RCMP probing OPP union leaders

Investigation looks into fraud, theft from OPPA

In the summer of 2014, a stretch limousine arrived at the Ontario Provincial Police Association’s headquarters in Barrie, Ont., carrying two entrepreneurs: Noel Francis Chantiam, known to have a box at the Rogers Centre in Toronto where he hosted officials, and Klara Kozak, a budding travel marketer.

Andrew McKay, a prominent Toronto lawyer who specializes in representing police unions, introduced the pair to a triumvirate of officers who ran the provincial police union: Jim Christie, Karl Walsh and Martin Bain.

Chantiam pitched an idea, court documents allege. The union bosses listened.

“Francis talks fast and assumes we are as smart as he is,” Walsh later allegedly wrote in an email about the meeting.

It is then that a deal was forged to provide travel services for the association and its members, according to allegations made by the RCMP in documents filed in court.

But any alleged deal — and who might be profiting from it — would not become publicly known until concerned employees secretly told their view of things to the RCMP, and an Ontario Court judge unsealed the suspicions of federal investigators on Friday.

There are “reasonable grounds to believe,” the RCMP allege, that all of those involved at the meeting that day “acted together to commit criminal offences of fraud and theft against the OPPA.”

The travel deal, however, is only one startling allegation in the RCMP probe, with investigators saying it may have uncovered a pattern of both grand misappropriation — such as unusual condo purchases in the Bahamas and speculative investments in the Cayman Islands — as well as mundane office expenses and vacation time swindles.

Police have not made any arrests in the ongoing investigation or laid any charges and none of the allegations have been proven in court.

In a statement late Friday, the union’s acting president, Doug Lewis, said he was “saddened and shocked to learn of the allegations” and the association was fully co-operating with investigators. The law firm of Stikeman Elliott was hired to carry out an internal investigation.

While the public is only now learning of questions over the internal affairs of the union that represents about 6,200 uniformed officers and 3,600 civilian employees, things clearly didn’t look right to some police union insiders.

In fact, the RCMP’s interest was triggered by a handful of OPPA employees who grew suspicious of the overseas travel, investments and other expenses, and who took their concerns — and copies of internal emails they had preserved — to police.

That prompted a months-long investigation that included surveillance of key people and, last Friday, police searches at the OPPA headquarters, private homes and other offices.

At the heart of the investigation are Christie, the union president, Bain, vice-president, and Walsh, chief administrative officer. The three union officials are sworn officers with the OPP. Also under scrutiny are the lawyer McKay, who often represents police associations and officers accused of wrongdoing, and Kozak and Chantiam.

Last year, all employees of the OPP Association were, without explanation, instructed to use a new travel service provider, First Response Travel Group, which was formed in June 2014. Some OPPA officials complained the prices were inflated and their service inferior, the affidavit says.

Walsh directed employees to use the company for all travel needs, including the association’s golf tournament, annual general meeting and spring board meeting. First Response was also marketed to the association’s general membership to use for personal travel. Corporate documents list Kozak and Chantiam as the partners in First Response, listed as a division of Leximco Ltd., whose directors are Kozak and McKay.

However, internal emails uncovered by the union’s IT manager say Christie, Bain and Walsh also owned shares in First Response, the affidavit alleges.

“In order to hide their ownership in First Response, the shares belonging to Bain, Walsh and Christie were being held in trust by Kozak through an offshore investment scheme,” investigators allege.

One of the offshore investments was not discovered by the rest of the association’s board until office staff requested backup paperwork for a $20,000 charge to Walsh’s OPPA-issued credit card when it was time for the annual report to be prepared, the affidavit says.

Walsh explained it was a down payment on two condos in Nassau, Bahamas. One was valued at $1,563,000 and the other at $625,000. He said they were being bought as high-end vacation rental property investments for the OPPA, the document claims. The paperwork showed the condos had been bought in Walsh’s name with an address corresponding to McKay’s office, the affidavit says.

In August 2014, Walsh allegedly wired $100,015 of OPPA funds to the Cayman Islands to buy shares in New Providence Income Fund Inc. The investment was described as a “high-risk, high-yielding offshore investment that is not regulated in Canada and there is no guarantee that the principal invested will be returned.”