One of the province’s largest public sector unions has launched a $24 million lawsuit against three former senior employees and at least 15 individuals or businesses it alleges they had undeclared ties to, accusing them of a scheme including payments for bogus or unfinished work as well as kickbacks.
The statement of claim, which has not been proven in court, was filed Thursday by the Ontario Public Service Employees’ Union and comes amid its ongoing financial forensic audit and just two months after it filed a $6 million-plus case in Ontario’s Superior Court, also alleging financial irregularities.
Two of those named in the first case — former first vice-president/treasurer Eduardo Almeida and Maurice Gabay, former administrator of the union’s financial services division — are also named in Thursday’s lawsuit.
The third, Stephen Ward, held a number of positions with the union and became supervisor of operational services in 2018 until he was fired last December, the statement of claim says.
They could not immediately be reached for comment.
In a memo to members sent Thursday afternoon, president JP Hornick and first vice-president Laurie Nancekivell, said “because we have commenced legal action, we remain very limited in terms of what we can repeat or comment on publicly at this time. However, as was previously the case, pursuing our claims in a public forum, like a court of law, will shine a light on these issues and what we are doing to address them in a meaningful way.
“We know that these types of updates can be unsettling, but we believe it’s important that you — and all members — know what’s happening, so that we can continue to build trust and transparency across the organization.”
The statement of claim alleges the three “caused the union to engage and pay the vendor defendants a total of over approximately $30,000,000, while they held an ownership interest in and/or were otherwise connected to those vendors … they received payments, or ‘kickbacks’ from the vendor defendants, including as salaries and dividends … (and) took steps to conceal their conduct, including by circumventing the union’s purchasing and tendering policy, manipulating the estimates submitted as part of any tendering processes, manipulating invoices to fall within the $50,000 approval threshold to avoid the oversight” of the board.
The statement of claim also alleges “they caused the union to pay the vendor defendants for products and services that were not actually provided and/or to overpay for any products and services that were, including through significant mark ups and overcharges; and they caused the union to transfer vehicles, or pay for vehicles that were registered, to certain of the vendor defendants.”
The statement of claim alleges that “at no time did Almeida, Gabay and Ward disclose to the union their relationships with the vendor defendants and their clear conflict of interest” as required.
The vendor defendants are businesses located in Hamilton, Stoney Creek, Grimsby, Barrie and Toronto, the statement of claim says.
The union alleges “that Almeida, Gabay and Ward carried out their scheme with vendors of different products and services to the union, including construction, security, travel, marketing and union-branded merchandise.”
In the January lawsuit, OPSEU has alleged in its statement of claim that Almeida, Gabay, as well as former president Warren “Smokey” Thomas, withdrew monies from the strike fund without explanation, received unexplained compensation and had numerous union-purchased vehicles transferred to themselves and their families.
But Thomas has said the lawsuit launched by the new leaders of the 180,000-member union he headed for almost 15 years is politically motivated, according to his statement of defence and the $5.5 million counterclaim he has filed.
His statement of defence says the January lawsuit “culminates a long campaign by Mr. Thomas’ political rivals … to demean, politically destroy, and cause irreparable emotional and reputational harm to him and his associates. It has no basis in reality, and is entirely manufactured.”
The allegations in the January statement of claim and the statement of defence and counterclaim have also not been proven in court.
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