First Nation victim of $1-M fraud: police

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‘The people in the community are dis­appointed’ -- Chief Marcel Balfour (FREE PRESS ARCHIVES)

The couple lived a seemingly ordinary life as members of the Norway House First Nation community: Kimberly Apetagon worked as the band's payroll administrator and her husband Stephen worked as a maintenance man at the local community centre.

But unbeknown to their neighbours, they were the prime suspects in a massive million-dollar fraud that victimized the entire community, a case the RCMP said was one of the largest in the province's history.

The couple was arrested Wednesday at their Norway House home, charged with theft and fraud over $1 million after a year-long investigation by the RCMP.

"There were no signs," Chief Marcel Balfour said Thursday of the Apetagons' lifestyle. "There were no fancy cars or too many cars, no expensive trips. They don't have a big horking house or anything like that."

Balfour said Kimberly Apetagon had been the band's payroll administrator for about six years, earning about $36,000 annually. She was placed on an unpaid leave a year ago when the fraud came to light.

Stephen Apetagon earned about $22,000 annually as a community maintenance employee.

The missing money was first discovered by a Royal Bank official in Toronto, who alerted the band, Balfour said, adding the RCMP were brought in almost immediately.

"The people in the community are disappointed... feeling that one of us would steal from the community," Balfour said, adding he believes relations between the couple and their neighbours will be strained. "I feel betrayed."

Balfour said Kimberly Apetagon, 33, remains on unpaid leave pending the outcome of the criminal case. Her husband, Stephen, 35, no longer works for the band. "She hasn't been convicted, she's only been charged," Balfour said.

Kimberly Apetagon was reached at her home in Norway House by the Winnipeg Free Press Thursday afternoon but she refused to comment.

Staff Sgt. Reid Bingham, head of the RCMP's provincial commercial crime unit, said the fraud and theft were probably only surpassed by the Virginia Fontaine treatment centre fraud.

Bingham said the investigation concluded the fraud was not sophisticated, yet it proved lucrative to the couple over the five years they are accused of carrying it out, between April 2003 and November 2008.

"As the band's payroll clerk, she manipulated payroll data, inputted false data," Bingham said, without elaborating.

Balfour said he didn't know what the RCMP uncovered but it's alleged that Apetagon issued paycheques to band members who used to be employees but were no longer employed and issued cheques in the names of individuals who used to work for the band but who had died.

Bingham said the fake paycheques were deposited into a bank account held jointly by Apetagon and her husband, adding it's alleged that it was Stephen Apetagon who cashed the payroll cheques.

Balfour said key band programs weren't affected, but added that the band has always had a precarious financial situation and the fraud only made matters worse.

Balfour said the stolen money likely came from accounts designated for discretionary programming and from the band's VLT revenue.

Balfour said it was common knowledge in the community that the couple were suspects in the fraud, adding he had become frustrated with the length of the RCMP investigation.

"I'm finally pleased that someone has been charged," Balfour said.

Balfour said at the time of the fraud the band and council had no idea that money was being stolen.

Bingham said it's unlikely any measures can prevent the theft by a determined employee who is familiar with the checks and balances and can avoid detection for a long time.

Kimberly Apetagon is charged with fraud over $1 million, theft over $1 million, possessing property obtained by crime, money laundering, falsifying books and documents, and destroying books and documents.

Stephen Apetagon is charged with money laundering, theft, and possessing property obtained by crime.

The couple was released on a promise to appear Jan. 19 in Norway House provincial court.

aldo.santin@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 11, 2009 A5