Fraudster wants to ‘make good’
Cancer charity exec sentenced to jail for diverting $400,000 from foundation
Steven Sokolowski has paid back $400,000 he took from a charity that raises funds for children with cancer, but the entrepreneur was visibly shaken Wednesday when a judge sentenced him to 14 months in jail, rather than the house arrest he hoped for.
“It is not just (the charity) that has suffered from Mr. Sokolowski’s crime, but every child that might otherwise have been the beneficiary of the large sum of money diverted,” Ontario Court Justice Katrina Mulligan said in her sentencing decision.
The impact on charitable donors who will now be even more wary is also significant, she said.
“Every charity loses because of his actions,” Mulligan said, adding that this was a well-planned deception that relied on Sokolowski’s inside knowledge and position of trust in the charity, she said.
Sokolowski, 67, pleaded guilty to fraud over $5,000 in January.
He was one of the founders of Coast to Coast Against Cancer in 2002, a registered Toronto foundation that has raised tens of millions of dollars to support childhood cancer charities and hosts several cycling and other activities every year. The fraud began when he took on additional responsibilities for day-to-day operations as a director of the foundation.
Between January 2012 and August 2014, he took $400,000 from the charity by filing fraudulent invoices for services never provided or expenses for personal matters, Mulligan found. The fraud was uncovered through a routine audit.
In a separate, civil case before Superior Court Justice James Diamond in 2015, Sokolowski was ordered to repay about $700,000 to Coast to Coast. The judge in that case — which has no bearing on the criminal matter — found Sokolowski spent the money on girlfriends, expensive wine and hosting a gathering at the Royal Canadian Yacht Club, among other expenses.
One of those girlfriends was Philippa “Pip” Herrington. Diamond made no findings against her.
Herrington was charged criminally with fraud along with Sokolowski. Her charges were withdrawn once Sokolowski was sentenced. Diamond also ordered Sokolowski to pay $50,000 in punitive damages, and $150,000 in court costs.
As part of the criminal sentencing hearing, a lawyer for Coast to Coast filed a letter outlining Sokolowski’s “tremendous co-operation” so far in the collection of the civil judgment and his apparent recognition of the harm he has caused to the charity.
Mulligan said the $400,000 that was part of the criminal proceeding has been repaid following the sale of Sokolowski’s matrimonial home. His expensive wine collection was also auctioned off, court heard during a previous court appearance.
Crown attorney Michael Lockner sought a sentence of two years less a day in jail.
“I trusted him implicitly,” said foundation chair Jeff Rushton in a victim impact statement read by Lockner. “I never questioned his ethics or moral compass.”
Rushton said the foundation spent well over $400,000 in legal and accounting costs related to the fraud and recouping the funds, meaning there was less money available to be shared with charities.
“This is the perverse and sickening reality of what Sokolowski’s actions have meant to the brand and reputation of Coast to Coast Against Cancer Foundation,” Rushton said.
Sokolowski, who represented himself in the criminal matter, asked the court for a conditional sentence.
“I have to say, I feel like I’m fighting for my life here. This was a very difficult time for me,” Sokolowski said, at times getting emotional. “I was under financial distress, borrowing money from the foundation, putting it back. Then it crossed the line. At one point I wanted to be caught. I felt guilty.”
Sokolowski described the criminal charges as “a bit of a blessing,” because he stopped drinking and started making other improvements in his life. “It is a period of my life that I don’t even recognize myself,” he said. “I really, really want to make good.”
On the issue of deterrence, he said he and his partner Herrington “have been in a prison already,” given their bail conditions and the harassment he said they’ve faced since reports of the civil case involving Coast to Coast were published in 2015.
“That then sparked all the crazies coming out, all the stalkers,” he said. “Websites have gone up with crazy accusations, there have been threats, harassment, physical violence.”
A person allegedly involved with the harassment is now before the courts, Mulligan said.
Mulligan said Sokolowski’s remorse was genuine and applauded him liquidating his own assets to repay the funds.
She also noted that at the time the fraud took place Sokolowski said he was reeling from the deaths of his stepfather and his mother, the breakdown of his marriage, depression and chronic pain caused by sciatica resulting in self-medication through alcohol and prescription drugs.
“Unfortunately the death of parents, the breakup of a relationship and chronic pain are facts of life in almost every citizen’s existence at some point or another,” she said. “It appears he had the resources to . . . manage and cope with the stress.”
In addition to his jail sentence, Sokolowski faces 16 months of probation and was ordered to perform 100 hours of community service.