When Harold Fraser, retired co-founder of B.A. Blacktop Ltd. died in 2012, employee Domenica Fazio left a message on the obituary website.
“You always took the time to talk to me when you came to the north Vancouver office and include me in the gifts you gave the girls from your travels,” she wrote.
Three years later, she would begin embezzling $1.9 million from the company claiming she was being treated badly.
A B.C. Supreme Court decision delivered in late May has ordered former employee Fazio to repay the $1.9 million she took over a six-year period, imposed a punitive fine of $100,000 and ordered her to pay special costs and interests to B.A. Blacktop and parent company Eurovia BC Inc.
Supreme Court Justice Gary Weatherill said: “Fazio was an employee in a position of trust and committed a serious, protracted, sophisticated and deliberate fraud that resulted in the plaintiffs suffering a significant loss. A message must be sent to those who are placed in a position of trust over corporate funds such as Ms. Fazio here, namely that if you steal from your employer, the consequences will be severe.”
B.A. Blacktop and Eurovia BC launched the civil action against Fazio, the Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Toronto Dominion Bank, John Doe and Jane Doe. The paving companies claimed Fazio committed fraud, conversion and deceit as she skimmed off funds using various employee direct deposit accounts.
B.A. Blacktop Ltd. and Eurovia also had Fazio’s response to the civil claim struck down.
While in a position of trust, Ms. Fazio perpetrated a deliberate, methodical and exploitative fraud on the plaintiffs,
— Justice Gary Weatherill
B.C. Supreme Court
“In particular, she did not set out any valid reasons why the plaintiff’s claim against her lacked merit,” Justice Weatherill said. “The focus of her response was instead on allegations of a toxic workplace and various forms of mistreatment by the plaintiffs during her tenure as an employee since March 1998.”
The embezzlement took place from 2015 to 2021 where Fazio served as a payroll administrator and later a payroll supervisor until her resignation on Aug. 5, 2021.
Upon her departure, the company carried out an internal investigation as various and numerous payroll discrepancies appeared, including in the Canada Revenue Agency monthly and annual accounts. The investigation led to a belief Fazio was using her computerized payroll knowledge to defraud significant sums of money.
By December 2021, the companies filed a notice of civil claim against Fazio, obtained an ex parte Mareva injunction to freeze her assets and a court order to hand over a list of all her assets.
In addition to the freeze order on her assets, the presiding justice at that time ordered Fazio’s banking institutions to disclose particulars of various accounts owned or thought to be owned by Fazio. With that information in hand, the companies hired forensic accountant John Williams to determine the extent of the fraud. A report was submitted Sept. 29, 2022.
Williams and his team’s forensic review identified some 885 unauthorized payments initiated by Fazio through the plaintiffs’ payroll system.
“In total, Mr. Williams identified that Ms. Fazio misappropriated over $1.9 million from the plaintiffs, which was deposited into 19 separate bank accounts that she held in four separate financial institutions,” said Justice Weatherill in his reasons for judgment.
Williams found Fazio would create fictitious payment requests for employees or past employees and by manipulating the direct deposit system would have those funds directed to accounts held by her. After the deposits were made, she switched the direct deposit info back to that of the employee.
“While in a position of trust, Ms. Fazio perpetrated a deliberate, methodical and exploitative fraud on the plaintiffs,” the justice ruled.
Justice Weatherill said Fazio, who represented herself in court, admitted the fraud during submissions.
Her only response was “broad and unsupported allegations against the plaintiff that she was subject to harassment, sexual harassment, overwork and general mistreatment during her tenure as employee.”
Fazio claims she developed a gambling addiction and gambled away all the money on an online gambling portal and now has no assets or income and is in poor health.
Justice Weatherill said, “this is an egregious case of employee theft that warrants a significant punitive damage award” and therefore imposed the $100,000 fine.
He also granted special costs to the plaintiffs against Fazio.
“For unexplained reasons, she failed or refused to abide by the freezing order by spending money on living expenses without advising the plaintiffs’ counsel in advance of the source of the funds and by failing to provide an affidavit verified asset list that was to include all bank and investment accounts.”
So… the order to freeze assets was optional???