Jail time for Prince Albert lawyer who pocketed $35K from false residential school claims

In the late 2000s and early 2010s, Kristian Eggum's name was on the lips of people who hadn't gone to residential school but wanted to get a cut of Indian Residential School Settlement money, according to the prosecutor in his fraud case.

The Prince Albert, Sask., lawyer submitted more than 800 claims for survivors. While many of them were legitimate, at least three dozen were from people he knew, or should have known, hadn't actually attended residential school, Crown attorney Darren Howarth said in an interview with CBC News.

Those successful fraudulent claims netted people $233,000 — of which Eggum received $35,000, the prosecutor says.

"It took advantage of a program set up to address the legacy of Indian residential schools," Howarth said. "And it was intended under the settlement agreement [for] those moneys to go to those persons that attended Indian residential schools."

Eggum, 80, pleaded guilty to a charge of fraud over $5,000 last Friday at Prince Albert Court of Queen's Bench. Following a joint defence and Crown sentencing submission, Eggum — who hasn't practised law since 2012 — was sentenced to 90 days of prison time, to be served on weekends.

The scam

Eggum was charged in 2016 after an RCMP investigation that went back to 2013, according to a Saskatoon StarPhoenix report.

Howarth said the RCMP had received two tips that led to Eggum's arrest.

The first came from a residential school survivor who had heard that many people were falsely claiming to have attended St. Michael's Indian Residential School at Duck Lake, Sask., and was upset about it.

The second tip came from intercepted "cheat notes" from prisoners at Pine Grove Correctional Centre in Prince Albert.

The notes detailed how to make a claim that someone attended St. Michael's and gave answers for verification questions to prove that they went.

And in many cases, it worked.

The fake claimants were able to take advantage of a clause in the settlement agreement that said in the absence of records, the federal government would "err on the side of the applicant if it's uncertain whether they went or not," Howarth said.

'Relying on people to be honest'

"There was certainly an element of the government of Canada … relying on people to be honest in their applications."

The claimants were eligible to get between $10,000 and $20,000, depending on how long they had spent in the residential school, under the "common experience fund," which was different from the individualized testimony process that most are familiar with, Howarth said.

"You didn't have to ever testify or prove any sort of abuse. It was just you were entitled to the money if you went," he said.

While the scam was effective, Howarth wouldn't go so far as to call it sophisticated.

"There was some complexity to it. But in some respects it was also quite simple," he said.

No more charges expected

Howarth calls the fake claimants "co-conspirators," but says they aren't likely to be charged.

"At the time they were interviewed by RCMP, they were offered immunity by the RCMP from prosecution [for] their co-operation. So I do not anticipate any criminal charges against them."

In court, both he and defence agreed that the $200,000 the fake survivors got is "unrecoverable. It would be like getting blood from a stone," Howarth said.

Eggum has been suspended from practising law since 2012 due to an unrelated Law Society of Saskatchewan investigation. The association said it isn't able to comment.

He has already paid back $30,000, with the rest to come after he's served his sentence. All of it will go back into the fund.

Eggum now has dementia, Howarth said.

This isn't the first time allegations of fraud with Indian Residential School Settlement payments have made their way through the courts.

The Canadian government and Tony Merchant's law firm, Merchant Law Group, were engaged in a years-long legal battle over $25 million in payments for work on residential school claims.

Last March, the Supreme Court of Canada denied leave to Merchant Law Group to appeal a decision concerning the case, according to a Canadian Lawyer magazine report.