Former N.S. hospital CEO is charged with breach of trust and fraud over $5,000.

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Tracy Kitch is charged with breach of trust and fraud over $5,000.

The fraud trial of a former Nova Scotia hospital chief executive began Monday in Halifax with the Crown alleging that Kitch deceitfully used public money for personal flights to her Ontario home and other ineligible expenses.

Tracy Kitch’s defence lawyer assert her client never falsified her expenses and that her claims were approved by the chair of the hospital’s board.

Kitch was a CEO of the IWK Health Centre, faces charges in Halifax provincial court of breach of trust and fraud over $5,000 stemming from the investigation into her expenses.

A Grant Thornton review ordered by the hospital’s board in 2017 found about $47,000 in expenses deemed “potentially personal” were charged to the children’s hospital. Kitch paid back all the expenses in a short period of time and stepped down from the position. She was earning an annual salary of $296,289 at the time of her departure.

Peter Dostal, the lead Crown prosecutor in the case, claimed he would build a case displaying that public money was spent for personal purposes — which he said would be sufficient to prove fraud.

Dostal said “we’re asking the court to consider whether the use of the (public) money in a personal fashion is fundamentally dishonest from a reasonable person’s perspective.”

The trial will focus on about 68 expense transactions over three years, including flights between Toronto and Halifax, adding that the Crown will present evidence showing they are of a “clearly personal character,” rather than for business reasons as they were claimed.

“Most of these expenditures took the form of the accused purchasing a flight pass, an (airline) product that is essentially the pre-purchasing of … flights,” said Dostal, adding there were also hotel, meal, taxi and baggage charges included between August 2014 and June 2017.

Residence in Ontario

Dostal noted that Kitch had a residence in Oakville, Ont., and travelled there several times during her employment at the IWK. He told Judge Paul Scovil that the bulk of the allegedly improper purchases occurred through Kitch’s corporate credit card.

The prosecutor said some of the transactions weren’t necessarily fraudulent but are important because they were expenses for “business reasons” with “a significant personal benefit,” such as frequent trips to Toronto to work with a communications consultant on speeches.

The opening witness for the prosecution was Det. Christian Pluta, the lead Halifax police investigator. He testified that the investigation began when they reviewed the “unauthorized expenses” outlined in the Grant Thornton review in September 2017.

155 credit card transactions reviewed

Pluta said he interviewed senior executives, public relations staff, board members at the hospital and assistants to Kitch and the team that prepared the Grant Thornton review.

The detective said he spent a month investigating the expenses, which had 155 credit card transactions. Some of the purchases, such as flights, were one purchase but would include 10 flight passes, said Pluta. “They [the transactions] were noted to be outside IWK policy,” he testified.

Defence lawyer, Jacqueline King, questioned Pluta and suggested the officer there wasn’t evidence of deliberate deception by Kitch.

CBC reported that “she noted before the court that when Kitch had a personal expense on her corporate card, such as putting up a relative at a hotel or transporting her son in a taxi, she would indicate this to her executive assistant and use phrases such as “please track it,” to indicate her intention to reimburse the money.”

“Did you see anywhere in the plethora of documentation you were given … where you found a receipt and it said, ‘She was having dinner with so-and-so, but really this was a charge for her and her husband?’ Was there anything put on that (form) that wasn’t true?” she asked the detective.

“No,” he replied.

Outside court, King said the charges against her client was “unfortunate,” adding, “I want to make sure all the evidence comes out ….There are a number of indications (in evidence) very contrary to what the public perception is.”

Stephen D’Arcy, the hospital’s former chief financial officer, is charged with breach of trust, unauthorized use of a computer and mischief to data in the same matter. His trial is set to begin May 30, 2022.

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