Ex-Whitecap Dakota accountant Hugo Gallegos sentenced to five years in prison
By Jeremy Warren, The StarPhoenix, September 2, 2015
The man who admitted defrauding the Whitecap Dakota First Nation of millions of dollars jammed a cooler with $143,000 in $100 bills, owned a storage locker filled with shoes worth around $200,000, and once spent $700 just on socks.
Details — along with new allegations by the defence — emerged Wednesday in Saskatoon Court of Queen’s Bench at sentencing for Hugo Edgardo Gallegos, the accountant who pleaded guilty last month to two counts each of theft over $5,000 and fraud over $5,000, a charge of laundering the proceeds of crime and a charge of possession of the proceeds of crime.
Following a joint submission by the Crown and defence, Justice Richard Danyliuk sentenced Gallegos to five years in a federal prison, and also ordered restitution of $5.8 million to Whitecap Dakota First Nation.
The defence on Wednesday said Gallegos didn’t dispute the amount taken through the scam but did dispute that he was the only person in the organization who benefited.
Corruption is widespread at Whitecap Dakota First Nation, Gallegos claimed. The defence said Gallegos was shown by another employee in the organization how to perform the cheque scam, and that the other employee went gambling with Gallegos with stolen money.
Outside the courthouse, defence lawyer Chris Lavier relayed a statement from Gallegos.
“He sincerely does feel bad about his actions,” Lavier said on his client’s behalf.
Gallegos stands behind his submissions in court that he did not act alone and will cooperate with any further investigation into the fraud, Lavier said.
On allegations of others being involved in theft or fraud at the First Nation, Crown prosecutor Robin Ritter said, ““I guess you’ll have to determine on your own whether Mr. Gallegos has any credibility at all.”
The defence also said Gallegos, who is gay, faced discrimination at Whitecap, being called homophobic and racist slurs by other staff, and being told to go clean toilets.
Gallegos, a refugee from El Salvador, came to Canada in the late-1990s and went to school at the University of Saskatchewan, eventually being hired as a low-level accounting clerk at Whitecap.
He was employed as Whitecap’s senior accountant from 2009 to 2013, until he was charged. An audit by KPMG for the fiscal year ending March 31, 2013, identified irregularities that ultimately led to the criminal charges.
Despite the allegations and complaints in court on Wednesday, Gallegos apologized to band members, along with friends and family, for “getting caught in the craziness.”
The Crown told court that Gallegos wrote 1,785 pre-signed cheques to himself and would then routinely gamble at Dakota Dunes Casino — thus the laundering charge.
The Crown said Gallegos also used the money to buy presents for him and friends. According to allegations contained in a civil court lawsuit filed by Whitecap Dakota, Gallegos deposited cheques into personal accounts and withdrew as cash, and wrote cheques using Whitecap money to pay off his and his mother’s Visa bills.
During the investigation, the Crown told court, Gallegos’s former partner brought police a cooler full of $100 bills totalling $143,000. Court also heard that police uncovered a storage locker that contained around 200 pairs of high-end shoes — mostly Prada — valued at $200,000.
Ritter, speaking outside court, said it was “shocking to see the obscene spending.”
Ritter told court that the impact on the reserve was equivalent to taking $19,000 from every man, woman and child.
Dozens of Whitecap Dakota members attended Gallegos’ court appearances in the past year.
“When I first heard about it I was totally shocked. I was devastated. I burst into tears and prayed for our chief and council so that they would stand strong,” said Whitecap Dakota member Nancy Linklater after the sentencing.
“Whitecap is very strong. We have strong leadership and the community stands tall with our chief and council. We will bounce back. There’s no doubt about it.”
Whitecap Dakota Chief Darcy Bear said he doesn’t have much hope of recovering money from Gallegos.
“I’m not going to look at that restitution order. We have to look at other means — that’s why we launched the suit against RBC and KMPG so stayed tuned,” Bear told reporters outside court.
Whitecap has filed civil suits against its bank, Royal Bank of Canada, and its auditing firm, KPMG, argue they should have caught the fraud. Allegations in the statement of claim have not been proven in court.
Bear said Whitecap has put in place new financial controls to prevent massive fraud in the future. Gallegos stole “hard-earned money” from the community as it was improving its fortunes, he added.
“This was work we all did together. We started with not one dime in our bank account and we had 70 per cent unemployment and we turned that all around: over $100 million in investments and five per cent unemployment,” Bear said.
“At the end of the day, this criminal is not going to win. We are strong, resilient people and we will move forward.”
Gallegos hurt a lot of people through his theft, he added.
“He was living a lifestyle he didn’t earn,” Bear said.
“It was stolen money and stolen lifestyle he certainly didn’t deserve.”
Posted on September 2, 2015, in Indian Act Indians and tagged band council corruption, Hugo Gallegos, indian act band councils, Indian Act Indians, Whitecap Dakota First Nation. Bookmark the permalink. 1 Comment.