Former Halifax hospital CEO guilty of fraud

Judge Paul Scovil says Tracy Kitch breached the strict adherence to the high ethical standard her position demanded

CITYnews halifax \ Canadian Press

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The former CEO of a Halifax children’s hospital was found guilty on Monday on one count of fraud over $5,000, while a provincial court judge stayed a second charge of breach of trust.

In issuing his decision in Halifax provincial court, Judge Paul Scovil said Tracy Kitch failed to adhere to the high ethical standard her position demanded as head of the IWK Health Centre by making improper personal expenses.

“Ms. Kitch clearly breached that standard,” Scovil, who read aloud from his written decision, told the court. “The evidence before the court clearly showed that Ms. Kitch used corporate funds for personal expenses, placing the IWK funds in potential peril.”

Scovil said that Kitch’s “flagrant abuse” of flight passes and credit cards were a marked departure from what was expected of her in a position of public trust.

“The actions taken by Ms. Kitch in her criminal use of public funds cannot be seen as other than against the public good,” the judge said.

Kitch appeared in court Monday via video link.

Scovil’s decision followed a two-week trial last November. The Crown closed its case Nov. 25 and the defence declined to call any witnesses.

The Crown alleged Kitch used her corporate credit card to pay for thousands of dollars worth of personal expenses between August 2014 and June 2017, while her defence lawyer argued prosecutors failed to present evidence that she had been deceitful.

Kitch resigned from her position at the IWK Health Centre in August 2017 following an independent audit that found she had used her corporate card to bill the hospital about $47,000 in personal expenses. She eventually paid back over $45,000, according to the judge’s decision.

The audit was ordered by hospital officials after a CBC investigation revealed discrepancies in Kitch’s expenses. She was charged in October, 2018.

Outside court, Crown attorney Peter Dostal told reporters he was pleased with the judge’s decision.

“His (Scovil’s) result and ultimate analysis, I think, confirmed … that the private use of public funds is inherently fraudulent,” Dostal said, adding that the verdict also sends a message that expense rules must be followed regardless of intent or whether the money is eventually paid back.

“The offence of fraud happens when you unlawfully and without any right take money from a public institution … and then use it for personal purposes,” he added.

The Crown, he said, will consider its sentencing proposal, adding that jail time for Kitch is “on the table as far as we are concerned.”

A pre-sentence report will be filed with the court before the scheduled April 25 sentencing hearing.

Scovil stayed the breach of trust charge, citing a Supreme Court of Canada argument that stated, “where an accused is charged with a substantive offence arising out of the same fact, the rule against multiple convictions applies and a conviction cannot lie for both.”

He said Kitch charged the hospital numerous flights to Toronto “for no reason other than personal travel.”

He said the personal use of corporate funds was also clear in “taxi charges, hotel stays for relatives, iTunes, Netflix and data overages.” Scovil also noted that the personal use of a rental car and charges submitted for parking tickets related to its use fell within the “area of fraudulent activity.”

The judge said Kitch used the corporate credit card for personal charges despite having signed documents that made it clear the practice was not allowed.

“It should be noted that Ms. Kitch assured two separate (hospital) board chairs that her expenses were in order, when they clearly were not,” Scovil said.

This report by The Canadian Press was first published Feb. 28, 2022.