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Article: The Hamilton Spectator December 10, 2019

 

A Decade of Deception Cost Halton Region Millions

Mr. David Ohashi, P.Eng.  Halton Region Corruption

Finally.

Looking Forward To Sentencing!

Prostitution Of An Profession Series, A Online Novel

David Ohashi, P.Eng. -  Halton Region Corruption

 

Excerpt from:

The Hamilton Spectator December 10, 2019

 

A Decade of Deception Cost Halton Region Millions

 

The shocking details in the report raise serious questions about Halton Region’s oversight of contracts, invoices, payments as well as its oversight of external contractors and suppliers.

 

The 50-page report, sent anonymously to The Spectator, was prepared by an external forensic accounting firm in October 2018 on behalf of the region to investigate the actions of David Ohashi, a former high-ranking manager in Halton’s water and wastewater division. - Toronto Star file photo

 

A confidential report obtained by The Hamilton Spectator shows Halton Region spent tens of millions of dollars over more than a decade on bogus payments, faked invoices and unnecessary equipment through a scheme orchestrated by a former employee who has since been found guilty of fraud-related charges.

 

The 50-page report, sent anonymously to The Spectator, was prepared by an external forensic accounting firm in October 2018 on behalf of the region to investigate the actions of David Ohashi, a former high-ranking manager in Halton's water and wastewater division.

 

The report, which was provided to Halton's director of legal services, highlights a long list of instances where Ohashi allegedly accepted bribes and kickbacks, improperly helped outside companies obtain contracts with the region and aided them in submitting fraudulent invoices.

 

The forensic accountants found dozens of occasions where Ohashi allegedly accepted money, flights, vacations, hotel rooms, tickets, electronics, home renovations, "adult entertainment" and even Viagra.

 

The shocking details in the report raise serious questions about Halton Region's oversight of contracts, invoices and payments, as well as its oversight of the behaviour of some companies that provide services and equipment to the region in the water and wastewater division.

 

Two of the companies identified in the report alleged to have provided kickbacks to Ohashi are still on Halton Region's most recently published list of approved suppliers of equipment and services for the water and wastewater division.

 

In written responses to The Spectator's questions, Halton Region stated it "is committed to the highest standards of corporate accountability, transparency, responsibility and integrity."

 

"These are the actions of individuals in positions of trust who chose to use the knowledge of the controls and systems to defraud Halton residents and Halton Region," stated Stacey Hunter, spokesperson for the region.

 

"Their actions in no way represent the 2,500 skilled, hardworking and dedicated individuals who serve Halton residents each and every day."

 

"Halton Region has rigorous systems, policies and procedures in place to safeguard assets and protect the public interest," Hunter stated. "Even the most controlled system cannot prevent illicit activity, particularly when internal and external collusion is involved."

 

In 2016, Ohashi was charged with seven counts including municipal corruption, accepting secret commissions, fraud and criminal breach of contract.

 

While some of the details of Ohashi's actions became public when he was charged, the forensic accountants' report provides a comprehensive analysis of the scope of the allegedly fraudulent behaviour which appears to have gone on for more than a decade.

 

Ohashi was found guilty by a jury on June 21 of fraud over $5,000, fraud under $5,000, and uttering a forged document. He is scheduled to be sentenced on Feb. 28.

 

Also facing charges with Ohashi was Stoney Creek resident David Norris, principal of Sirron Systems Inc., a company that was a vendor and service provider to Halton Region.

 

Norris was charged with five counts and convicted by a jury on June 21 of fraud over $5,000, municipal corruption, and accepting secret commissions. He will also be sentenced on Feb. 28.

 

Ohashi and Norris attempted to have their convictions stayed earlier this fall by launching a challenge under the Charter of Rights and Freedoms that argued their rights were violated by the Crown, but they abandoned their application on Nov. 28.

 

Attempts to reach Ohashi and Norris for comment were unsuccessful.

 

Following Ohashi's arrest in 2016, Halton police investigated and charged another region employee, Nicolas Rewa, who was subsequently found guilty of defrauding the region of about $770,000 through falsely awarding service contracts to Sirron Systems Inc.

 

Rewa was sentenced to three years in jail.

 

The forensic accounting firm prepared the investigative report based on emails, phone call logs, texts, BlackBerry Messenger messages, a computer hard drive analysis, and reviews of Halton Region invoices and contracts.

 

The investigators also received documents from the ex-spouse of Norris, who also happened to be a former bookkeeper of Sirron Systems, one of the companies implicated in the scheme.

 

Sirron Systems performed electrical, instrumentation and data acquisition services for Halton Region from 1995 to 2017.

 

According to the confidential report, Sirron Systems issued nearly 16,000 invoices totalling $30.5 million to Halton over the 22-year period.

 

When the forensic accountants interviewed Norris' ex-spouse, she told them Sirron began submitting fictitious invoices to Halton Region around 2003. She told them she was terminated in February 2014 "as a result of her reluctance to participate in Sirron's 'questionable billing practices,'" the report states.

 

The forensic accountants compared Sirron bookkeeping spreadsheets with Halton Region invoices and calculated that Sirron's allegedly fictitious invoices to Halton totalled between $12.3 million to $13.9 million.

 

At least 38 of the allegedly fictitious invoices totalling $490,000 were directly attributable to Ohashi, the report states.

 

At one point, Halton Region issued payments of nearly $500,000 in total of Sirron invoices to the Receiver General of Canada because the Canada Revenue Agency had obtained a garnishment order against the company.

 

The report found evidence Norris provided kickbacks to Ohashi that allegedly included cash payments of $41,000 and $11,200 (U.S.), as well as travel, electronics and tickets.

 

According to a text message exchange in April 2011, Norris allegedly hid part of one kickback payment in a washroom stall. "When u get here use washroom — $$ are under toilette paper roll on top of garbage can," Norris texted Ohashi.

 

On other occasions, according to the report, payments were allegedly mailed directly to Ohashi's home.

 

Included in the report are several instances where Ohashi allegedly manipulated the tendering process to the advantage of a hand-picked company or helped alter the terms of a contract to provide benefits to a company.

 

For example, the report suggests Ohashi succeeded in having certain minimum requirements added to the tender for the provision of ozone equipment for the Burloak Water Purification Plant, which disqualified competitors to the company he wanted to obtain the contract.

 

The report shows the main company that ended up providing the ozone equipment and a second smaller company hired to service the equipment were both represented by the same person, a New Jersey man whose listed business address appears to be his home. The report also alleges there were instances when the New Jersey man provided kickbacks to Ohashi.

 

Ironically, the report points out, there was no need for a service contract for the ozone equipment because the company that supplied it was supposed to maintain and repair its own equipment.

 

In text messages from 2012 with a Halton Region co-op student, Ohashi told her how the New Jersey company rep would fly to Buffalo and stay in Niagara Falls.

 

"I meet him Friday nights ... then ... And then golf Saturday mornings before he flies back," Ohashi texted. "Ah man, u got me confessing too many secrets... you have (too) much blackmail material now."

 

When the forensic accountants looked into details of the service invoices from the New Jersey companies for the ozone equipment, they found evidence of suspicious activity.

 

Each water plant is required to maintain an operations log that notes the presence of external suppliers and contractors.

 

On 24 occasions between 2005 and 2010, Halton was billed a total of $248,000 (U.S.) for service calls but there is no record that anyone from the New Jersey companies actually visited the water purification plants based on the logs.

 

Between 2005 and 2009, one of the New Jersey companies billed Halton $120,000 (U.S.) for "remote monitoring" of the ozone systems, the report states, but years later the region learned from another high-ranking manager that the ozone systems weren't even set up to be monitored remotely.

 

The report also found 41 invoices totalling $91,000 (U.S.) submitted to the region by one of the New Jersey companies for travel expenses, but not one of the travel claims had any supporting documentation or receipts.

 

In at least one case, Ohashi is alleged to have engaged in what's known as "hard spec'ing" equipment for certain projects. Hard spec'ing refers to the practice of requiring general contractors on a project to use very specific pieces of equipment, which can then benefit the suppliers of that equipment.

 

In another case, a service contract was to be advertised for tender but Ohashi only contacted one company to bid on it. Then he sent an email to a Halton Region colleague alerting him that only one company ended up submitting a bid.

 

The investigative report found "numerous instances" where Ohashi would blind copy certain suppliers and contractors on email messages he was exchanging with other region employees. This would give the suppliers and contractors knowledge of potentially sensitive information about projects and tenders.

 

In the wake of the Ohashi case, Halton Region states it has "conducted an extensive review of its processes and procedures, updated its employee and vendor codes of conduct and implemented mandatory training to identify and report fraudulent behaviour."

 

Despite allegations of providing kickbacks to Ohashi, two companies named in the report are still among the approved companies on Halton Region's most recently published list of pre-qualified suppliers and contractors.

 

The Spectator has elected to not name the companies because they have not been charged with any criminal offences.

 

One of the companies still approved for business with Halton is alleged to have supplied Ohashi with cash, travel, event tickets and "adult entertainment," as well as paying travel costs for Ohashi's son.

 

When contacted by The Spectator, the company representative denied that his company engaged in any kickback scheme.

 

He said there was a cash payment but it was a hockey sponsorship for a team associated with Ohashi's children. Any alleged travel payments were also hockey-related, the company rep added.

 

Halton states it has reviewed its list of vendors "and has taken appropriate action and cannot comment any further due to ongoing legal proceedings."

 

sbuist@thespec.com

 

905-526-3226

 

sbuist@thespec.com

 

905-526-3226

 

Steve Buist

by Steve Buist

Steve Buist is an investigative reporter and feature writer with the Hamilton Spectator. He is the creator of the widely-acclaimed Code Red project, which examines the connections between health, social and economic factors in Hamilton. He has won four National Newspaper Awards, been named Canada’s Investigative Journalist of the Year three times, Ontario’s Journalist of the Year five times and past winner of the world’s top cancer reporting prize by the European School of Oncology.

 

Email: sbuist@thespec.com

 

#HaltonCorruption #Ohashi #Norris #SirronSytems #PEO

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