Richmond Hill Councillor Karen Cilevitz Guilty to Fraud Under $5,000 and Sentenced to House Arrest and Restitution

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The Crown has withdrawn charges against Cilevitz’s spouse, Derek Christie.

Eighteen months after Karen Cilevitz and her spouse Derek Christie made the headlines for Fraud Over $5,000 charges, the Richmond Hill councillor pleaded guilty in Court on July 11 to a lesser offence of Fraud Under $5,000.

Cilevitz, 64, will serve a three-month conditional sentence for fraud under $5,000, the Court ordered Monday. During the period, she is required to remain in her residence daily between 10 p.m. and 6 a.m. except for emergencies.

The city councillor was charged with Fraud Over $5,000 and Breach of Trust by a Public Officer which have since been withdrawn. The plea to Fraud Under $5,000 resulted from a plea deal. The amount taken was more than $5,000.

The councillor made full restitution to the City of Richmond Hill as part of the plea deal according to the Court.

“You’ve done a lot of good. But this one action is incredibly bad. It’s bad because a person in a position of integrity violated the most core trust required in a democracy,” Justice Paul M. Cooper said.

The Crown withdrew the charges against Cilevitz’s spouse Derek Christie. He was charged with Fraud Over $5,000 and Possession of Proceeds of Crime.

The Richmond Hill couple were arrested Dec. 15, 2020 following a report from Richmond Hill Integrity Commissioner Norman Groot filed with the York Regional Police about an alleged pay arrangement between Cilevitz’s new staff member and her spouse.

The alleged criminal scheme resulted in more than $21,000 being transferred from the councillor’s new assistant to Christie from August 2019 to May 2020, police say. The new assistant had been an volunteer for Cilevitz.

Cilevitz said she had hoped to hire her spouse Christie as her assistant in her office to help through the difficult times. However, she was told that the city’s hiring of relatives policy prohibited her from doing that. So she made an under the table arrangement with a long-time volunteer from her campaign.

Under the salary arrangement, the city would receive work from the volunteer. Cilevitz’s used her discretionary budget to provide remuneration for the volunteer’s work on condition that she transfer some of it to Christie.  

With the title of administrative clerk, the volunteer worked about 20 hours per week, included providing support and assistance at council meetings and community events. She received $800 to $900 net biweekly from the city.

The volunteer was required to transfer a portion to Cilevitz’s husband Christie every second Friday. By doing so, Cilevitz perpetrated a fraud the Town of Richmond Hill, and caused significant distress to her volunteer.

During the 11-month time, the volunteer transferred a total of $21,384.68 out of the $37,00, or over 50% of what she received from the city, to Cilevitz’s husband Christie. The volunteer said she is “still quite traumatized by the subject” and declined to speak, but was open to responding on email.

The relationship between Cilevitz and the volunteer deteriorated in early 2020 when the volunteer raised her concerns about being required to pay taxes on money that she was giving to Cilevitz. Cilevitz refused to pay the volunteer’s taxes on the funds the volunteer gave her, so the volunteer reported her.

The volunteer said she sought help from Regional Coun. Perrelli with her concerns about working with Cilevitz. Her complaint was reported to the Integrity Commissioner, which eventually was turned over to the police.

Had Cilevitz simply paid the taxes on the fraud she was perpetrating, the scheme may have never come to light. Cilevitz did not believe her volunteer had the wherewithal to challenge her, so she refused to pay the tax.

Since as early as the 2018 municipal election, Cilevitz said she has endured stress and distress caused by people who would “seek to destroy me on a political level,” as the devastating impact on her health has led to the need for professional help.

Cilevitz was docked pay for 90 days for allegedly harassing and intimidating a Richmond Hill resident in December 2018, following a complaint filed by Regional Coun. Carmine Perrelli.

In the following months, Cilevitz would face a total loss of 315 days’ pay as a result of several other complaints filed to the integrity commissioner’s office by Perrelli, who also proposed higher sanction than recommended at that time.

In addition to almost a year’s worth of pay suspension sanctioned by some of her colleagues, Cilevitz was often seen being interrupted and mocked by the city council which has been marked by disruption and bickering this term.

Richmond Hill Mayor David West said “elected officials should be expected to uphold the public’s trust and serve the community with integrity — this is what the residents of Richmond Hill deserve and what our Council is committed to doing for the remainder of this term.”

Despite the fraud conviction, Cilevitz is permitted under the Municipal Act to retain her council seat.

With the next election months away, Cilevitz said she will leave the decision about her future as a councillor in the hands of the public. “It’s up to the residents to decide whether or not I should serve a third term,” Cilevitz said.

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