The federal government is suing the University of British Columbia and Dr. Christopher Zed – a high-profile member of UBC's faculty of dentistry until his abrupt departure in late 2013 – over alleged misuse of $10.6-million in federal funds.
The lawsuit, filed in B.C. Supreme Court last week, provides previously undisclosed details about the university's investigation into possible financial impropriety within the faculty of dentistry. UBC publicly disclosed the investigation in April of last year after media inquiries about Dr. Zed's departure, though at the time did not mention Dr. Zed's connection to the probe.
The lawsuit comes as UBC is under scrutiny on several fronts, including the surprise departure of former president Arvind Gupta, the suspension of author Steven Galloway from its creative writing program for as-yet undisclosed allegations, and recent complaints about its handling of alleged sexual assaults on campus.
When the university confirmed the faculty of dentistry investigation last year, the school would say only that concerns related to one of UBC's dentistry programs had surfaced the previous summer and that, after a review, UBC had notified the RCMP in February, 2014. Citing privacy regulations, UBC declined to say whether Dr. Zed was involved with that investigation, confirming only the date of his departure from UBC – Dec. 9, 2013.
The new court filing, however, links Dr. Zed to the investigation through allegations that he and the university misused federal funds.
The lawsuit concerns transactions that went on for more than a decade, from 2002 to 2013, and were funded by $10.6-million from Health Canada. Those funds were supposed to provide dental services to First Nations people living in Haida Gwaii.
Instead, according to the statement of claim, only $7.3-million was actually used to run the two clinics. And a UBC investigation found Dr. Zed had abused his position of trust and "through complex and deceptive activities transferred public funds from Canada for his personal benefit and hid $5.1-million of spending from UBC's conclusive analysis," says the statement of claim, which contains allegations that have not been tested in court.
The statement of claim says a UBC analysis of Health Canada funds found $2-million had been spent on patient billings and insurance recoveries at the two clinics; $1.2-million in unexplained deposits by Dr. Zed to his personal bank account in May, 2011; $2-million in credit card payments to non-UBC credit cards and banks, some of which were under Dr. Zed's name; and $221,000 in credit card payments to Dr. Zed's UBC Amex Card for travel and entertainment expenses.
As well, the UBC analysis found "the $2-million of Skidegate and Massett Village dental clinics as patient billings had been diverted to the three bank accounts under Dr. Zed's control in violation of UBC's accounting practices and policies," according to the statement of claim.
The statement of claim contains allegations that have not been tested in court, and neither Dr. Zed nor the university has filed a statement of defence.
Dr. Zed, who continues to practise in Vancouver, did not immediately return a message left at his office. Attempts to reach his law firm were also unsuccessful.
UBC issued a written statement from Hubert Lai, the school's lawyer, that said the university had not yet been served with the statement of claim and needed time to review the document before commenting.
The Haida Gwaii clinics were run by UBC and were among sites that provided training for dentists in the general practice residency program. Under agreements between UBC and the federal government, Canada paid for the clinics and for professional services, including dental specialty services and equipment and supplies, that were provided by UBC.
The lawsuit alleges UBC breached its obligations under those contracts in multiple ways, including failing to provide dental care to First Nations people who were eligible for Health Canada services – creating long waiting lists in the process – and by providing services to people who did not qualify for federal coverage.
Before leaving UBC, Dr. Zed was front and centre in UBC outreach programs in the Downtown Eastside and abroad. He was also part of a team that provided dental care to athletes in the 2010 Olympic Games.
An RCMP spokesman said the police investigation is continuing.
The College of Dental Surgeons of B.C. is aware of the suit.
"The allegations are serious but unproven, and at this time there are no restrictions on Dr. Zed's registration status," college spokeswoman Anita Wilks wrote in an e-mail.