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Welfare fraud probed

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It's a conundrum for any government -- a money's-tight atmosphere alongside a growing problem of homelessness. So why in such difficult times does the provincial government seemingly turn a blind eye to the fraudulent activities of some Winnipeg landlords? That, says a longtime welfare fraud investigator, is exactly what's happening, and the bilking has been going on for years.

At one time, Lyle Moffatt worked fraud investigations as a Winnipeg cop. Later he worked with the federal government, putting a stop to millions of tax dollars being paid out for bogus reasons. In 2000, he took a position in the provincial welfare area.

His mandate was to ensure that applicants receiving benefits were entitled to them, and that guidelines regarding dependants, employment and housing were met. Moffatt's not some Johnny-come-lately. Well-known in policing circles, he and his partner were pivotal in establishing the fraud being perpetrated by the killers of five-year-old Phoenix Sinclair -- the girl's mother and boyfriend continued to collect welfare benefits after her death.

That assisted the RCMP in establishing the couple's guilt in the youngster's murder, a case that shocked the nation.

For years he's had concerns about the brassy nature of a few landlords that are licensed to provide accommodations to welfare clients and who collect in their names, but provide nothing in return.

As an investigator, he repeatedly pushed for something to be done about it but was thwarted by his higher-ups. Since retiring -- and as a taxpayer -- Moffatt has written to the bigwigs of his former department, detailing how the alleged scams are pulled off and noting that such activity is common knowledge up the management chain.

The frauds are elementary and for the most part similar. People need an address to get welfare and so a cagey landlord makes a deal with the client. The landlord sticks a room number on a closet door or an inhabitable basement. Some just pull a number out of thin air. In any event, the client continues living on the street (or if he's lucky, crashing at a buddy's) and collects the living portion of the welfare payment while the landlord collects rent for non-existent accommodation.

Some landlords have even collected while clients have been in jail for extended periods. That practice has mostly stopped though, thanks to increased communication between corrections officials and the welfare department.

Such scams are hardly new. Vancouver uncovered a bunch a few years ago. In one case, a landlord took the lion's share of government support, leaving the drug-addicted client on the street, muddling along with just enough cash for his next few fixes. In another, a landlord was collecting 43 cheques when only 33 clients resided in the building. Elsewhere, four clients were jammed into a single small room while tax dollars were used to pay the freight for four separate abodes.

Action was taken in Vancouver but so far this province has appeared reluctant to follow suit.

During his tenure, Moffatt guesses that hundreds of thousands of dollars have unjustly gone to wayward landlords while requests to upper management for direction or authorization to fully investigate these activities went "unanswered and (were) literally ignored." He does make note of one investigation that led to charges, but only because the prosecutions department was consulted before management.

Even then, with the suspect landlord under charge and facing prosecution, wrongdoing appeared to continue. Repeated requests for direction from his bosses went unanswered.

Charlene Paquin, acting assistant deputy minister for disability programs and employment and income assistance, says Moffatt's claims are now being taken seriously and a review that began about a month ago is continuing. Policies are being analyzed along with the specific reports the former investigator has submitted. Attempts to identify and plug the leaks will form part of the study and so, too, will be the allegations of a lack of direction and communication on those files concerning landlords.

The suggestion of neglect on the part of the provincial government is disappointing. The idea of straightforward fraud that lines the pockets of a few slum landlords to the detriment of those in need goes beyond disappointment. That kind of galling impunity can only reign when nobody cares.

Kelvin Goertzen, the Conservative justice critic, says he's quite disturbed by the length of time it's taken for these allegations to secure action. He also adds that fraud involving public monies requires a swift response and wonders about government policies in allowing such action to continue.

There is no firm timeline on the review, but landlords beware. Paquin stresses that fraud will not be tolerated and that those who choose to cheat may well find themselves facing criminal prosecution in the future.


Robert Marshall is a former Winnipeg police detective and security consultant.

Republished from the Winnipeg Free Press print edition July 10, 2010 h1

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