DRS Construction sues Ottawa Hospital for $1.5M
DRS Construction, 4 other companies, accused in fraud scheme with 2 former hospital directors
A construction company accused in an Ottawa Hospital lawsuit that claims former directors and contractors conspired to defraud the institution filed its own lawsuit against the hospital for nearly $1.5 million two months ago.
- Ottawa Hospital sues former directors, contractors
- Ottawa Hospital refers audit to police, launches civil suit
DRS Construction (incorporated as 1436937 Ontario Inc.) accuses the hospital of refusing to pay invoices for completed work and breaking contracts that could have otherwise been filled by other work opportunities.
The accusations are contained in a 13-page statement of claim filed in French in November, and amended in December.
But on Jan. 5, the Ottawa Hospital accused the company and its director Gerry Dubé of giving kickbacks to two former directors, who were in charge of large budgets and projects, in exchange for "improper influence" over bidding and tendering, as well as charging inflated prices for services.
In its statement of claim, the hospital accused Dubé of providing home renovation services and cars from his automotive business to the former hospital directors at "below cost or at no cost."
The hospital accuses Frank Medwenitsch, the former director of planning and capital projects with a signing authority of $100,000, and Brock Marshall, the former director of engineering and operations responsible for procuring contractors, of fraud, embezzlement and misappropriation of funds. Neither remain employed by the hospital.
Hospital accuses 4 other companies
The Ottawa Hospital launched an external audit in 2015 after noticing irregularities in its planning and facilities department. It said in a statement on its website that it has referred the case to police.
The other contractors named in the hospital's statement of claim are:
- Federal Electric and its director Larry St. Pierre. According to the statement of claim, Federal Electric was prequalified on the hospital's list of electric contractors for projects up to $7.5 million.
- GAL Power Systems Ottawa and its director Guy Adrian Lapierre.
- Pro Management Construction, Ottawa Diamond Construction and Roch St-Louis, who is the director of the former and operator of the latter.
The statement of claim describes emails in which Medwenitsch taunts Marshall about more than $100,000 worth of work on his home, as well as "more skeletons," in order to get him to sign off on "unsupported and improper" invoices dating back to 2010.
None of the allegations has been proven in court.
The Ottawa Hospital has faced $80 million in cuts over the same period covered by the allegations, said Rob Driskell, the president of the hospital's union, to CBC News in an email.
"Allegations of corruption and kickbacks are bad enough, but it's outrageous that this appears to have happened at the same time as the Ottawa Hospital has been making drastic cuts to care hours and staffing," Driskell said.