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The owner of a group-home agency with close to 40 of Ontario's most disturbed teenagers in its care has been charged with two counts of sexual assault, the latest sign of trouble in an industry looking after thousands of the province's children.

Stephen Mitchell, 40, the owner and executive director of Mitchell Group Homes, was charged by the Peterborough Lakefield Community Police Service this week, after two episodes of unwelcome sexual contact last fall with a female group-home worker who called police. The employee no longer works for the company.

The private, for-profit agency has operated in Peterborough for more than a decade, starting with a handful of homes and growing in a few years to 21 homes that opened their doors to troubled children no one else would take.

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But with rapid expansion came problems. Local children's mental-health agencies working with Mitchell complained about filth in its homes, untrained workers and a staff turnover so high that therapists seldom, if ever, dealt with the same workers twice.

After police began investigating the agency last fall, Ontario's Office of Child and Family Service Advocacy launched a probe of its own in November, and produced a report detailing a litany of problems. These included houses in ill-repair, known predators placed in the same homes as victims of sexual abuse and whitewashed reports of serious incidents and sexual improprieties among staff.

The findings were released to the five children's aid societies with teenagers in the homes, but none removed their clients. They have insisted it is less disruptive to work on improving conditions at the group homes than to remove the children, especially with the severe shortage of foster and group homes for youngsters in the Ontario's government's care.

With news of the criminal charges yesterday, few children's aid societies had changed their minds.

"At this point, it appears that they have a plan in place to manage the situation, such that the children won't be impacted," said Nancy Dale, director of foster care and adoption with the Children's Aid Society of Toronto, which, with about 16 children in Mitchell's care, sends social workers to inspect the group homes every week. "We'll have to see whether that plan works."

At Children and Family Services for York Region, "we're not at the moment planning on moving the youngsters," said executive director Martin McNamara. "But the three that are there, we're monitoring very closely."

Mitchell Homes released a statement to societies this week announcing that Mr. Mitchell immediately took a leave of absence as director of the company.

"He believes that was the right thing to do in the interest of clients and staff of the organization and to segregate his personal situation from that of Mitchell Group Homes," said John Grasswell, the agency's head of human resources. He will step in as director, along with Mr. Mitchell's wife and another manager.

The Ontario government, which licenses group homes every year, refused to comment.

Mitchell is far from the only agency in trouble. At least half a dozen group-home operators in Ontario have lost or surrendered licences over the past 18 months.

It is an industry with a growing number of private, for-profit agencies that have sprung up to capitalize on the soaring number of children the societies put into care since overhauling the child-welfare law to allow easier removal of youngsters from struggling families.

Licensing of group homes is lax, with standards dealing far more with bureaucratic matters such as record keeping and manuals of procedure than with programs and staffing that determine the calibre of care. Homes are seldom inspected after they are licensed.

Four inquests into the deaths of children in group homes and detention centres in the past two years have produced 63 recommendations calling for tougher licensing and oversight of group homes.

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"This is obviously a really difficult situation," said Ms. Dale of the problems plaguing Mitchell, "but it's the tip of the iceberg."

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