First Nation alleges funds misappropriated

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This article was published 21/09/2024 (442 days ago), so information in it may no longer be current.

Birdtail Sioux First Nation is suing its former director of education and two members of its council, accusing them of misappropriating education department funds and conspiring to use those funds to enrich themselves.

The lawsuit names Leah Lazaruk, Leona Benn, Sandy Bunn and two council members — Heath Bunn and Theresa Kasto — as defendants. It also names Brandon accounting business Akrual Enterprise Solutions and a business name registered by Lazaruk, “101 MB.”

None of the allegations has been proven in court.

The statement of claim was filed last month in Court of King’s Bench by lawyers Timothy Fry and Kosta Vartsakis of the Winnipeg firm Merit Law.

Birdtail Sioux accused Lazaruk and the other defendants of misappropriating funds, breaching trust and fiduciary duty, unjust enrichment, negligence and conspiracy. The claim also accuses Lazaruk of unilaterally giving herself a new title and receiving pay increases without change to her assigned duties.

The claim also alleges that Lazaruk took a medical leave of absence without providing documentation and wrongfully received wages and reimbursement for a hotel stay. On another occasion in 2022, the claim states that she unilaterally negotiated the terms of a contract between Birdtail Sioux and Assiniboine College, which Birdtail Sioux claims did not reflect good value for the First Nation.

Birdtail Sioux is also claiming that Lazaruk diverted all of the First Nation’s education department funds ($521,001) from the Dakota Ojibway Tribal Council into a bank account and then opened a second account a month later, into which remaining funds were transferred.

The claim states that in January 2023, Birdtail Sioux hired a consulting firm to manage and oversee the First Nation’s finances, which discovered “concerning transactions” in the education department.

The consulting firm reviewed monthly statements from the second bank account but eventually terminated its contract with the First Nation in March 2023.

After Birdtail Sioux terminated Lazaruk’s employment, the claim says the First Nation found what it alleges to be illicit transfers of funds to Lazaruk and three other defendants. It also claims that at least $27,520 was transferred to 101 MB, the business name registered by Lazaruk.

In Lazaruk’s statement of defence filed by lawyer Scott Cannon of the Winnipeg firm Holloway Thliveris on Sept. 6, Lazaruk admits to taking a medical leave. She also admits that 101 MB is a business name registered by Lazaruk with the Companies Office of Manitoba.

The statement of defence says that she denies all allegations in the statement of claim and argues that the claim should be dismissed.

It states that at the time of the registration of 101 MB, she had been terminated by Birdtail Sioux First Nation and that the business name was opened to comply with a provincial program that helps businesses with the cost of continued education.

It also states that her medical leave was approved by the First Nation and that she was not advised that she had no more vacation or medical leave available. She also denied opening any bank accounts.

The statement also claims that the purpose of the second bank account was because of bank fraud that police had been investigating.

It claims that the chief and council were aware of the terms of the Assiniboine College contract and that all payments made to her and other defendants were authorized and done with the knowledge of Birdtail Sioux.

In addition to general damages, the lawsuit also seeks a declaration that some or all of the defendants have misappropriated funds and assets belonging to Birdtail Sioux First Nation and its community members.

In a statement to the Sun, Indigenous Services Canada said it is aware of the allegations and the department’s assessment and investigation services branch is “in the process of assessing the allegations to determine the next steps.”

At the time of publication, none of the other defendants had responded to the lawsuit with statements of defence.

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