In deciding whether to send embezzler Edith Chalmers to jail, Justice John Menzies had a problem.
On one hand, here was an aboriginal woman who’d overcome an horrific childhood to become a model citizen.
On the other, she was a former First Nation welfare administrator who stole tens of thousands of dollars in welfare money to pay her drug dealer to support her cocaine habit.
It’s a crime that gives bigots and racists an excuse to argue that aboriginal managers can’t handle money, Menzies said.
"A crime of this type just perpetuates that bigotry and that racism. It’s a crime against all aboriginal people in this country," Menzies remarked in Brandon Court of Queen’s Bench on Thursday as he sentenced Chalmers to one year in jail for fraud and theft.
While welfare administrator for the Birdtail Sioux First Nation, Chalmers siphoned $177,862.71 from band welfare accounts between April 1, 2008 and May 31, 2009.
Crown attorney Rich Lonstrup said Chalmers "drained the welfare account dry."
Chief and council had to get money from private sources and divert it from projects to ensure those on social assistance received the funds they desperately needed.
The majority of Birdtail band members receive at least some social assistance, Lonstrup said.
"Resources that were supposed to go toward groceries, and clothing and diapers instead largely went up Edith Chalmers’ nostrils," Lonstrup said.
Chalmers thwarted the software program used to monitor the welfare system at Birdtail Sioux as she issued 265 fraudulent cheques. The system prints and logs cheques so they can be reported to the federal department of Aboriginal Affairs when required.
For example, a cheque for $2,720 was logged on the software as being paid to Manitoba Hydro. Actually, it was paid to Chalmers’ drug dealer.
One of the worst examples of the fraud came in April 2009, when Chalmers and one of her daughters went to Money Mart in Brandon with post-dated cheques.
Chalmers told staff that the cheques were for a "camp" and reserve programs and her daughter was an employee.
Mother and daughter hurriedly scrawled their signatures on the cheques, and bought money orders in the name of Chalmers’ drug dealer. They got away with $6,490.
On other occasions, cheques were made out to the dealer, or to Chalmers’ two daughters, who would cash the cheques and split the money.
Chalmers also wrote cheques in the names of 23 welfare recipients without their knowledge, then forged their names and cashed or deposited them herself.
When the band tightened security, by requiring two co-signers on the cheques, Chalmers forged their signatures.
One of those forged signatures was that of Chalmers’ own sister-in-law, who had no involvement in the crime and took part in reporting the matter to the band and police.
But when the fraud came to light, the sister-in-law was wrongly suspected of being involved by community members.
About $76,000 of stolen money was traced to the drug dealer as payment for cocaine. But, while some would have gone to the daughters, the rest of the stolen money remains unaccounted for.
The fraud was ultimately detected because Chalmers took so much money that the account went into overdraft. That alerted Vanguard Credit Union staff, who recognized that an endorsing signature on a cheque didn’t match that of Chalmers’ sister-in-law.
When confronted, Chalmers initially blamed her daughter who has schizophrenia.
Lonstrup said Chalmers also promoted the negative stereotype that band administrators misuse funds, and she hurt the cause of aboriginal self-government.
But, Lonstrup pointed out the Birdtail Sioux First Nation was using approved methods to guard against cheque fraud. The band co-operated fully with the police investigation and auditors.
Defence lawyer Jonathan Richert said that Chalmers’ "horrific" and traumatic childhood played a role in the offence.
The Supreme Court requires judges to take into account
an offender’s aboriginal background during sentencing in light of the over-representation of aboriginals in jail.
That is, judges are to take into account the effects of colonization and residential schools, such as substance abuse, loss of culture and loss of parenting skills.
Court heard Chalmers’ Caucasian father was absent. Her alcoholic mother, an aboriginal residential school survivor, was abusive and distant. Her home was rife with drinking.
At five years old, Chalmers was forced to be caregiver to her siblings when her mom wouldn’t. She was the one who found her brother’s body when he killed himself at 16 years old.
She was rejected by both the aboriginal, and non-aboriginal, community.
Despite all that, 56-year-old Chalmers got an education, and had an excellent work history and no criminal record prior to the fraud.
Richert said Chalmers’ life fell apart in 2008 when her mom died from cancer. She unsuccessfully used some of the stolen money to try to buy some of the affection from her mother that she hadn’t received as a child.
In an unhappy marriage, she became depressed and turned to drugs.
"Cocaine numbs the pain, and fraud pays for the cocaine," Menzies said.
Lonstrup argued for a sentence of two-years-less-a-day in jail, while Richert asked for house arrest of 12 to 18 months.
Menzies decided Chalmers’ crime was too severe for her to avoid jail. He sentenced her to one year in jail followed by 18 months probation.
While Menzies recognized Chalmers will likely never be able to settle the debt, she was ordered to pay back the $177,862 she stole.
Chalmers’ two daughters both previously received suspended sentences for possession of property obtained by crime. A man identified as the drug dealer is still before the courts on that charge.
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