Money ‘taken from our children’: Sandy Bay CFS accuses former executive director of fraud

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This article was published 18/09/2024 (355 days ago), so information in it may no longer be current.

Sandy Bay Child and Family Services is suing its former executive director, accusing him of pilfering millions of dollars meant to help vulnerable children and families as the agency works to regain trust in the community.

The lawsuit names Richard De La Ronde, former executive director of the organization for 15 years; a corporation he ran, Radka Inc.; Timothy Catcheway, a former director on the agency’s board; and a corporation Catcheway and De La Ronde ran, Shawendasaawin Inc., as defendants.

The statement of claim was filed Tuesday in the Court of King’s Bench by lawyers Jamie Alyce Jurczak and Mark Alward of firm Taylor McCaffrey LLP on behalf of the child welfare agency.

The CFS agency’s claim accuses De La Ronde and the other defendants of fraud, negligent misrepresentation, breach of fiduciary duty and breach of contract.

The agency alleges it has uncovered losses and damages tied to the defendants of approximately $10.6 million to date. It’s seeking repayment of that sum, plus special, punitive and aggravated damages to be determined at trial.

“These are really serious allegations, this is money that was taken from our children, and money that could have benefited our children in many different areas,” said Sandy Bay Child and Family Services executive director Sharon Desmarais, who was appointed last September.

“This was child tax money that could have went towards providing more services to our children and they went without because of this.”

The lawsuit said the agency fired De La Ronde in 2021 because he approved multiple purchases without supporting documents and was suspected of fraud. He began working at the agency in 2006.

The CFS agency was placed under administration by the Southern First Nations Network of Care in 2021, which ordered a forensic audit that uncovered the extent of the alleged fraud. The network stopped administering Sandy Bay CFS in 2023 and the agency brought on a new executive director and board of directors.

None of the defendants have responded to the lawsuit with statements of defence.

The CFS agency provides child welfare and other services to members of Sandy Bay Ojibway First Nation, which is about 177 kilometres northwest of Winnipeg on the west shore of Lake Manitoba, on and off reserve. The agency has 365 kids in care and 540 open files, while prevention files are not tracked.

Desmarais said the agency is working to regain trust in Sandy Bay, including by developing and delivering new programming, being transparent and by launching the civil court action.

“Definitely, we’ve lost the community’s trust and there’s a lot of talk in the community — very negative talk against the agency because of the fact this took place,” she said.

“The leadership of the day brought him in to help the community get to a better place, and that didn’t happen. So, of course, the community is still angry about all this. We hear about it today even.”

Desmarais said the agency had not been providing preventative services, such as parenting and anger management courses, and was only reacting to child welfare issues when they cropped up.

She said Sandy Bay CFS has since hired new workers — around 70 now compared to about 60 when she came on board — to develop preventative programming and work with kids and families.

The new executive director said the agency has the support of the First Nation’s leadership, with whom they’re working closely. The chief announced the filing of the lawsuit to community members Wednesday.

The claim alleges De La Ronde directly or indirectly caused the agency to pay more than $718,000 to a company his wife had an interest in that was incorporated in 2011.

Shawendasaawin, incorporated in 2015, allegedly received $170,395 from the agency.

The lawsuit also claims he incorporated Radka in 2017 to purchase properties in Portage la Prairie, Winnipeg and in rural areas that he then leased back to the agency for more than $6 million.

De La Ronde is also accused of entering vehicle-lease agreements between 2018 and 2021 exceeding market values by more than $345,000 and buying snowmobiles for $77,000 in 2017 that the agency never used.

The claim alleges he transferred a property owned by the agency to Radka for $1 in 2017, before selling it for profit and keeping the cash.

De La Ronde, the lawsuit alleges, was fraudulently reimbursed by the agency for credit card charges worth more than $1 million between 2014 and 2021.

The agency said Wednesday it is severing leases with De La Ronde and his companies. It has relocated from the properties he owned that it was operating from.

The lawsuit also seeks a court declaration for money wrongly obtained be held in trust, a declaration the agency is entitled to trace the money into financial institutions and assets owned by the defendants and an accounting of all profits.

erik.pindera@freepress.mb.ca