First Nation sues its own health corporation over alleged financial misdeeds

A Manitoba First Nation claims in a new lawsuit it has been cut off from federal health dollars after officials at its own health corporation allegedly stole and concealed public money.

Dakota Plains First Nation filed its statement of claim in Court of King’s Bench last week, naming Dakota Plains Health Authority Corp. and eight of its directors as defendants, accusing them of misappropriating money.

“(Dakota Plains) says, and the facts are, that the director defendants used their position, and the oversight responsibilities entrusted to them, to exploit (Dakota Plains) as a result of their vulnerability to people in their position,” reads the court filing.

The health authority, a non-profit set up in 2021, was meant to oversee the First Nation’s health department and provide health services to members of Dakota Plains, including by receiving and managing funds from the federal government, the court filing says.

The authority was also tasked with conducted audits annually and filing relevant documents with the Canada Revenue Agency to ensure it was in compliance with regulations.

But in March, the federal government and CRA officials informed Dakota Plains leadership that the health authority’s directors had failed to document and report how the federal money they received was spent, the court papers claim.

The statement of claim also alleges federal and tax officials had advised Dakota Plains that the directors claimed more than $12,500 in ineligible expenses and failed to remit about $122,000 in deductions.

The court filing says that the federal government has advised Dakota Plains that it is not eligible to receive additional health-care money until issues allegedly caused by the directors have been rectified.

Dakota Plains then retained consultants to review the health authority, the court papers say.

The consultants determined the directors “had removed and/or misappropriated funds from the (authority’s) bank accounts for their own personal use” and “conspired together to cover up the misappropriation of the funds,” the lawsuit claims.

The consultants also found the health authority had failed to provide the federal government, tax officials and band leadership with audits and an accounting of the funds it received, it says.

The lawsuit claims the directors conspired together in an “unlawful scheme” to “unlawfully extract” or misappropriate funds from the health authority, causing losses and damage.

Chief Donald Smoke, leader of the community southwest of Portage la Prairie, said the lawsuit aims to address how “a significant amount of money” was spent by the authority.

“We need the documents and tax filings to show the expenses. We are currently being pressed by the Canada Revenue Agency for the financial records,” Smoke said in a statement provided by the community’s lawyers.

“This was a community health agency and we hope the courts will ensure the directors and former directors are held accountable.”

The First Nation is seeking at least $500,000 in damages and a court order requiring the defendants to account for and trace money the court filing claims was fraudulently withdrawn from the corporation’s bank accounts.

None of the defendants have responded to the claim in court.

erik.pindera@freepress.mb.ca