Band never authorized commission payments to Hayes, councillor testifies

Sipekne'katik Band Councillor Thomas J. Howe testified Wednesday in Jeff Hayes fraud trial/Photo by Stephen Brake

Sipekne’katik Band chief and council never authorized a plan to pay the band’s finance director a ten per cent commission for bringing business to the band, a band councillor testified in court on Wednesday.

Thomas Howe, 39, was one of four witnesses who testified Wednesday in the jury trial of former Sipekne’katik finance director Jeff Hayes.

Hayes, 61, who was the finance director for the Sipekne’katik Band from 2009 to 2012, is on trial for fraud, theft, breach of trust and four counts of possession of stolen property obtained through crime.

If found guilty, Hayes could face a sentence of up to 14 years in prison.

During his testimony, Howe told the court he was not present during a meeting between Hayes, the chief and several other councillors regarding a plan to pay Hayes a commission for economic development initiatives.

Howe has been serving as a band councillor since 2008.

Earlier in the trial, the jury watched a video of RCMP Constable Laurie Haines questioning Hayes in December 2012. During that videotaped conversation, Hayes said he had a conversation about the economic development commission with then Chief Jerry Sack and then councillors Ian Knockwood, Thomas Maloney and Howe in his office.

“Were you present for such a conversation as that?” crown attorney Rick Hartlen asked.

“For that conversation, no,” Howe replied.

“Were you present at any point when anyone discussed the idea of making Jeff Hayes responsible for economic development or paying him ten per cent?” Hartlen asked.

“Ten per cent? No,” Howe answered.

Howe also testified that he didn’t know about companies, MRJJ Management and Amcrest Management, until band accountant Shawn Fitzgerald brought them to his attention.

According to an agreed statement of facts submitted at the beginning of the trial, Hayes incorporated MRJJ Management and opened a bank account for the company. He then transferred more than $500,000 of Sipekne’katik Band funds into that account from March to December 2010.

According to the same statement of facts, Hayes then transferred more than $200,000 of Sipekne’katik Band funds into the bank account of Amcrest Management, a consulting company he owned. The money transfers were made between July 2009 and December 2010.

Howe testified that chief and council can only authorize financial decisions on behalf of the band during duly convened chief and council meetings.

“I didn’t trust what he was producing.” – Stephen Ash

Chartered accountant Stephen Ash testified May 31- June 1, 2016 in the Jeff Hayes fraud trial/Photo by Stephen Brake
Chartered accountant Stephen Ash testified May 31- June 1, 2016 in the Jeff Hayes fraud trial/Photo by Stephen Brake

Stephen Ash, a chartered accountant, testified on Tuesday that he worked with the Sipekne’katik Band shortly after Indigenous and Northern Affairs (INAC) placed the band in co-management in 2008.

He said he was appointed by accounting firm Grant Thornton to help the band with drafting up a remedial management plan to reduce its deficit and debt.

Ash, who finished his testimony on Wednesday, told the court he became concerned when he learned that Hayes was submitting monthly financial statements to INAC that were incorrect.

According to Ash, Hayes was submitting reports that showed the band would end the fiscal year with a surplus of $390,000.

“I was estimating that the First Nation, at best, incurred a deficit of $1-million,” Ash said.

Ash testified that he discussed his concerns with Hayes before sending his report to INAC via email. He said he only sent the email when he learned that Hayes was not making the corrections in his reports to INAC.

He said that in February 2010, his employer was cc’ed on a letter sent to the Sipekne’katik Band from INAC congratulating them on their efforts and being released from co-management.

Ash said the band, through Hayes, offered Grant Thornton to stay on as advisors to help with preparing a self-directed management plan. He said his firm declined the offer.

“The offer was declined because I felt that the financial statements that Jeff was presenting were deliberately misleading,” Ash testified.

“I just felt that I didn’t trust what he was producing and didn’t want to be associated with him,” Ash said.

Other witnesses who testified on Wednesday included accountant Bradley Barkhouse and former band lawyer Gary Richards.

The trial continues on Thursday.

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About Maureen Googoo 270 Articles
Maureen Googoo is an award-winning journalist from Indian Brook First Nation (Sipekne'katik) in Nova Scotia. She has worked in news more than 30 years for media outlets such as CBC Radio, the Chronicle-Herald and the Aboriginal Peoples Television Network. Maureen has an arts degree in political science from Saint Mary's University in Halifax, a journalism degree from Ryerson University in Toronto and a Masters degree in journalism from Columbia University Graduate School of Journalism in New York City.