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Financial Guide 2018
In the final chapter of a long saga plaguing the Municipality of West Nipissing since the beginning of 2016, former WN Public Works Manager Luc Rifou pleaded guilty to one count of ‘uttering a forged document’ and one count of fraud on government (receiving a benefit from a person having dealings with the government for which he was serving as an employee). The pleas were entered in the Ontario Court of Justice in North Bay on Tuesday, April 24.
Rifou and then-Public Works Director Marc Gagnon had both been fired by the municipality in January 2016 after what town officials called ‘financial irregularities’ had been discovered. At the crux of the issue was the purchase of a Durapatcher machine from local contractor MX Constructors as well as work that was billed and paid but never completed by the same company, according to statements of claim issued by the town in their lawsuit against MX Constructors, filed around the same time Gagnon and Rifou were terminated.
In the Fall of the same year, criminal charges were brought against Gagnon, Rifou and MX Constructors owner Steve Morrison, who were co-accused of fraud, uttering forged documents and, in the case of the two town employees, breach of trust. In November 2017, Morrison pleaded guilty to fraud over $5,000 and uttering a forged document, and received a 6-month conditional sentence of house arrest after paying $75,000 in restitution. Gagnon pleaded guilty to uttering a forged document in February 2018, and was also placed on 6-months of house arrest after paying $25,000 in restitution.
Rifou was placed on 12-months of house arrest, the lengthier sentence explained by the fact that he did not pay any restitution. The penalty was recommended in a joint submission by Crown Attorney Russell Wood and Defense lawyer Richard Pharand, which was upheld by Superior Court Justice Gregory Ellies.
It was explained that Morrison had leased a Durapatcher machine for a period of 60 months, at a cost of $1,654 with a residual buyout of $10, to do roadwork for the municipality. In August of 2015, Gagnon, who was Rifou’s superior, recommended the town assume the lease and do the work itself, as a cost saving measure. The town entered into an agreement to make the 39 remaining lease payments. Then, in November 2015, MX Constructors submitted an invoice for $25,928.26 to complete the sale of the Durapatcher. The court heard that both Rifou and Gagnon “attempted to rush same day payment on the invoice,” however municipal treasurer Alisa Craddock denied the claim, saying the town had only agreed to take over the lease.
“On the suggestion of Gagnon, who advised Morrison that monies were available in the sidewalk budget, MX then submitted two bills to the municipality of $12,964.13 each for sidewalk work in Cache Bay and Sturgeon Falls (…), which sidewalk work was in fact not completed by MX. After both Rifou and Gagnon signed off on the bogus replacement invoices, they were duly paid by the municipality,” the court heard.
The Defense pointed out that Rifou’s signature was not a requirement, as he was only authorized to approve much lower expenditures, so the authorization in effect came from Gagnon. Crown attorney Russell Wood still insisted that Rifou had “the keys to the vault to some degree,” although admittedly not to the extent of Gagnon, and that he had “used that to benefit a friend of his, Mr. Morrison.”
Wood also conceded some mitigating factors, saying there was “no indication, other than a couple of sponsorships (…), that Mr. Rifou really gained himself financially”, and that he had entered a guilty plea, thus saving the court’s time and resources. The Defense and Crown also indicated that Rifou was already being penalized, having lost his employment and reputation in the community, with Wood stressing that WN is a small town where “everyone knows each other” and there was “no doubt a lot of chatter at the local Tim Hortons.”
Wood’s allusion to sponsorships relates to the second plea, with Rifou having acknowledged seeking support from Morrison for various fishing and hockey tournaments from 2012 to 2014. Provided as an example were text messages from June 2012 showing Rifou asking for an $800 sponsorship for a fishing tournament, to which Morrison agreed. The Crown suggested this could be construed as “commission for the Durapatcher” and that the sponsorship agreements were kept “secret.”
Before passing sentence, Justice Ellies gave Rifou an opportunity to address the court. “I just want to say that I’m thankful that my wife and kids stood by me through all this. It’s been very hard,” he expressed, saying he also wanted to apologize for putting them and the community through this ordeal. When the judge suggested he turn around and do just that, an emotional Rifou said if he turned around to face people, “then I’ll lose it.” He did however turn to face the courtroom, and made a brief, choked-up statement. “Thank you for sticking by me,” was all he could manage in a trembling voice.
The judge didn’t mince words in condemning the public officials’ actions, saying that governments at all levels are prone to becoming what he called a “kleptocracy,” where public servants use resources to their own benefit rather than in the public’s interest. “That’s what happened with you, Mr. Gagnon and Mr. Morrison,” he stated. “This sort of behaviour affects so many people,” he added, saying there is widespread public mistrust in governments as people often believe that tax dollars are misused and “in this case, they are right.”
In imposing the sentence, Justice Ellies said he had to consider deterrence so that others would not “engage in self serving behaviour,” but also weigh Rifou’s community involvement. “Balancing that is the fact that you did take care of the community at large,” he added.
Rifou will be house-bound for the full 12 months of his sentence, except to attend work, medical emergencies, legal and medical appointments and 4-hours per week to do his shopping. He must report to a supervisor as requested and cannot consume alcohol or any other drugs for the same period. No victim fine surcharge was imposed.
Present in the courtroom were West Nipissing CAO Jay Barbeau and treasurer Alisa Craddock. Barbeau issued a brief statement in response to the Tribune’s request for comment. “The Municipality is satisfied with the outcome of the criminal proceedings in the sense that the three accused have admitted guilt before the court which provides clear evidence that our actions were with merit. As a result, the three involved will now have a criminal record due to their actions, which will have ongoing consequences for them in the future. As a municipal official, I take no satisfaction in that aspect. Staff’s role in this matter has been and will continue to ensure that the integrity of our processes is upheld,” he declared.
Luc Rifou did not wish to make a comment. Barbeau also indicated that the former town employee recently dropped his civil lawsuit against the town for wrongful termination.