Vaughan to recoup fraud losses

Yorkregion.com
July 17, 2014
By Adam Martin-Robbins

City hall recouped most of the money it lost as a result of an alleged $2.4 million fraud scheme involving a former employee, The Citizen has learned.

City Manager Barbara Cribbett wrote in an e-mail that $2.2 million has been recovered “through insurance.”

That news comes less than a week after York Regional Police announced fraud charges have been laid against a 57-year-old Innisfil man, who worked as Vaughan’s supervisor of water, wastewater and drainage for 23 years, as well as three of his relatives and a family friend.

York fraud detectives began investigating after receiving reports from an internal city audit, revealing more than $2 million had been paid out to fictitious companies, according to a news release.

Police allege the supervisor created and approved fraudulent field purchase orders for services that were never rendered and the fictitious companies received payment from the city.

About 1,000 fraudulent field purchase orders were filed over a 13-year period, resulting in $2.4 million being paid out to those companies, according to police.

City officials are being tight-lipped about how something like this could go on for years without anyone noticing and reporting it.  

Cribbett directed that question to York Regional Police, saying it is part of an  ongoing investigation.

But a police spokesperson said the force is unable to comment.

“It would be speculative in nature as to why it was allowed to go on for so long,” Const. Andy Pattenden said. “I don’t know that that would even be part of our investigation because we would investigate what did happen, not speculate on what could have happened or what should have happened.”

Asked the same question, Mayor Maurizio Bevilacqua said:

“The positive aspect of this is that systems were put in place to actually identify these issues, but this is in front of the courts and I really can’t expand on that.”

Cribbett pointed out that, over the last four years, the city has taken steps to improve its processes and procedures, including redefining its internal audit function to make sure it operates efficiently; implementing a new procedure for controlling the purchase of low value goods and setting up an anonymous reporting system, which allows staff to report any concerns about suspected misconduct.

Benjamin Ciampichini, 57, of Innisfil is facing charges of fraud over $5,000, conspiracy to commit fraud and breach of trust by a public official.

Anna Ciampichini, Vittorio Ciampichini, Linda Ciampichini and Michele D’Agostino, meanwhile, have been charged with fraud over $5,000 and conspiracy to commit fraud.

They are to appear in a Newmarket court Sept. 17.