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June 16th, 2011, 05:08 AM
TTC manager charged with fraud
PATRICK WHITE AND ELIZABETH CHURCH
From Thursday's Globe and Mail
Published Wednesday, Jun. 15, 2011 10:51PM EDT
Last updated Wednesday, Jun. 15, 2011 10:53PM EDT
Toronto police have charged a TTC manager and his family in what is alleged to be the most serious case of internal fraud ever at the transit agency – an alleged kickback scheme that siphoned at least $149,000 from a swollen city paving contract.
Bruno Colavecchia, a TTC project manager who made over $100,000 in salary last year, is accused of collecting kickbacks from Sebastian Corbo, owner of IPAC Paving Limited, a company that signed an $860,000 TTC contract that later ballooned to $1.8-million.
The company is accused of billing the TTC $198,619.92 for work worth just $54,087.75, redirecting the surplus to Mr. Colavecchia, who was responsible for handling IPAC’s invoices to the TTC.
Both Mr. Colavecchia, and Mr. Corbo have been arrested and charged with fraud and related offences. Mr. Colavecchia has been dismissed from his TTC post.
Police have also charged Mr. Colavecchia’s wife and 21-year-old son, whom they accuse of collecting IPAC payments through bank accounts created for non-existent companies.
“The funds were going to [IPAC] and then being redistributed back to the co-accused through companies that were fictitiously created,” said Detective Constable Scott Devereaux, the investigating officer for Toronto Police Services. “At the TTC, we have not seen something of this scope before.”
The police allegations have yet to be proven in court.
The arrests have sent reverberations throughout the TTC and the rest of city hall, where IPAC has performed millions of dollars of work for multiple departments. The city is now investigating all its dealings with IPAC dating back 10 years.
The TTC has hired forensic accountants from PricewaterhouseCoopers to scrutinize IPAC contracts as it tries to recover the $149,020.62 in over-billed payments through civil courts.
TTC chair Karen Stintz said she was alerted to the allegations on Monday.
“This is one of the more serious cases, it could be the most serious case, but one of the more serious cases given the magnitude of what we have uncovered so far,” she said. “We are taking this very seriously.”
The investigation dates back to the summer of 2010. At the time, IPAC was completing work on a three-year $860,000 contract it signed in 2007 to maintain paved areas around subway stations, bus roadways, loops, yards, garages and car-houses.
That original $860,000 contract had swollen to $1.8-million by 2010 as various amendments and add-ons larded an extra $1-million onto the company’s workload, Mr. Ross said. A TTC employee who examined that work noticed some irregularities in IPAC’s invoicing between June, 2009 and July, 2010, and reported it to the agency’s special constables.
“Once they determined there was internal fraud, they approached us and we did the bank portion of the investigation,” Mr. Devereaux said. “Initially, we focused on this specific contract. We will now expand our investigation.”
Reached by phone, Mr. Corbo said he did not know the charges would be made public. “I can’t really say anything at this time,” he said. “I haven’t retained a lawyer yet.”
Mr. Corbo and Mr. Colavecchia have both been charged with fraud over $5,000, laundering proceeds of crime and two counts of conspiracy to commit an indictable offence.
They are scheduled to appear in court on July 28.
http://www.theglobeandmail.com/news/national/toronto/ttc-manager-charged-with-fraud/article2062821/
4 charged in TTC fraud probe
Published On Wed Jun 15 2011
Curtis Rush Police Reporter
A Toronto Transit Commission project manager, his wife and son are among four people charged in an alleged $150,000 fraud involving fake invoices and a secret commission for paving work at TTC bus stations.
The other person charged is the owner of IPAC Paving Ltd.
Between June 2009 and July 2010, IPAC billed the TTC close to $200,000 for work that amounted to about $50,000, police said.
IPAC did work at TTC sites, including the Wilson, Islington and Finch bus stations, police said.
Police allege that the TTC project manager, who hired IPAC and was responsible for paying invoices, received a secret commission of $58,000.
His wife and son allegedly created bank accounts and received funds from IPAC under fraudulent companies, said Det. Const. Chris Devereux.
The investigation is now probing a three-year contract with an $860,000 limit awarded to IPAC in 2007. Amendments were made to the purchase order to increase the limit to $1.8 million, said TTC spokesman Brad Ross.
Ross emphasized, however, that those adjustments need authorization and are always made for “legitimate reasons.”
The company has been doing contract work for the TTC and city since 2001.
The initial investigation was launched in July 2009 when the TTC received an insider’s tip.
Councillor Karen Stintz, chair of the TTC, said police were called in a year later when the irregularities were found to be worse than first suspected.
She called the situation “very serious.”
“The public needs to have confidence that we’re managing these contracts in the public interest,” she said.
Ross said a forensic audit team is reviewing controls and the TTC will cancel all IPAC contracts and seek court action to recover assets.
IPAC Paving owner Sebastian Corbo, 51, of Toronto, was charged with fraud, possession of property obtained by crime, laundering proceeds of crime and two counts of conspiracy to commit an indictable offence.
TTC project manager Bruno Colavecchia, 49, of Maple, is charged with fraud, laundering proceeds of crime, possession of proceeds of crime, an agent receiving a secret commission and two counts of conspiracy to commit an indictable offence. He was dismissed from his job Wednesday morning.
Vincenza Grossi, 49, and Michael Colavecchia, 21, both of Maple, are charged with laundering the proceeds of crime, possession of proceeds of crime and conspiracy to commit an indictable offence.
They are scheduled to appear in court July 28.
With files from Paul Moloney
http://www.thestar.com/news/crime/article/1009567--4-charged-in-ttc-fraud-probe?bn=1
PATRICK WHITE AND ELIZABETH CHURCH
From Thursday's Globe and Mail
Published Wednesday, Jun. 15, 2011 10:51PM EDT
Last updated Wednesday, Jun. 15, 2011 10:53PM EDT
Toronto police have charged a TTC manager and his family in what is alleged to be the most serious case of internal fraud ever at the transit agency – an alleged kickback scheme that siphoned at least $149,000 from a swollen city paving contract.
Bruno Colavecchia, a TTC project manager who made over $100,000 in salary last year, is accused of collecting kickbacks from Sebastian Corbo, owner of IPAC Paving Limited, a company that signed an $860,000 TTC contract that later ballooned to $1.8-million.
The company is accused of billing the TTC $198,619.92 for work worth just $54,087.75, redirecting the surplus to Mr. Colavecchia, who was responsible for handling IPAC’s invoices to the TTC.
Both Mr. Colavecchia, and Mr. Corbo have been arrested and charged with fraud and related offences. Mr. Colavecchia has been dismissed from his TTC post.
Police have also charged Mr. Colavecchia’s wife and 21-year-old son, whom they accuse of collecting IPAC payments through bank accounts created for non-existent companies.
“The funds were going to [IPAC] and then being redistributed back to the co-accused through companies that were fictitiously created,” said Detective Constable Scott Devereaux, the investigating officer for Toronto Police Services. “At the TTC, we have not seen something of this scope before.”
The police allegations have yet to be proven in court.
The arrests have sent reverberations throughout the TTC and the rest of city hall, where IPAC has performed millions of dollars of work for multiple departments. The city is now investigating all its dealings with IPAC dating back 10 years.
The TTC has hired forensic accountants from PricewaterhouseCoopers to scrutinize IPAC contracts as it tries to recover the $149,020.62 in over-billed payments through civil courts.
TTC chair Karen Stintz said she was alerted to the allegations on Monday.
“This is one of the more serious cases, it could be the most serious case, but one of the more serious cases given the magnitude of what we have uncovered so far,” she said. “We are taking this very seriously.”
The investigation dates back to the summer of 2010. At the time, IPAC was completing work on a three-year $860,000 contract it signed in 2007 to maintain paved areas around subway stations, bus roadways, loops, yards, garages and car-houses.
That original $860,000 contract had swollen to $1.8-million by 2010 as various amendments and add-ons larded an extra $1-million onto the company’s workload, Mr. Ross said. A TTC employee who examined that work noticed some irregularities in IPAC’s invoicing between June, 2009 and July, 2010, and reported it to the agency’s special constables.
“Once they determined there was internal fraud, they approached us and we did the bank portion of the investigation,” Mr. Devereaux said. “Initially, we focused on this specific contract. We will now expand our investigation.”
Reached by phone, Mr. Corbo said he did not know the charges would be made public. “I can’t really say anything at this time,” he said. “I haven’t retained a lawyer yet.”
Mr. Corbo and Mr. Colavecchia have both been charged with fraud over $5,000, laundering proceeds of crime and two counts of conspiracy to commit an indictable offence.
They are scheduled to appear in court on July 28.
http://www.theglobeandmail.com/news/national/toronto/ttc-manager-charged-with-fraud/article2062821/
4 charged in TTC fraud probe
Published On Wed Jun 15 2011
Curtis Rush Police Reporter
A Toronto Transit Commission project manager, his wife and son are among four people charged in an alleged $150,000 fraud involving fake invoices and a secret commission for paving work at TTC bus stations.
The other person charged is the owner of IPAC Paving Ltd.
Between June 2009 and July 2010, IPAC billed the TTC close to $200,000 for work that amounted to about $50,000, police said.
IPAC did work at TTC sites, including the Wilson, Islington and Finch bus stations, police said.
Police allege that the TTC project manager, who hired IPAC and was responsible for paying invoices, received a secret commission of $58,000.
His wife and son allegedly created bank accounts and received funds from IPAC under fraudulent companies, said Det. Const. Chris Devereux.
The investigation is now probing a three-year contract with an $860,000 limit awarded to IPAC in 2007. Amendments were made to the purchase order to increase the limit to $1.8 million, said TTC spokesman Brad Ross.
Ross emphasized, however, that those adjustments need authorization and are always made for “legitimate reasons.”
The company has been doing contract work for the TTC and city since 2001.
The initial investigation was launched in July 2009 when the TTC received an insider’s tip.
Councillor Karen Stintz, chair of the TTC, said police were called in a year later when the irregularities were found to be worse than first suspected.
She called the situation “very serious.”
“The public needs to have confidence that we’re managing these contracts in the public interest,” she said.
Ross said a forensic audit team is reviewing controls and the TTC will cancel all IPAC contracts and seek court action to recover assets.
IPAC Paving owner Sebastian Corbo, 51, of Toronto, was charged with fraud, possession of property obtained by crime, laundering proceeds of crime and two counts of conspiracy to commit an indictable offence.
TTC project manager Bruno Colavecchia, 49, of Maple, is charged with fraud, laundering proceeds of crime, possession of proceeds of crime, an agent receiving a secret commission and two counts of conspiracy to commit an indictable offence. He was dismissed from his job Wednesday morning.
Vincenza Grossi, 49, and Michael Colavecchia, 21, both of Maple, are charged with laundering the proceeds of crime, possession of proceeds of crime and conspiracy to commit an indictable offence.
They are scheduled to appear in court July 28.
With files from Paul Moloney
http://www.thestar.com/news/crime/article/1009567--4-charged-in-ttc-fraud-probe?bn=1