City of Edmonton sues former employees accused of stealing $1.6M in false invoicing scheme

·2 min read

The City of Edmonton is suing two former employees accused of defrauding the city of more than $1.6 million.

Terrence Oneal Gosine and Harinder Singh Sandhu, both who resigned from the city a year ago, worked with Sandhu's relatives to obtain payment from the city under false pretences, the lawsuit alleges.

Sandhu's wife Kuljit Kaur Sandhu, father Amrik Sandhu, sister Rupinder Sandhu Grewal and brother-in-law Jagprit Grewal, who owned a company called Capital Sign Rentals, were also involved in the scheme, according to a statement of claim filed on July 15.

The defendants have not filed a statement of defence and did not provide comment to CBC. The allegations have not been proven in court.

According to the lawsuit, Gosine was employed as a construction project manager and later as an engineering program manager, while Sandhu was an engineering technologist and construction project coordinator.

While with the city, the pair and their co-conspirators created false invoices from Capital Sign Rentals, the lawsuit alleges.

The invoices were submitted to the city for temporary traffic control devices such as signs, barricades and traffic cones.

Few, if any, items were actually provided by the company to the city, the claim says.

"Capital Sign was paid for the false invoices by the city in an amount to be proven at trial, but no less than $1,609,833.42," the lawsuit states.

"The conspirators created, submitted and/or approved the false invoices, knowing the false invoices to be false or being willfully blind or reckless as to the accuracy or validity thereof, and received payment that they would have not received but for the fraudulent scheme."

In October 2019, the city's auditor launched an investigation based on a complaint emailed to the manager's office that accused an employee with a side business in traffic sign rentals of improperly submitting invoices for neighbourhood renewal projects.

According to a report by the auditor in July, the money was stolen between 2015 and 2019.

The auditor found that the false invoicing scheme took advantage of control weakness in the city's procurement and payment processes.

Of $1.9 million invoiced in total, the city could only find evidence of about $250,000 worth of work actually delivered, the auditor said.

During the course of the investigation, the auditor also uncovered the involvement of the second employee.

A second company he had a personal and financial relationship with also submitted invoices for about $150,000.

The city was able to recall the payment and another $45,000 payment was recovered from the first company.

After the release of the report, the city added another layer of review to the cheque-requisition process and ramped up the use of data analytics for detection and training around fraud awareness.