Unravelling high rates of white-collar crime in the Okanagan

Two months ago, former office administrator Melanie Gray was sentenced to five months in jail for stealing nearly $70,000 from Kelowna's Central Okanagan Hospice Association.

Gray, who was the office administrator at the hospice association, was accused of stealing the money between 2013 and 2015, using the hospice's company credit card.

Her case is just one of many fraud cases in the area. In 2017, there were more than 1,200 incidents of fraud in the Okanagan. The region often associated with wineries and beautiful scenery is also a hotbed for white-collar crime.

According to the latest numbers from Statistics Canada, in 2017, the rate of fraud in some Okanagan cities was nearly double the national average.

The average fraud rate for most regions of Canada is about 300 incidents per 100,000 people, but in Penticton the rate is 461, in Kelowna 592, and in Vernon 706 incidents per 100,000 people.

Prevalence of fraud

Const. Ann Donnelly, Kelowna  RCMP's lead fraud investigator, said she couldn't point to a reason why fraud levels are so high in the area, but she has learned you can't trust anyone.

"A lot of times the people who are committing these internal type of frauds and thefts are super well liked. They're your best friend. You trust them implicitly and that's the downfall," Donnelly told Daybreak South host Chris Walker.

In Kelowna, the Central Okanagan Hospice Association, which Gray was convicted of stealing from, is contending with another fraud case.

Its former executive director, Susan Steen, has been charged with fraud and theft for allegedly stealing more than $100,000 on the hospice association's credit card.

The association provides palliative care programs in Kelowna.

Steen's case is still before the courts, because she was sentenced to jail after pleading guilty to stealing close to $6,000 from the Nanaimo Community Hospice Society.

Her next court appearance for the Okanagan case is on May 31.

High fraud rates

There have been other fraud cases in B.C.'s Southern Interior.

Youth social worker Robert Riley Saunders faces civil claims alleging he pocketed the benefits of young people in his care, and last year, the owner of a hockey school in Penticton, pleaded guilty to theft over $5.000.

Glen Jackson, a chartered professional accountant with a certification in financial forensics, thinks the high rate of fraud is a reflection of the economy in the Okanagan, where there is a higher percentage of small businesses, which he said may be more susceptible to fraud.

Small businesses usually start with one person, Jackson said, who may have a lot of control. But as the business grows, the owner has to hire more people, losing a degree of oversight.

"You start to have to begin to trust other people, and those people, typically a bookkeeper who has a propensity to commit fraud, is able to take over and put themselves forth as someone who is trustworthy, someone who can help them manage their business, but internal control gets lost at that point, because there's no oversight of the person, the fraud perpetrator."

Not greed alone

Forensic accountant Marilyn Mellis, said it's too simplistic to suggest the motivation for fraud is greed alone. Rather, it's a desire among people to accumulate the material belongings they see others possessing, the classic impetus behind "Keeping up with the Jones."

"For lots of people, it isn't that they're greedy, it's that they see 'Okay my neighbor has a boat, and I would like a boat. I can't afford a boat.'

"So, the things start welling up in your mind and you start thinking, 'Okay I really need this thing. I want to be like my peers. They all have boats or whatever the thing is. And it starts to consume you," Mellis said.

Sticky Fingers: Fraud in the Okanagan is a series that looks at  white-collar crime in B.C.'s Southern Interior. It's produced by Chris Walker and Christine Coulter and airs on CBC Radio One's Daybreak South from May 6-10.