Former Montreal school board official gets absolute discharge in fraud case

Caroline Mastantuono, the former head of the Lester B. Pearson School Board's international department, has been granted an absolute discharge after pleading guilty to corruption-related charges.

Quebec Court Judge Salvatore Mascia announced the sentencing decision Tuesday at the Montreal courthouse.

An absolute discharge means Mastantuono, 61, will not have a criminal record and will not face any punishment by the court.

Mastantuono, surrounded by family members, sighed with relief after hearing the decision. 

"It is clear from the evidence that the offender is a person of good morals, and that risk of reoffending is between zero and nil," Mascia wrote in his ruling.

"It is also evident that the offender is a hard-working and resourceful person who is an asset to the community."

Mascia said Mastantuono did not benefit "one penny from the offences to which she has pleaded guilty."

The judge added that the "negative media coverage that followed her arrest and prosecution was the source of humiliation and important financial loss. Under those circumstances, can one really argue that a discharge would run contrary to the public interest?"

The Crown had sought a conditional discharge and 15 to 18 months of probation for Mastantuono. Following the decision, prosecutor Émilie Robert said they felt a stronger sentence would have served as a clearer deterrent, even if she didn't gain financially.

Pleaded guilty

Mastantuono pleaded guilty to fraud and embezzlement last May. An agreed statement of facts, signed by both prosecution and defence counsels on May 13, outlines the use of two schemes to commit various offences between June 2014 and March 2016.

The first scheme involved the forgery of tuition receipts that were used to secure Quebec Acceptance Certificates (CAQs), which authorize international students to study in the province.

Mastantuono instructed staff members to forge false receipts, misleading authorities into issuing CAQs to students who didn't meet financial requirements. This scheme resulted in the issuance of 81 false receipts totalling $1,648,281.

The defence argued it was never Mastantuono's intent to "gain any money whatsoever from the arrangement" and that she instead "merely wanted to speed up the process for foreign students to receive their CAQ eligibility," according to the decision. This claim was not contested by the prosecution, Mascia said. 

The second scheme centred on the embezzlement of funds through unauthorized payments to a recruitment agency, headed by Naveen Kolan, a Toronto-based consultant with Edu Edge Inc. 

Mascia said she did not profit from this scheme and pointed out she has reimbursed the school board $73,000.

Kolan has pleaded guilty to a charge of breach of trust and is scheduled to be sentenced Dec. 20.

In an emailed statement to CBC News, the Lester B. Peason School Board said that although it was disappointed by the decision to grant Mastantuono an absolute discharge, it "is hopeful this will allow our community to move forward in the important work we do for our students."

Rising Phoenix fallout

Following Mastantuono's dismissal by the Lester B. Pearson school board in 2016, she started Rising Phoenix International, a company that helped recruit international students for private colleges in Quebec.

As the company grew, Rising Phoenix started its own college, M College, and oversaw two other colleges, CCSQ College in Longueuil and CDE College in Sherbrooke. These schools attracted hundreds of foreign students, mostly from India, who paid up to $30,000 to take various technical programs. 

During sentencing arguments, Mastantuono said the COVID-19 pandemic and the negative publicity surrounding her arrest by UPAC, made it impossible for Rising Phoenix to stay afloat.

In January 2022, Rising Phoenix shut down and filed for creditor protection. 

In December 2021, CBC News reported that dozens of students were unable to get their tuition refunded by Rising Phoenix after their student visas were delayed by the government.

Students at CCSQ College also told CBC they were pushed to pay thousands of dollars in early tuition payments. About a month later, the school closed and applied for creditor protection.

Montreal-based law firm McCarthy Tétrault was appointed by the court to represent the students' interests in the creditor protection process. But its attempt to recoup $17 million in damages for lost tuition fees ultimately failed.

In his ruling, Judge Mascia said Rising Phoenix paid $1 million dollars as required in the arrangement with its creditors.