Kickbacks for health benefits billed to multinational industrial company Atlas Copco Canada Inc. are at the centre of a criminal trial underway in Sudbury, Ont., that’s being billed as one of the largest frauds in northern Ontario history.
The case, R. v. Plate, which is before the Ontario Superior Court of Justice in Sudbury, alleges the company’s former general manager Dirk Plate, benefits broker Paul Caron and two others — including the company’s director of human resources — planned and developed a scheme to defraud Atlas Copco more than a decade ago. Plate allegedly received kickbacks through Caron, a Montreal-based insurance broker, and his company.
The alleged loss arising from the scheme is approximately $20 million, according to Justice Patricia Hennessy’s recent ruling on whether to try Plate and Caron separately. The Crown delivered its opening statement in the trial this week. Plate and Caron are facing charges of fraud and theft, according to Hennessy’s ruling on the severance application last month. None of the allegations have been proven in court.
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The Crown alleges four individuals were involved in the scheme, in which inflated or false invoices were paid to Caron’s insurance company. The alleged participants include three senior employees of Atlas Copco who had the authority to pay the invoices and approve the expenses. According to previous civil litigation in the case, the company has alleged Plate wanted a better pension and that, as a result of his dissatisfaction, he turned to the fraudulent scheme involving false insurance invoices.
According to coverage of the trial in the Sudbury Star this week, a forensic accountant who pored over the benefits claims found wide discrepancies in amounts billed to the company’s benefits insurer and what it actually paid to its broker. In 2006, for example, the accountant found the insurance company was billed $2.4 million in benefits claims but Caron’s numbered company charged Atlas Copco almost $10.9 million, the Star reported.
The Crown also alleges that David Hillier, the business controller at Atlas Copco, has admitted his role in the kickback scheme, according to Hennessy’s ruling in March. Leo Caron (no relation to Paul), the director of human resources, has also admitted his part in the scheme as part of a plea to similar charges, Hennessy’s ruling noted. (In 2013, Leo pleaded guilty to charges of fraud and theft over $5,000 and was sentenced to 54 months in prison.)
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