Former York U Managers Cleared on Fraud Charges
The Globe and Mail, May 01, 2013
By: James Bradshaw and Timothy Appleby
Two former York University managers accused of defrauding the school of more than $1.2-million have been cleared of criminal wrongdoing after prosecutors deemed a pair of key witnesses unreliable.
Michael Markicevic, 54, and Phil Brown, 47, were charged with fraud and money laundering last summer after an internal investigation at York turned up evidence of a complex scheme of false invoices and billing for work that wasn’t done on the school’s campus. But on Wednesday, Crown prosecutor Robert Wright told a provincial court hearing there was no reasonable prospect of conviction, and withdrew all charges.
The case collapsed because it hinged on the word of two other former York employees and “there is no independent corroboration for their assertions,” Mr. Wright said. He described the two witnesses as entirely unreliable. Outside the court, Mr. Markicevic’s lawyer, Michael Lacy, called the ruling a “vindication” for his client, but added, “it’s hard to be happy when charges that should never have been laid are withdrawn.”
Mr. Markicevic and Mr. Brown are still defendants in a separate $3-million civil suit launched by York, which will proceed, and which relies partly on the same two witnesses. “We are disappointed in the Crown’s decision,” York spokeswoman Joanne Rider said in a brief statement.
“We have substantial evidence in this fraud case and we are pursuing civil action against Michael Markicevic, who was unsuccessful in having the civil case against him dismissed.”
Originally hired as the university’s director of security, parking and transportation services, Mr. Markicevic went on to become assistant vice-president of campus services and business operations. In 2007, he hired Mr. Brown, whom he knew from an earlier job in automotive services. Mr. Brown did not appear at court on Wednesday, but was represented by a lawyer.
The civil case against the two men alleges Mr. Markicevic masterminded a complex web of fake invoices, transactions and kickbacks whereby York paid for services that weren’t performed. Bundles of cash changed hands through other York employees, middlemen and companies created solely to issue falsified invoices, York says in its lawsuit.
The amounts charged to the university were deliberately kept small or designated as emergency funds to avoid scrutiny, the suit claims.
Mr. Markicevic has consistently denied he did anything illegal, claiming in an affidavit filed in civil court that York’s culture left it vulnerable to exploitation, and that he was “an easy scapegoat” for others’ wrongdoing. Still, his victory in being cleared of criminal charges seemed bittersweet.
“No hard feelings,” Mr. Markicevic told the Toronto fraud-squad officer who headed the investigation as they shook hands in the courthouse corridor, but he later said the charges have upended his life.
“My daughter’s going to medical school, all of my retirement is gone, my savings are gone and my legal fees are $800,000,” he said.
The two witnesses at issue in the Crown’s decision are Dani Ierullo, York’s former associate director of facilities planning who worked under Mr. Markicevic at York until he was fired in April, 2010, and Jack McCann, a York carpenter and former head of one of its unions. Both say they helped facilitate the fraud and were paid to do so, but that they played along because they feared Mr. Markicevic, who is repeatedly described in court documents as a domineering and abrasive figure.
Because they co-operated with investigators, neither was accused in either the criminal or the civil case. But in testimony for the civil suit, both men have struggled to corroborate their claims as most of their alleged co-conspirators appear not to have met Mr. Markicevic, and defence lawyers have probed both men for apparently conflicting statements.
With attention now turning to the outstanding civil allegations, Brian Shiller, the lawyer defending Mr. Markicevic in the lawsuit, said he was pleased with Wednesday’s outcome.
“Now that the criminal charges have been withdrawn, and in a very favourable way, that bodes well for the civil proceeding,” he said.