Ottawa took years to warn Ontario First Nations about fraud
by Gloria Galloway, Globe and Mail, Feb 10, 2017
The federal Auditor-General alerted the department of Indigenous Affairs in 2011 that a man hired to co-manage a First Nation’s finances may have been engaged in fraud – the year before the RCMP alleges Joe Crupi pocketed the last of hundreds of thousands of dollars that was misappropriated from a breakfast program for children on the remote and impoverished Kashechewan reserve.
But six other First Nations that employed the Crupi Consulting Group were not told by the department until 2016 that “some anomalies” had been detected in work done by their third-party manager or co-manager.
And, even though the department says it stopped entering into contracts with Crupi Consulting in 2012, when the RCMP confirmed it was conducting an investigation, Franco Crupi, the company’s president, says he did not learn that there were concerns about his brother’s activities until 2014.
“They [the department] did not advise me directly,” Franco Crupi said Thursday in a telephone interview. “It’s too bad that we weren’t alerted before  so we could put a stop to it.”
Joe Crupi was charged in September, 2016, with fraudulently obtaining more than $1.2-million of public money for the Kashechewan First Nation from the National Child Benefit Reinvestment Program, which was meant to provide breakfast for about 400 children at the elementary school on the reserve near the west coast of James Bay. The Mounties say Mr. Crupi then “misappropriated” $694,000 of that money for his own personal use in 2008, 2009 and 2012.
He is scheduled to appear in court in Thunder Bay on April 4 to set a date for a pre-trial hearing on charges of fraud, uttering a forged document, laundering the proceeds of crime, and possession of property obtained by crime.
Documents obtained under Access to Information legislation by New Democrat MP Charlie Angus say “in 2011, the Office of the Auditor-General informed the department [of Indigenous Affairs] of possible fraudulent practices involving three contractors associated with the Kashechewan First Nation including the co-manager at the time, Joe Crupi of Crupi Consulting.”
The department ordered a forensic audit by KPMG and then turned the results of that investigation over the the RCMP in December, 2012.
Joe Crupi, who was never an actual employee of Crupi Consulting, was hired as a sub-contractor to work strictly with Kashechwan, his brother said. But the documents show that, in 2016, the Indigenous Affairs department requested records related to the management agreements that Crupi Consulting had with six other First Nations between 2007 and 2013.
When The Globe and Mail asked the department to explain when those First Nations were told that there were concerns about the company, the department referred to letters sent in February, 2016, to warn them that forensic audits were being conducted.
Franco Crupi says those forensic audits of his company have taken place and he has co-operated fully. “All I know is that one day I find myself with this on my desk, having to turn things around, and trying to deal with the fallout of something that I didn’t do and no one else in my company did,” he said
Crupi Construction ended its relationship with Joe Crupi in 2013 or 2014, according to Franco Crupi, who said he has conducted his own investigation to find out what happened.
“There would be food at the hangar. They would put the food on a contractor’s charter, on an Indian Affairs’ charter, going to the community. What happens when it’s there? If it’s caught on time, it goes to where it needs to go,” Franco Crupi said. “If it doesn’t get caught on time, it goes somewhere else and we have proof of that. … Where it went, I don’t know.”
The documents obtained by Mr. Angus show that Crupi Consulting was put on a list of contractors that had been pre-qualified by the Indigenous Affairs department to work with indigenous communities. Even though the department stopped approving contracts for the firm in 2012, the company remains on the list because, a departmental official explained, names cannot be removed once they are on it.
Mr. Angus said that demonstrates the close relationship between the department and companies that work as third-party managers.
“What would it possibly take for the department of Indigenous Affairs to get serious about putting the interests of the community ahead of people that they have decided are made men for the department?” Mr. Angus asked.
“In the case of Joe Crupi, there were numerous red flags raised, the Auditor-General raised concerns, and the department did nothing.”
For Franco Crupi, the charges have created both a professional problem and a family rift.
“I am not going to say that Joe may not have done what it’s alleged that he’s done. If the proof is there, it’s there. But I don’t think he did that alone. My greatest disappointment is that, if he got put over a barrel, he never came to talk to me,” said Mr. Crupi. “At some point in time I am going to have to forgive him but right now it is what it is.”