ANTIGONISH: StFX University is suing the former Coady International Institute finance director, accusing him of misappropriating nearly $250,000.
The statement of claim that was filed in Nova Scotia Supreme Court cites James Edward Marlow created fake invoices from suppliers, requisitioned cheques from the university for those invoices and then, deposited the cheques into his personal account.
The university’s claim which was filed on August 28 in Pictou, alleges Marlow’s actions constitute misappropriation of funds, theft and fraud.
Last month, the RCMP and StFX confirmed police had launched a fraud investigation.
In July, when the school’s auditor notified staff a vendor had received payment for an invoice it hadn’t issued, the university began an investigation.
Andrew Beckett, StFX’s vice-president of finance and administration, stated in his affidavit the invoices read “hold for pickup” so the cheques wouldn’t be mailed to the vendors. Marlow would then pick the cheques up personally, or have them delivered to him by a staff member.
Despite the clear instruction to “hold for pickup,” the attention of the auditor had been flagged when one cheque had inadvertently been mailed to the vendor.
Beckett interviewed Marlow on July 17 and informed him of the results of his preliminary investigation.
According to the affidavit, Marlow didn’t deny he created phoney invoices or the he deposited the cheques into his personal account.
“Mr. Marlow’s response was to the effect of ‘you know everything now,’” reads the affidavit.
Two days later, Marlow was fired and the university called in the accounting firm Deloitte to investigate.
A manger from Deloitte found 32 suspicious invoices declaring to be from three vendors, totaling $264,098. While they didn’t quite look exactly like the legitimate invoices issued by those companies, the invoices did however, have similar templates, numbering and logo of the vendors.
Of the $264,098 worth of fraudulent cheques, Beckett’s affidavit notes that $229,023 was allegedly deposited into Marlow’s personal account, $20,125 was not cashed, and $14,950 still requires further investigation.
In a way of preserving Marlow’s assets in case a judgment is awarded to StFX in the future, the university has obtained an attachment order for $229,023 against Marlow’s property in Lower South River.
The university is also asking for punitive and aggravated damages, interest on the amounts of allegedly misappropriated funds and legal costs.
None of the allegations have been tested in court.
In an e-mailed statement last Thursday, Cindy MacKenzie, a spokeswoman for the university said the matter is before the court and StFX cannot comment specifically while it is being dealt with.
“The university has undertaken a review of its internal financial management processes to ensure future integrity and security. At this time, the review has not found further irregularities and the university is confident that the matter is isolated.”