School District 43 (SD43) has launched a civil suit against a former facilities manager in the hopes of recouping $113,400 in losses from an alleged fraudulent purchasing scheme.
In the lawsuit filed in the Victoria Registry of Supreme Court on July 6, SD43 alleges that Rizwan Shawl and Maurizio Niro of NGC Supplies “embarked upon a fraudulent scheme to misappropriate funds” from the school district, which serves Coquitlam, Port Coquitlam and Port Moody.
According to the suit, Shawl or Niro created false invoices for heating, ventilation and air conditioning (HVAC) systems purportedly sold to two elementary schools but not delivered.
Shawl, who worked as a maintenance manager in the district’s facilities department from July 1, 2020, to May 13, 2022, allegedly signed off the invoices, which were paid for by SD43.
In a statement of facts, SD43 claims that around May 14, 2020, Shawl initiated a service request for an HVAC system for Leigh Elementary, a Coquitlam school.
Shawl, whose purchase authority was limited to $15,000, did not follow purchase order protocols, according to the claim. He allegedly created “fraudulent documentation” that purported that the HVAC system had been sold and delivered to the school.
The claim states that Niro/NGC then invoiced the district and was paid $42,000 for the HVAC system.
However, the HVAC system was “never delivered,” SD43 claims.
A year later, on or about June 18, 2021, an SD43 employee initiated a service request for direct digital controls for heating and lighting at Glenayre Elementary in Port Moody.
However, the service request was “altered” to include the purchase of a VRV Rebel HVAC system, the district states in the claim. The district said Niro/NGC invoiced the district $71,400 for the equipment, which was paid.
However, the “second HVAC system was never delivered to the plaintiff,” the claim states.
“The Fraudulent Proceeds have been received and converted by the defendants to their personal benefit, to the detriment of School District 43, and all without juristic reason for such receipt,” the lawsuit states.
In including Niro in the suit, SD43 alleges that “he knew or ought to have known, or was reckless or wilfully blind that the monies arising from the fraud and conversion were fraudulently obtained by Shawl and that he was unjustly enriched and School District 43 suffered damage and loss.”
Shawl, meanwhile, “acted outside of School District 43’s PO Protocols, to facilitate the ‘purchase’ and payment of the invoices in respect of the two HVAC systems and School District 43 detrimentally relied on Shawl’s apparent observance of the PO Protocols by advancing the Fraudulent Proceeds to NGC,” the lawsuit states.
The lawsuit further adds that Shawl, Niro and NGC “deliberately concealed their actions.”
While the “precise details” of how the proceeds were apportioned are “unavailable at this time” and “will be provided in due course as they are discovered,” the suit alleges that Shawl used the money to maintain his family residence.
While the full particulars are unavailable and are “within Shawl’s knowledge,” the lawsuit notes that the district has acquired an interest in Shawl’s Pitt Meadows property.
Besides $113,400, damages, special damages, as well as costs, the district wants a “tracing and accounting of all moneys had and received,” and a requirement that Shawl hold in constructive trust interests in properties acquired with “fraudulent proceeds.”
“[And] in these circumstances, a monetary award, on its own, is inadequate, insufficient and inappropriate,” the lawsuit states.
“The plaintiff is entitled to a declaration that Shawl holds the Pitt Meadows property as a constructive trustee on behalf of the plaintiff and for an order requiring Shawl to convey the Pitt Meadows property to the plaintiff.”
As well, the district wants a declaration stating that SD43 holds “title to and property rights in all assets purchased, maintained, repaired or enhanced with any of the fraudulent proceeds and any additional sums including the Pitt Meadows property, as well was for certificates of pending litigation over the interests of Shawl in title to the Pitt Meadows property.”
The legal basis of the claim is that Shawl breached his duties and obligations to SD43, and through the alleged fraudulent payment scheme, “took funds from SD43 for their own direct or indirect benefit.”
“As a result of the defendant’s wrongful conduct, Shawl and Niro have benefitted from the dealings and caused harm and financial loss to School District 43.”
None of the claims have been tested in court, and Shawl and Niro have 21 days to respond to the claim.
The Tri-City News has reached out to SD43 about whether procurement policies have been tightened but was told the district can’t respond while the case is before the courts.
