NLESD recovers property linked to fraud case, but legal fees exceed its value
The good news is that the Newfoundland and Labrador English School District has recovered property linked to a corruption case involving a former manager.
The bad news is that the school board paid more in legal fees to get it back than the actual value of the shed and trailer in question.
Earlier this month, the NLESD withdrew a court action against Kevin Walsh and his company Kevin Walsh's Equipment and Services Ltd.
Walsh is a friend of Derek Newhook, a former school board employee on the Burin Peninsula who was convicted last year of breach of trust and two counts of fraud.
Fifteen other fraud charges were dismissed. Newhook has appealed his convictions.
The shed and trailer linked to Newhook's fraud convictions were taken to Walsh's equipment yard back in 2015.
When the NLESD tried to get that property back in 2018, Walsh declined to release it unless he was paid for three years of "storage."
The school district has pegged the value of the 12-by-16-foot shed at $4,000, and the trailer at $4,500, for a total of $8,500.
So the school district filed a court action, to get a recovery order from a judge.
Legal fees in the now-discontinued case were approximately $20,000, according to the NLESD.
In an emailed statement to CBC News, the school district said it "recognizes this is more than the actual cost of the shed and trailer," but "felt it should not enrich Mr. Walsh by making rental payments or allowing him to retain the property in question."
The NLESD said it did not pay the rental fees claimed by Walsh, and added that Walsh paid $350 to the district in court-related fees.
The property was returned as of May 3, the NLESD indicated, and will be "re-purposed" for use at a school.
No comment from Walsh
In an email to CBC News this week, Walsh steered requests for comment to his lawyer, who didn't respond to messages.
In affidavit filed at Supreme Court this March, Walsh said the shed and trailer were moved to his site in 2015, and its continued storage became a "nuisance" for his company.
He said he was advised in early 2016 that an investigation was ongoing and he should "stay away from district property until further notice."
Walsh said he didn't hear from the NLESD until the summer of 2018, when they sent a local contractor to remove the shed and trailer.
Walsh refused.
"At no time did Walsh's Equipment agree to store the shed and trailer for no cost," he noted in his affidavit.
In an email to CBC News last November, Walsh said "the district should be ashamed for its actions to date."
AG reported on widespread financial issues at NLESD
The now-concluded dispute between Walsh and the school district was a civil matter.
To date, Newhook is the only person to face criminal charges related to financial oversight issues linked to purchasing at the NLESD.
He was charged in early 2016, not long after the police were called in.
The province also asked the auditor general to look into purchasing issues at the school district around the same time frame.
The AG's report took 2½ years to complete, and revealed endemic oversight problems and financial rule-breaking over the period examined from 2011 to 2016.
The auditor general's review focused on the facilities branch of the school district's eastern region.
Her findings have been referred to the RNC and RCMP.
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