Third hospital embroiled in controversy over executive

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A third hospital has become ensnared in the controversy over an executive implicated in a false invoice scheme, with Markham Stouffville Hospital launching a probe into a redevelopment project.

The hospital has hired Deloitte to conduct an audit into the financing and procurement for its $400-million construction project, and placed Suman Bahl, the senior executive who oversaw it, on leave.

The audit follows revelations in The Globe and Mail that St. Michael's Hospital is reviewing the tenure of Vas Georgiou, a senior executive whose job included overseeing construction of a $300-million patient-care tower. St. Michael's has said it was unaware when it hired Mr. Georgiou in 2013 that, while he was working for Infrastructure Ontario, he had issued false invoices that were used in a kickback scheme at York University.

Mr. Georgiou was involved in Markham Stouffville's expansion and renovation project, which was completed in 2014, while he worked at Infrastructure Ontario, and was employed at the hospital in the late 1980s.

"The fact that Vas Georgiou worked at [Markham Stouffville] in the past and also had some responsibility for our most recent redevelopment project led us to determine that it was appropriate for us to undertake a review," hospital spokeswoman Lisa Joyce said in an e-mail to The Globe. She declined to elaborate.

Gavin Tighe, a lawyer for Mr. Georgiou, said his client will not comment further, and described Markham Stouffville as a "spectacular project."

Earlier this month, St. Michael's placed Mr. Georgiou on indefinite leave and began probing his tenure after learning – through inquiries made by The Globe – that he admitted in 2011 to creating the false invoices that were sent to York University.

Infrastructure Ontario has also hired forensic auditors and lawyers to review St. Michael's construction project, among other things. And St. Joseph's Health Centre has initiated a review of its business dealings with Mr. Georgiou, who was the hospital's chief operating officer before he joined Infrastructure Ontario in 2006.

The overlapping probes by three hospitals in the Greater Toronto Area and Infrastructure Ontario – the Crown agency responsible for awarding contracts to the private sector to build hospitals, court houses and bridges – attest to the significant role the long-time senior public servant has played in renewing the province's aging infrastructure.

Before his appointment to the second-highest executive position at St. Michael's in January, 2013, Mr. Georgiou spent six years at Infrastructure Ontario, where he oversaw several large projects, including the one at Markham Stouffville. A four-storey addition and renovation doubled the size of the hospital, which serves the fast-growing communities of Markham and Stouffville north of Toronto.

The project was completed in August, 2014. Ms. Bahl, the hospital's vice-president of capital development and corporate services, who was in charge of it, was placed on leave on Sept. 17 – one day after The Globe reported that St. Joseph's was looking into maintenance contracts it awarded to Toronto Engineering Company (TECO), which was registered in the names of Mr. Georgiou's wife and in-laws and involved in the York invoice scheme.

Ms. Joyce said Ms. Bahl was placed on leave because of her role with Markham Stouffville's redevelopment. Ms. Bahl declined to comment to The Globe.

Before joining Markham Stouffville in October, 2007, Ms. Bahl worked with Mr. Georgiou at St. Joseph's hospital.

St. Joseph's chief executive officer, Elizabeth Buller, confirmed to The Globe earlier this month that TECO did work for the hospital in 2007 – the year Mr. Georgiou created one of the false invoices.

An investigation revealed that York University paid eight companies, including TECO, for work that was never completed. Mr. Georgiou admitted to investigators he created false invoices totalling $64,800. He signed a settlement agreement with the university in 2012 and was never charged.

In February, 2012, Mr. Georgiou was fired as Infrastructure Ontario's chief administrative officer after his boss at the time learned about his involvement in the invoice scheme.

St. Joseph's is trying to determine what work TECO did and whether there were any conflict-of-interest issues.

A spokesperson at St. Joseph's declined last week to comment further, saying, "We have obtained the services of a third-party auditing firm to assist us in our review. The review is ongoing."

With a report from Stephanie Chambers

khowlett@globeandmail.com;

gmcarthur@globeandmail.com;

rdoolittle@globeandmail.com