CHAPTER 2: The Case of the Missing Money
Office manager Maxine Patrick left the Kamloops Blazers on Sept. 11, 2003, accused of defrauding the WHL team of hundreds of thousands of dollars.
On Oct. 7, 2003, the Blazers filed a civil lawsuit against Patrick and her then-husband, Charlie, freezing their assets, including their home and bank accounts.
According to an affidavit from then-general manager Mike Moore, Gary Gill, a partner of KPMG and senior vice-president of KPMG Forensic Inc., investigated financial transactions for the fiscal year June 1, 2002, to May 31, 2003. “It appears,” Moore stated, “that the preliminary conclusion of KPMG is that the Plaintiff has lost approximately $304,000 to this fraud in the 2002-03 fiscal year alone.”
According to Gill, his investigation discovered “there are numerous examples where a cheque stub was completed, reflecting a nominal amount of cash for supplies, petty cash and other cash requirements of the Kamloops Blazers. The cancelled cheques, however, show that the amounts withdrawn from the Kamloops Blazers’ bank account were significantly in excess of the amounts recorded in the cheque stubs and the general ledger.”
As examples, Gill attached two cheques, one dated Dec. 5, 2002, the other Dec. 9, 2002. Both were written to Maxine Patrick and signed by Patrick and team president Colin Day. The former was written for $1,750, the latter for $2,200. However, the stub for the Dec. 5 cheque shows $250 for travel expenses; the Dec. 9 stub shows $200 for P/R.
Gill’s statement also included a cheque dated Aug. 1, 2002, that was made out to Maxine Patrick for $8,700. It was signed by Day and Patrick. However, according to Gill, this was one of “a number of cancelled cheques, payable to Maxine Patrick, for which there are either no cheque stubs or the stub indicates that the cheque was voided, and which are not recorded in the general ledger.”
Another cheque that Gill said wasn’t recorded in the general ledger was dated Aug. 2, 2002, and was made out to Patrick Custom Log Homes for $3,000. It was signed by Day and Maxine Patrick.
Gill also discovered that some cheques “are recorded in the cheque stub and the general ledger as being payable to a third party, while the cheques themselves were actually issued in Maxine Patrick’s name as payee.” As an example, Gill attached a copy of cheque No. 32761, dated Aug. 15, 2002, and signed by Day and Patrick. It was made out to Patrick for $6,000 but the stub, Gill said, shows “John MacPherson as the ostensible payee in the amount of $144.” According to the stub, MacPherson received the $144 as a “refund.”
Although the Blazers were never able to recover even one penny of the missing money -- they did get $150,000 from Patrick and her then-husband through a civil suit -- Gill ascertained that “certain of the cheques were deposited” to one bank account at the Thompson Valley Savings Credit Union on St. Paul Street, two accounts at the Northills branch of TD Canada Trust, and one TD Canada Trust Visa account.
In showing that Patrick cashed some cheques and deposited others, Gill included two cheques in his affidavit.
The first, dated June 4, 2002, and made out to Maxine Patrick for $2,700, was cashed at a Royal Bank branch. That cheque was signed by Day and Patrick. According to the cheque stub, it was for $700 and went to “Colin-200, Mike-100, Don-200” for travel fund and expenses. Don most likely referred to the Blazers’ then-marketing director Don Larsen.
The other, dated Dec. 30, 2002, was made out to Maxine Patrick for $1,815.18 and was deposited in an account at the Thompson Valley Savings Credit Union. The figure on the cheque stub is $1,415.18.
Gill and KPMG staff also prepared a list of “suspicious transactions” for the period June 4, 2002, to May 30, 2003. This list shows 161 transactions -- mostly cheques with corresponding stubs -- in which the amounts on the stubs and the amounts that cleared the bank are different. For that 12-month period, the difference was $304,034.13.
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The Blazers alleged that Patrick, who had been hired in 1986 as an office assistant and was promoted to office manager on June 16, 1995, embezzled more than $1 million in a scheme that began with the theft of $6,500 in 1994-95, during that last Memorial Cup-championship season.
The Blazers, in the statement of claim that was filed in B.C. Supreme Court, claimed that Patrick, as office manager, was responsible “for bookkeeping, including the processing of all financial records and banking generally.”
“All cheques and payroll information for the Kamloops Blazers were prepared manually by Maxine,” Moore’s affidavit reads. “This resulted in significant time spent writing cheques and preparing manual payroll records for as many as approximately 60 people (during the hockey season) who are employed by the Kamloops Blazers.”
Furthermore, Moore, who holds a master’s degree in business administration, admitted that he and accountant Paul Mumford, then with KPMG, had tried “on several occasions” to convince Patrick that a contract bookkeeper should be hired to assist her. Moore and Mumford also spoke with her about “improving the technology with which she worked.”
Moore’s affidavit continued: “Maxine resisted all my attempts to bring in a dedicated bookkeeper, and resisted the advice of the technical consultant we hired to bring in the necessary software to allow computerized tracking of the cheques and books.”
The Patricks filed their statements of defence on Oct. 8, 2004.
In her statement of defence, Maxine Patrick admitted she “was hired as an Office Assistant and subsequently promoted to the position of Office Manager which included responsibilities for bookkeeping, however Maxine denies that her responsibilities included the processing of all financial records and banking generally.”
She also denied that she “acted individually or in conspiracy” with her husband “to misappropriate, embezzle or fraudulently obtain and convert monies” from the Blazers “to their own benefit.”
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Patrick had been confronted in a meeting in the Blazers’ office on Sept. 11, 2003. In attendance were Moore, Day, legal counsel Barry Carter, Bob Holden and Starr Carson, who were partners at KPMG in Kamloops, and Mumford.
According to Moore’s affidavit, Patrick “readily admitted to taking money from the Kamloops Blazers, and her comments included the following statements:
“(a) It was a sickness;
“(b) No one else was involved;
“(c) She wanted a better life for her and her family;
“(d) She had used some of the money to pay her husband’s business payroll, and that he thought it had come from her mother;
“(e) No assets were purchased with the money she took;
“(f) She did not have a Swiss bank account;
“(g) They had some equity in their home and might be able to arrange for financing to repay some of the money;
“(h) She would have to get another job in order to repay the money;
“(i) She only took money from the one main account at RBC and did not take money from the ‘US’ account or the ‘Store’ account;
“(j) That she had been doing this for more than 10 years;
“(k) That in the early years the amounts were small, but that they increased in the last couple of years;
“(l) She wasn¹t sure of the exact amounts she took but conceded that it could have been $150,000 or $200,000 in the last year; and,
“(m) She had been waiting for such a meeting to happen for four years.”
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At Patrick’s sentencing hearing on Aug. 15, 2006, she blamed alcohol, drugs and an unfaithful husband, who she claimed was having an affair with her best friend. None of those explanations appear in Moore’s affidavit.
A source has said Carter subsequently called an extraordinary meeting of the Blazers board of directors to discuss the developments. It was at that meeting where Loy Hoffbeck, in his final days as a member of the board of directors, began the proceedings that led to Day’s resignation as president.
NEXT (Jan. 14): The End of a Presidency
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