Former Ontario hospital executive and construction company president convicted of fraud in $300 million project

A former hospital executive and the former president of a major Ontario construction company have been found guilty of fraud for distorting the bidding process for a $300-million expansion of a downtown Toronto hospital, in a verdict that has echoes across all public contracts.

Vas Georgiou, former chief administrative officer of St. Michael’s Hospital, and John Aquino, former president of Bondfield Construction, were convicted in a Toronto court Tuesday morning of two counts of fraud over $5,000.

“There is evidence that the defendants acted dishonestly during the procurement process,” Superior Court Judge Peter Bowden said in his ruling.

The judge said that the inside information that Georgiou had provided to Aquino via secret emails was “confidential, of high content and clearly aimed at assisting Bondfield in winning the procurement. That conduct would be recognized as objectively dishonest under any circumstances, but when viewed in the context of a strictly regulated public procurement, it is unremarkable.”

Bowden said the entire process of awarding contracts for public works has been put at risk.

Their 136-page judgment said, “Public confidence in the responsible use of public funds for infrastructure projects depends on a procurement process that is genuinely competitive…The defendants’ dishonest conduct compromised this objective.”

“Their actions show that even a well-regulated process can be vulnerable to corruption at senior levels. This undermines confidence in public procurement and could discourage qualified bidders from participating in future projects, which would weaken competition and harm market integrity.”

Asked if she had any comment after the verdict was read, Aquino told CBC News: “Are you kidding?”

His lawyer, Alan Gould, was more measured. “We will read the judge’s reasons very carefully but on their face they appear to be problematic as a matter of law,” he said, declining to comment on whether that meant his client would appeal.

Georgiou’s lawyer Peter Bruti did not want to comment while the case is still before Justice Bowden for sentencing.

The family company was once a major player in Ontario

Prosecutors had alleged that the two men worked behind the scenes between 2013 and 2015 to tilt the procurement process in favor of the Aquino family company, Bondfield, which was once a major player in large-scale public works projects in Ontario.

The Crown’s case was based, among other things, on evidence of a pre-existing business relationship between Georgiou and Aquino; Georgiou worked for a real estate business partly owned by Aquino, and both men owned shares in the same bottled water company.

In his ruling on Tuesday, Justice Bowden found that these relationships represented a conflict of interest that Georgiou, as a high-ranking public sector executive sitting on the same committee that was evaluating the contract bids, was required to disclose, but did not.

Prosecutors Ellen Weiss and Rachel Young also presented evidence that the individuals disclosed confidential information about the bidding process to which Georgiou had access. bondfield.com email address and a Blackberry phone that Aquino supplied.

Bowden’s decision stated that these illegal communications deprived the hospital and the Ontario government “of a contracting process conducted in the most transparent manner so that there is no question as to the fairness of the outcome.”

The judge wrote, “Bondfield’s bid should never have gone before the Executive Committee for consideration. If (the hospital and the government) had known about the messages exchanged between Mr. Georgiou and Mr. Aquino… Bondfield’s submission would have been rejected.”

The defense argued that even if the rules of the contract process were broken, it did not make it unfair or increase the cost of the hospital’s expansion.

The trial began last November and lasted more than a month with testimony from hospital and construction officials. Giorgio took the stand in his defense and confirmed that he always put the interests of the hospital first and only provided Aquino with the information already made public.

Bowden said: “I do not believe any of this testimony and find that none of it can reasonably be true.”

Aquino was dismissed in 2018

Aquino has not been at the helm of Bondfield since 2018, when he was ousted from the presidency and replaced by his brother Steven Aquino. The financial condition of the company and related corporations was deteriorating, and Bondfield eventually filed for protection from creditors in April 2019. was described as One of the largest failures ever in the Canadian construction industry.

Several major public works projects, including: Hospital expansion in Cambridge, Ontario.Bondfield was in disarray due to bankruptcy.

Subsequent tracing of the funds by auditors revealed that John Aquino and several others had participated in a scheme to embezzle more than $33 million from Bondfield and a related family company in the five years before the companies went bankrupt. Aquino and his associates were ordered to repay the money and appealed to the Supreme Court of Canada, where Last time they lost a case Which had no connection with this criminal case.

After being sued dozens of times by Bondfield’s suppliers and insurance companies, Aquino was forced to file bankruptcy last June, owing at least $37 million to creditors and potentially tens of millions more to an insurer. bankruptcy decision,

Construction at St. Mike’s was scheduled to be completed in 2019, but has been delayed and is now expected to be completed next year. The project includes a new 17-story patient tower, more operating rooms, and an expanded emergency department.

Georgiou has not been at the hospital since November 2015, when she was dismissed as the No. 2 executive following a Globe and Mail report on her undisclosed relationship with Aquino during the bidding process for a hospital construction project, among other issues.

In an email statement after Tuesday’s decision, Sabrina Divel, vice president of stakeholder relations for Unity Health, into which St. Michael’s Hospital merged in 2017, said the hospital “fully cooperated” with the police investigation that led to criminal charges and cleared Georgiou of “any criminal wrongdoing.”

“We are confident in the hospital’s procurement processes and policies, and recently audited the controls for our redevelopment projects to verify that we have a rigorous system in place.”