RCMP claim the difference in cost in the three duplicate sets of tickets was $3,479.64. Fontaine, the RCMP allege, was submitting the higher-priced tickets as part of his expense claims, which Health Canada reimbursed. His credit card records show he was never charged for the higher-priced handwritten tickets.

The RCMP also allege that Fontaine used a similar arrangement to purchase airline tickets with his own credit card to inflate the personal expense claims of another treatment centre executive. The difference between the real cost of the tickets and the false handwritten tickets was $3,494.08. There is nothing in the court documents filed by the RCMP to suggest the other executive played any role in the alleged crime. The documents claim the VFAF "may have been a victim of fraudulent claims" perpetrated by Fontaine under the other executive's name.

A key part of Fontaine's fraud plan, the RCMP allege, is a relationship he had with Kayla Dawson, a travel agent at Carlson Wagonlit Travel on St. Mary Avenue who handled all of his travel arrangements.

The court documents allege that Dawson admitted to RCMP under questioning that she had received a $19,000 personal loan from Fontaine.

"Mr. Fontaine accomplished this (furthering his own financial well-being) by exerting pressure on travel consultant Kayla Dawson to issue false airline tickets that were never intended to be used for travel purposes," McPherson swears in the court documents.

"It is my belief that the personal loan given to Ms. Dawson by Mr. Fontaine influenced her in agreeing to issue these false tickets."

The charges against Cochrane and the RCMP probe of Fontaine come nearly three years after a Caribbean cruise involving himself and 70 treatment centre staff touched off an accountability scandal that made front-page news across the country. The outcry over the taxpayer-funded cruise was followed by more revelations of suspicious spending involving the delivery of native health care on Manitoba reserves. When the matter first became public in October 2000, then-health minister Allan Rock cut off funding to the treatment centre and ordered a forensic audit that sparked a lengthy court battle as the centre fought an order to release documents.

Republished from the Winnipeg Free Press print edition July 5, 2003 $sourceSection$sourcePage

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