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Students walk on the York University campus in Toronto. (Mark Blinch/REUTERS)
Students walk on the York University campus in Toronto. (Mark Blinch/REUTERS)

The courts

Documents shed light on alleged fraud at York Add to ...

York University’s president was concerned about the conduct of former assistant vice-president Michael Markicevic well before allegations surfaced that he had defrauded the school of more than $1.2-million, according to court documents.

Official complaints about Mr. Markicevic’s aggressive behaviour came to a head in 2009, but Gary Brewer, York’s vice-president of finance and administration and Mr. Markicevic’s boss, stood up for him. Within months, however, allegations of fraud swirled around Mr. Markicevic and though Mr. Brewer “still did not believe [them],” he changed his stand and told Mr. Markicevic he would be terminated, according to an affidavit sworn by Mr. Brewer.

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The following day, Feb. 2, 2010, York and Mr. Markicevic signed an agreement that dismissed Mr. Markicevic “without cause,” paid him $693,166.43 in severance – more than twice what he was contractually owed – and in which both parties agreed not to sue each other in the future.

Now, in its civil suit against Mr. Markicevic and nearly 20 other defendants, York alleges Mr. Markicevic masterminded “a vast unlawful invoices scheme” over three years while serving as assistant vice-president of campus services and business operations.

It traces a complex network of false transactions and underhanded payments, where paper bags with bundles of cash changed hands through other former employees, middlemen and shell companies incorporated only to issue invoices for fictitious work. Mr. Markicevic and Phil Brown, another former York employee, are both charged separately with fraud and money laundering in a criminal case stemming from the same investigation.

In his own affidavit, Mr. Markicevic denies the charges, contending he worked to reform “a dysfunctional organizational structure” that left York vulnerable to being exploited. He admits to being “a somewhat divisive figure” – sworn statements from employees and alleged co-conspirators say he cursed, berated and threatened them with firing, creating an atmosphere of fear – but claims that made him “an easy scapegoat.”

Though York knew of Mr. Markicevic’s clashes with staff, it appears to have been willing to tolerate them. Mr. Markicevic was “very capable,” if unpopular, Mr. Brewer wrote.

“Given Markicevic’s effectiveness, I was also much more willing to overlook the reports I had of his domineering style,” his affidavit says.

By 2009 “numerous complaints” had been filed, some with the director of York’s Human Rights Centre, Noel Badiou. That year Gina Ciampa, Mr. Markicevic’s former executive assistant, sued York for $500,000, alleging Mr. Markicevic harassed her on the job, and settled in 2011 for an undisclosed amount.

In late 2009, York president Mamdouh Shoukri made it clear the complaints “had risen to a level that [he] found unacceptable,” according to Mr. Brewer, prompting a meeting where Mr. Brewer “advocated on Markicevic’s behalf” and said he was already improving his behaviour. Dr. Shoukri and Mr. Badiou “agreed to take my recommendation to allow Markicevic some latitude.”

“I trusted and believed him,” Mr. Brewer wrote of Mr. Markicevic. “It appears that my trust was misplaced.”

Mr. Markicevic, Mr. Brewer, Mr. Shoukri and Mr. Badiou declined interview requests. Mr. Markicevic’s lawyer, Brian Shiller, said he couldn’t comment on specifics.

A York spokesperson said information on complaints is “strictly confidential.”

Much of the evidence against Mr. Markicevic comes from Dani Ierullo, a former York employee who reported directly to Mr. Markicevic, and Jack McCann, a York carpenter and former head of one of its unions. Both men admit to taking part in the frauds and taking money, but neither is a defendant after co-operating with investigators.

Mr. Markicevic says others committed crimes without his knowledge. Both Mr. Ierullo and Mr. McCann say Mr. Markicevic directed the frauds and they complied mostly out of fear.

“I didn’t feel I had anyone to go to,” Mr. Ierullo said under cross-examination. “There had been talk at the university about people complaining about his management style and nothing is being done about it, so you just got the sense that there’s not a whole lot you could do.”

Follow on Twitter: @jembradshaw

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