Coventry TransportationCoventry Transportation
The Weather Network
Oct. 27, 2020 | Tuesday
Local News
Hydro worker fired after $250K fraud discovered
NOTL Hydro headquarters. (Richard Harley/Niagara Now)

A longtime employee of Niagara-on-the-Lake Hydro has been fired after admitting to setting up a fake invoicing scheme and defrauding the utility of more than $250,000, The Lake Report has learned.

The former staff member, a senior manager, has promised to pay back the money, NOTL Hydro president Tim Curtis said in an interview.

The manager had repaid 30 per cent of the stolen money as of Tuesday. The exact total of how much was stolen has not been revealed,

In the meantime, hydro has turned the case over to the Niagara Regional Police to pursue possible criminal charges, whether all the money is returned or not.

On the advice of lawyers retained by the utility, Curtis said he could not release the name or personal details of the former employee.

The scheme involved phony invoices issued and paid over an 18-month period, he said.

The fraud "was accomplished by the creation of a false contract and the approval of subsequent false invoices," Curtis said in a statement to The Lake Report.

"NOTL Hydro is working with the former employee to obtain restitution of all the funds," he said, adding hydro is confident all the money will be recovered.

In the event it is not repaid, hydro has insurance that could cover any outstanding amount.

Meanwhile, "there will be no impact on rates nor is NOTL Hydro in any financial danger," he said.

The fraud was discovered by a co-worker in the finance department who was processing a payment.

After the co-worker brought the discrepancy to the attention of senior management, the utility began an internal investigation and subsequently hired a Toronto forensic accounting firm to look into the case.

Only two business days elapsed between the discovery of the fraud on a Thursday and the firing of the employee early last week.

"The board of NOTL Hydro was informed immediately after the fraud was discovered, legal counsel was obtained and a forensic investigator hired," Curtis said.

"Following the termination of the employee, staff and Niagara-on-the-Lake town council were immediately informed," he added.

NOTL Hydro is wholly owned by the municipality. Lord Mayor Betty Disero declined to comment on the fraud case, noting the hydro board decided all communication on the issue would be handled by Curtis.

Police are assisting with the recovery process and the Niagara force's fraud squad will be involved in the criminal investigation, Curtis said in an interview.

News of the fraud hit Curtis and the staff hard, he noted.

"We work hard here to create a team environment," he said. "When you have a staff that works well together and that provides the best service to our customers, to find out that somebody was doing something like this is, you take it personally."

The employees are still in a "bit of shock" over the incident, he added.

For now, the focus is on recovery of the funds, but looking ahead, hydro has already started a detailed review of its processes.

So far it has determined there were no other fraud-related incidents, Curtis said.

But internal processes will be tightened to "make sure something like this can never happen again."

f4033d7793009a4053c4497d8eccc3d53dc2dca8:9ae474a5238dafdd25203fbf21da363fcfcea95a