Cheryl MacLeod, of Hamilton, Ont., was convicted and sentenced on fraud, uttering forged documents and theft charges in relation to her role as owner and director of CTC Payroll Services. She claimed to be a payroll expert with over 25 years experience and operated CTC Payroll Services from 2001 to 2010.
While MacLeod ran her payroll services company, she also owned operated a Molly Maid franchise (which operated out of the basement in the same building CTC was located at 664 Fennell Ave E in Hamilton), a business known as Forever Young Spa and another business known as Chery Lynn International.
Police alleged that MacLoed had taken more money from clients than was required by the Minister of Finance for Employer Health Tax (EHT), submitted the correct amount and kept the extra funds. She was also accused of withdrawing money from client accounts and then failing to remit it to the Canada Revenue Agency and with sending forged bank documents to a client in an attempt to conceal the failure to remit funds to CRA.
According to court documents, the total loss on all of the charges was about $370,000.
During the trial in October 2017, Macleod testified that she agreed with the Crown’s assertion that the clients suffered losses but she denied defrauding them. The main question the judge addressed at trial was whether MacLeod had caused the losses and/or whether she had intended to defraud them.
The trial judge, Justice Catrina D. Braid, found MacLoed to be “confrontational” and that her evidence to be “self-serving, confusing and often made no sense.”
“Whenever she found an opportunity, Ms. MacLeod would boast about CTC’s excellent reputation, which she says gave the company more authority and permitted CTC to do things that no other business would ordinarily be allowed to do. This included unorthodox banking practices at CIBC and special arrangements with CRA,” she said. “I find that Ms. MacLeod deliberately avoided answering inquiries from clients regarding missing funds in order to conceal the fraud.”
Ultimately, the judge declared that she was convinced beyond a reasonable doubt that MacLeod was guilty of all charges, stating, “Ms. MacLeod took advantage of her role as owner of CTC to intentionally defraud clients of funds that were provided to CTC in trust. She then took steps to conceal the fraud and theft of those funds.”
MacLeod reappeared in court on April 3, 2018, for sentencing. MacLeod asserted her innocence. This, Justice Braid said, would make it “difficult to find that she would be a suitable candidate for rehabilitation.” She also noted MacLeod suffered from mental health issues but that this did “not appear to impact her ability to work” and that there was no evidence that it “contributed to the offences or resulted in poor judgment being used.”
MacLeod was sentenced three years for the four counts of fraud, three years for the use of forged documents and two years for the two remaining counts of fraud. The judge ruled that all of these would be served concurrently. She called for MacLeod’s mental state to be assessed immediately to provide her with the appropriate medical care while she was in custody.
Justice Braid also ordered MacLeod pay restitution in the amount of $366,056.21. She said she was satisfied that these funds were no longer in her possession so a fine in the same amount would be issued instead of its forfeiture. She was given five years after release from custody to pay the fine.
Enforcing Restitution Orders
Norman Groot, a lawyer with the fraud recovery law firm Investigation Counsel PC, has advised CFN that often in criminal cases involving fraud, guilty parties are only required to serve one-sixth of their sentence before seeking parole. It is likely that MacLeod has been released. Her whereabouts are currently unknown.
Groot also advised that the Crown and the police do not enforce restitution orders, and that criminal restitution orders have to be registered as civil judgments if victims hope to receive any meaningful recovery for their loss. Unfortunately the victims of fraud are required to put “good money after bad” to monitor and investigate rogues to determine whether a recovery can be made.
According to Court records, in 2009, CTC sold its client list to ADP Payroll with the plan to cease business practices by Dec. 31, 2009. This resulted in a number of companies finding imbalances, for which they enquired MacLeod about — often without adequate responses from CTC. Two examples of those defrauded included:
– A.J. Clarke and Associates – who had contracted CTC to do their payroll services but when they transitioned to a new payroll administrator in June 2009, they discovered CTC had been over-deducting Employer Health Taxes since 2001 with a total loss of A.J. Clarke of $60,360.72.
– Voith Paper – in December 2008, the company decided to close its Hamilton plant, resulting in 58 employees being laid off and receiving lump sum severance payments. A total of $979,299.00 was transferred from the Voith Paper to CTC’s trust account. CTC deducted funds from Voith’s account and then failed to remit those funds to CRA. Voith reported total losses of $263,674.23.
Anyone wishing to provide confidential whistleblower information on assets and income information for Cheryl MacLeod are asked to contact Daina Slenys at firstname.lastname@example.org.
A full copy of the court file is available here.