British Columbia·Sticky Fingers

'It's a betrayal': Fraud kills trust and leaves victims reeling

Most cases of the crime revolve around trust: how trust is broken by the perpetrator and misplaced by the victim.

It can take years before a workplace recovers, says psychologist

Forensic accountant Marilyn Mellis said the one thing she has learned from her work is not that "people are awful," but that "people are vulnerable." (CBC)

The Okanagan may be associated with high temperatures and lots of tourism, but it's also plagued with white-collar crime.

Statistics Canada found in 2017, that the average fraud rate for most areas of the country is about 300 incidents per 100,000 people, but in three Okanagan cities it's much higher. In Penticton it is 461, in Kelowna 592, and in Vernon 706 incidents per 100,000 people.

Most cases of the crime revolve around trust: how trust is broken by the perpetrator and misplaced by the victim.

Kelowna-based forensic accountants Glen Jackson and Marilyn Mellis both point out that if businesses want to protect themselves, it's not enough to just trust your employees without having any checks and balances in place.

"Especially in the Okanagan Valley, there's not a lot of big companies here. It's a lot of family-run companies ... and so they are so trusting of their people, especially long-term employees," said Mellis.

Long-term employees in particular gain a lot of trust because many people in the workforce don't stay with the same company for extended periods of time anymore, she told Daybreak South host Chris Walker.

"So it's a betrayal, and they have put so much trust in that person that they're doing the right thing."

Broken Trust

It's not always just the employers who feel their trust has been broken, but it can also be the colleagues of the fraud perpetrator.

In a case currently in civil court, Kelowna agency Access Human Resources, alleges its former bookkeeper, Carey Earl, defrauded the company of nearly $1.8 million between 2005 and 2018.

Angie Ludvigsen, quality services co-ordinator for the agency, said in an email to CBC that Earl had built relationships with many of the people who worked there and "was like a mother to some."

"Her actions left us saddened, angered and wondering who were we really working alongside all these years. We look forward to the RCMP completing their investigation and to all persons involved being held accountable in a correctional facility where they belong," she said.

'Years of grief'

Michael Woodworth, a professor and clinical psychologist at the University of British Columbia's Okanagan campus in Kelowna, said victims of the crime often question their trust — not only in other people — but also in their own judgement. 

"It's not uncommon at all that companies and organizations are going to be completely destroyed by the behavior and or personality of one individual that manages to embed themself in the company," said Woodworth.

"They can cause years of grief."

"Don't trust anybody. I know that sounds harsh, but a lot of times the people who are committing these internal type of frauds and thefts are super well-liked," said Const. Ann Donnelly. (Submitted by Kelowna RCMP)

Kelowna RCMP fraud investigator, Const. Ann Donnelly, has been trying to show the impact this grief has on victims in the courtroom.

When she first started her position, she said the courts viewed fraud as a victimless crime.

"My goal is to show the personal side, because it's huge. You might say it's just money, but it's people's lives, people's businesses," said Donnelly. "It's their life's work sometimes going down the tubes."


Donnelly warns that business owners shouldn't trust anyone, and that often times the perpetrators are very well-liked.

"You trust them implicitly and that's the downfall. They take advantage of that," she said.

Meanwhile, Jackson believes that you can trust people, but it's important to have verification processes put in place.

"When it comes to financial fraud, the tone is set at the top and it has to come down. The organization, the people at the top, the board of directors have to be clear that financial fraud is not tolerated, that they trust their employees, but there will be a verification and those internal controls must be followed," said Jackson.

"It's absolutely essential, and that should be a requirement of any employee."

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. 

In 2017, Statistics Canada found that the rate of fraud in some Okanagan cities was nearly double the national average. This series explores some of the reasons fraud is so prevalent in the region and takes a look at a few of the local cases making headlines. 7:46

With files from Chris Walker, Christine Coulter and Daybreak South.


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