A councillor with the Sipekne’katik Band in Nova Scotia testified the band’s former finance director was dismissed in 2012 when chief and council learned he purchased land using band funds.
“It was a big let down, a disappointment,” Doreen Knockwood testified during Jeffrey Hayes’ jury trial in Halifax, N.S. Thursday.
“It was a breach of trust with the activities that was linked,” she said.
Hayes is on trial for fraud, theft, breach of trust and possession of stolen property. The offences are alleged to have happened while he was the Director of Finance for the Sipekne’katik Band from 2009 to 2012.
If found guilty, Hayes could face up to 14 years in prison.
Knockwood was one of four witnesses to testify for the crown in court on Thursday. The court previously heard testimony from RCMP Constable Laurie Haines who investigated the alleged theft and fraud, and Shawn Fitzgerald, a former account for Sipekne’katik.
Prior to being elected to council in November 2010, Knockwood worked as the band’s Director of Operations for more than 30 years.
Knockwood, 66, testified that she was present at a band council meeting when auditors with Grant Thornton presented the findings of its audit to chief and council in January 2012.
The auditors found that Hayes used $69,000 of band funds to purchase land for himself.
Knockwood testified that Hayes was given an opportunity to explain the land purchase to chief and council “but he didn’t say anything.”
Knockwood confirmed to Crown attorney Rick Hartlen that band councillor Keith Julian made a motion to immediately dismiss Hayes from his position as Director of Finance and she seconded the motion.
Janice Paul, a band employee who used to work in the finance department, testified that she noticed an invoice submitted from Amcrest Management for a phone system upgrade at the band office in Indian Brook First Nation.
Paul was in charge of making up cheques from invoices as well as printing out cheques for payroll.
Amcrest Management is a consulting company owned by Hayes.
“When I look at this invoice, I know Kelly and Kerri were already paid,” Paul testified. “I don’t understand how this invoice that’s payable to Amcrest Management, I don’t understand where that came in.”
“I do believe they were already paid for service,” Paul said.
Loblaws devised quota tobacco rebate plan for NS First Nations
The court also heard testimony from Ralph Davidson, the former Senior Director of National Wholesale with Loblaws, a large grocery distributor in Canada.
Davidson was questioned by Crown attorney Shauna MacDonald on details of a tobacco rebate program Loblaws devised for First Nations in Nova Scotia.
On Wednesday, former band accountant Shawn Fitzgerald testified that he found a cheque from Loblaws for a significant amount in a band-owned dormant bank account.
Davidson testified he initially devised the rebate plan for Waycobah First Nation in Cape Breton to help the band with poor sales of tax exempt, or quota tobacco products in the area.
The rebate program at Loblaws worked by selling quota tobacco at a higher price to First Nations, Davidson testified. The difference between the base price and the raised price would be the rebate amount issued back to the First Nation on a monthly basis, he explained.
“I thought it was a good strategy and sometimes, strategy is important in the retail industry,” Davidson testified.
Davidson told the jury that other First Nations followed Waycobah and signed onto the rebate program. Sipekne’katik signed up in August 2009, he said. He explained the monthly rebate cheque could be in the amount of $100,000 or more per month for bands with a large population.
The trial, which began on May 16, resumes on May 30.