Fraud trial of former N.S. hospital CEO to focus on travel expenses: Crown

Tracy Kitch is charged with breach of trust and fraud over $5,000 stemming from an investigation into her expenses while she was the senior leader of the IWK Health Centre

CITYnews\ Canadian Press

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HALIFAX — The fraud trial of a former hospital chief executive began Monday in Halifax provincial court with the Crown alleging that she deceitfully used public money for personal flights and other expenses.

Tracy Kitch is charged with breach of trust and fraud over $5,000 stemming from an investigation into her expenses while she was the senior leader of the IWK Health Centre.

A Grant Thornton review ordered by the hospital’s board in 2017 found about $47,000 in expenses deemed “potentially personal” were charged to the children’s hospital. Kitch paid back the expenses after stepping down that summer.

“We’re asking the court to consider whether the use of the (public) money in a personal fashion is fundamentally dishonest from a reasonable person’s perspective,” said Peter Dostal, the lead Crown prosecutor in the case.

Dostal said in his opening statement that the trial will focus on about 68 expense transactions over three years, including flights between Toronto and Halifax, adding that the Crown will present evidence showing they are of a “clearly personal character,” rather than for business reasons.

“Most of these expenditures took the form of the accused purchasing a flight pass, an (airline) product that is essentially the pre-purchasing of pre-booked flights,” said Dostal, adding there were also hotel, meal, taxi and baggage charges included in the evidence he will present for the period between August 2014 and June 2017.

Dostal noted that Kitch had a residence in Ontario and took frequent trips there during her employment at the IWK. He told Judge Paul Scovil, who is presiding over the trial, that the bulk of the transactions occurred through Kitch’s corporate credit card, and he alleged proper procedures weren’t followed in the transactions.

The prosecutor said some of the transactions weren’t necessarily fraudulent but are relevant because they “arguably” were expenses for business reasons but had “a significant personal benefit,” such as frequent trips to Toronto to work with a communications consultant on speeches.

The Crown has noted the case is backed with extensive documentation, with 24 volumes of records including receipts, expense submissions and emails written by Kitch.

The opening witness for the prosecution was Det. Christian Pluta, the lead Halifax police investigator. He testified that the investigation began when he and other police officers reviewed the “unauthorized expenses” outlined in the Grant Thornton review in September 2017.

Pluta said he interviewed senior executives with the hospital, public relations staff at the hospital, assistants to Kitch and board members of the hospital, as well as the team that prepared the Grant Thornton review.

The detective said that in December 2017 he reviewed detailed spreadsheets from the review and then spent a month poring over all of the expenses, including 155 credit card transactions. Some of the purchases, such as flights, were one purchase but would include 10 flight passes, said Pluta.

“They (the transactions) were noted to be outside IWK policy,” he testified.

Stephen D’Arcy, the hospital’s former chief financial officer, is charged with breach of trust, unauthorized use of a computer and mischief to data in the same matter. His trial is set to begin May 30, 2022.

This report by The Canadian Press was first published Nov. 8, 2021.

Michael Tutton, The Canadian Press