ST..JOHNS (CBC) - A Newfoundland and Labrador cabinet minister said she wanted the police to investigate questionable transactions in a student exchange program months before a probe actually started.

Education Minister Joan Burke said she thought the Royal Newfoundland Constabulary should have been called in March 2007, when she learned about a potential case of fraud involving a student exchange program.

However, she left the decision with the Eastern School District, which CBC News has learned knew of questionable financial transactions involving a student exchange program for 10 months before the RNC was informed.

Documents show that the district, the largest school board in the province, was given evidence in November 2006 about cash transfers involving prospective students from South Korea.

A videotape obtained by CBC News shows a meeting in a hotel bar in Seoul in November 2006 between Gary Young, at the time the director of the Newfoundland International Student Education Program (NISEP).

An agent, who attracted Korean students to schools in the province, secretly recorded the conversation because she had had suspicions about Young.

On the tape, Young said, "I would be very, very disappointed and saddened, if you didn't take this $7,600."

The agent recorded the tape after her business allegedly received a cheque of more than $15,000 from NISEP. The cheque was $4,400 more than she expected.

On the tape, Young explains where the money came from.

"Every year, in the past four that we've been working, I've had a few kids who come, and they come in a situation where I'm sort of able to collect some sort of a service fee or something from them, but they don't have an agent," Young says on the tape.

Money came from unclaimed fees, agent told

Young told the agent that the money came from unclaimed agent fees that had been sitting in NISEP's accounts. He said he wanted the cheque split three ways. He proposed that the agent would collect half, while the remaining $7,600 would be split between Young and a co-worker who was travelling with him.

Instead of agreeing to that, the agent the next day laid a complaint with the Eastern School District about Young.

The agent, a Newfoundlander living abroad, met with Burke in early September 2007 while she was visiting the province, and brought the tape to police.

Later that month, the agent received a response from the deputy minister of education, who wrote that the matter was handled internally, that Young no longer was with the school board and that no criminal charges were pursued.

Young did not respond to repeated attempts to contact him.

The Eastern School District is not commenting on the matter because of an ongoing police investigation.

Didn't agree with official's assessment: Burke

Burke, who said she learned about the Young case in March 2007, told CBC News she also wanted to go to police after a face-to-face meeting with the agent on Sept. 6.

Burke was away from the office for several weeks, due to a death in her family and the campaign for the Oct. 9 general election.

Burke said she did not know about a letter from her deputy minister to the agent until she returned to work in late October. She told CBC News that it did not sit well with her.

"I reviewed it again with the Department of Justice and I understand their assessment, but I wasn't comfortable with that assessment," she said.

"I guess that draws on some of my background with corrections," said Burke, who worked in the penal system before entering politics. "So I asked despite that, if we could, you know, turn it over to police [and] let them know what we had."

Burke said her department informed the RNC in late November.

As well, the government has hired a consultant to do a full review of the student exchange program.

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