Ex-staffer charged in $1.1-million bank fraud

A former employee at a Royal Bank branch in Hinton has been charged with stealing $1.1 million through a sophisticated scheme that included creating accounts for fictitious clients, then securing loans for them and acquiring credit cards in their names.

Once nominated for a customer-service award by the chamber of commerce in Hinton, Michelle Sparrow faces three counts of fraud over $5,000 and one count of theft over $5,000 as a result of a lengthy investigation by the Edmonton RCMP’s commercial crime unit.

The RCMP began its probe in 2008 after being contacted by RBC’s corporate security division in Toronto. “It is a substantial allegation,” Sgt. Garth Jesperson of the RCMP’s commercial crimes section in Edmonton said Friday.

Sparrow, who is 42 and lives in Leduc, is scheduled to make her first appearance in Hinton Provincial Court on April 3. She was charged Feb. 28.

Police allege that from 2001 to 2007, Sparrow drew funds from 75 accounts she established for fictitious customers, and also misappropriated money from two existing clients. Two of the three fraud charges involve funds that belonged to the bank, Jesperson said. RBC conducted an internal audit before turning the information over to the RCMP, Jesperson said. He commended banking officials for deciding to pursue the case.

In similar situations, companies sometimes opt to simply terminate an employee rather than to subject themselves to potential embarrassment. “These guys wanted to send a message,” Jesperson said. “There is an element of trust when someone works for a bank.”

Jo-Ann Fraser, senior manager of public affairs and corporate communications for RBC Alberta and the Territories, said RBC has no tolerance for inappropriate behaviour and conduct by an employee.

She said the bank acts “quickly, do our best to minimize any impact and take all actions available to us under the law.”