Profession Provincial

CPA Fraud Blotter: Robbing Peter to pay Paul's iPads?

A roundup of recent fraud cases involving Canadian accountants

Author: Canadian Accountant

TORONTO, April 26, 2019 – Two fraud cases involving former chartered professional accountants came to a close in the month of April. Both cases involved discipline hearings at the Chartered Professional Accountants of Ontario (CPA Ontario) and illustrated the dangers that occur when CPAs abuse the trust of organizations to channel funds into private ventures.

Barton Burron, the former volunteer treasurer of the Saint Luke Lutheran Church in Ottawa, Ont., was found guilty of fraud by Ontario Court Justice Matthew Webber, for siphoning $607,725.13 of the Church’s money into a real-estate venture that collapsed in 2013. Burron is a former chartered accountant and member of CPA Ontario who worked in the Office of the Auditor General of Canada. 

According to CPA Ontario’s discipline hearing, conducted in 2016, Burron had signing authority to act in a fiduciary capacity on behalf of the church, through a document he prepared himself. In 2009, the church was in good shape financially, with a legacy fund of $600,000, which Burron began moving from investment accounts into numbered companies. 

As reported by the Ottawa Citizen, Burron poured the money into real estate that he had purchased three years earlier, intending to build townhouses, then a condominium project and, later, to build an embassy for either Qatar or Syria. The projects never panned out and, when the money dwindled, Burron “arranged to have some church investments converted to cash and transferred to his development firm.” 

At the CPA Ontario hearing, Burron was not represented by counsel and did not attend, having resigned his membership in CPA Ontario in 2014, prior to the hearing. Under provincial legislation, however, members are subject to continuing jurisdiction for conduct as a member. 

The hearing was attended, however, by an interested party—the church’s pastor, who was sworn in as a witness, and described the circumstances and emotional impact on the congregation. The pastor intends to make a victim impact statement at Burron’s sentencing hearing, which has yet to be announced. 

For his part, Burron testified that he believed he was authorized to invest the church’s money and he did not behave dishonestly. While Burron was found guilty of fraud by Ontario Court Justice Matthew Webber, the former CPA was acquitted on charges that he possessed criminal proceeds and falsified documents to advance a fraud. CPA Ontario’s tribunal determined that Burron had taken advantage of his position as treasurer, misappropriated the church’s funds and devalued the profession as a whole. It imposed a fine, sought legal costs and banned Burron from membership for at least five years. 

Former CPA was iPadding accounts

Canadian accountant Nadia Minetto (a.k.a. Nadia Arsenault), a former certified general accountant and member of CPA Ontario, was working for a Mississauga software company called Wescom Solutions, when she started using corporate credit cards in a multi-million dollar scheme to sell Apple iPads and iPhones. 

According to Wescom v. Minetto, 2017, Minetto began an ongoing and escalating series of frauds using the company’s cards from 2009 to 2014. At first, she used a corporate credit card for purchasing personal goods and services; in 2011, she began purchasing Apple products and selling them on Kijiji. By 2014, court documents alleged that Minetto had purchased over 10,000 iPhones and iPads worth more than $6 million and sold them in cash transactions to Gabriel Fung, an electronics retailer. They would meet in Yorkdale Mall and Ikea parking lots where Fund would hand over cash wrapped in elastic bands. 

In 2014, Wescom was thinking of going public and hired consultant Kristine Percy, CPA, CGA, to scour the books. The company had over 600 employees and had issued 180 corporate credit cards. Percy, now the senior director of finance at Wescom, was “surprised” to learn Minetto had conducted the fraud without detection for five years. 

The National Post, which erroneously refers to Kristine “Pacy,” speculates that a “gentle settlement” agreement of repayment was reached to avoid public spectacle, perhaps at a time of public offering. Whatever the reason, Minetto’s discipline hearing notice from CPA Ontario refers to Wescom as “ABC Co.” In 2015, however, in the case of Wescom v Minetto, Justice J. Emery found Minetto had breached the agreement’s conditions in several surprising ways, allowing Wescom to seize Minetto’s house. 

By 2017, Wescom had shifted to pursuing Fung for the missing funds , and Justice Emery awarded Wescom both a judgment against Fung, and awarded Fung a cross claim against Minetto. Fung appealed the judgment and, on April 1st, in the case of  Wescom Solutions Inc. v. Minetto, the Court of Appeal for Ontario upheld the original judgment. 

Like Barton Burron, Nadia Minetto was not represented by counsel and did not attend her hearing of professional misconduct by CPA Ontario, in 2016. Percy was affirmed as a witness and her testimony describes a workplace where finance employees were junior to Minetto and had no access to her records. As in the case of Burron, CPA Ontario said the conduct amounted to “moral turpitude;” it revoked membership and ordered repayment of the costs of the investigation and prosecution. 

CPA Ontario discipline case decisions are available on its website, They are listed alphabetically and by rule of professional conduct but not chronologically. 

By Canadian Accountant staff.

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