Two former York University employees have been charged with defrauding the school of $1.2-million in an alleged scheme a school spokesperson describes as “very complex.”
Michaelo Markicevic, 53, and Philip Brown, 46, are accused of billing the university for goods and services it didn’t receive, and “in excess of market value,” between May, 2007 and April, 2010.
Mr. Markicevic held a senior position as assistant vice-president of campus services and business operations, while Mr. Brown was the director of maintenance. Both men are facing charges of fraud and laundering proceeds of crime, Toronto police announced Thursday.
“It’s hard to detect some of these frauds when the people that you entrust to stop these schemes and the security systems that you have in place are breached by management,” said Financial Crimes Unit Detective Adkin Holder.
The alleged improper payments came to light when an employee came forward with documents in December, 2009. York officials have since tightened controls on everything from work orders to institutional purchasing cards, and developed a formal “safe disclosure policy” for whistle-blowers.
“As a not-for-profit institution entrusted with monies from our students and public funds, York University takes its fiduciary responsibilities very seriously and has rigorous procurement policies and procedures in place,” said York president Mamdouh Shoukri in a statement Thursday morning.
Dr. Shoukri also said the university “is in the process of taking steps to recover the funds,” and a spokesperson confirmed York has filed civil suits against both of the accused.
Last fall, The Globe and Mail revealed that “a few key individuals” who left York in 2010 were being scrutinized over numerous apparently improper payments for campus construction and maintenance. “It’s more than a couple [of transactions]. It’s a lot,” Det. Holder said.
University officials hired the Chicago-based forensic accounting firm Navigant to prepare a detailed file on the transactions, which was turned over to Toronto police in May, 2010, and launched a subsequent police investigation.
According to public disclosure records, York University paid Mr. Markicevic $209,854 in 2010, even though he left the school in February of that year. He made $233,635 in 2009.
Mr. Markicevic and Mr. Brown are scheduled to appear in court in mid-July.
York is one of Canada’s largest universities, with nearly 55,000 students and an annual budget of about $900-million.