Norman Wells suing former SAO, alleging $1.2M used for personal gain

A forensic audit that looked into how much Catherine Mallon was paid and what she bought while working for the town says more than $1.2 million of the town's assets were 'inappropriately converted... for her own use.' 

Council ordered audit after former employee noticed abnormalities on T4

The current town council, which was elected in October 2018, ordered a forensic audit after years of allegations against the former city council and management, citing wrongful dismissal and a toxic work environment. (Katie Toth/CBC)


A story published on Nov. 24, 2020, identifies the forensic audit referred to in this story as a draft report.

The mayor of Norman Wells says his town is filing a lawsuit against its former senior administrative officer after a forensic audit, alleging she "converted" more than $1.2 million of town assets for personal use.

Mayor Frank Pope says the audit was ordered after a former administrator noticed Catherine Mallon's 2016 T4 said her salary was double or possibly triple what it should have been. 

The audit looked at payroll and certain town expenditures with a focus on Mallon's expenditures, according to the deputy minister of the N.W.T. Department of Municipal and Community Affairs, Eleanor Young, who helped facilitate it.

"I can't even get into any particular [purchase] other than there was use of the town credit card outside the country," Pope said. "And I'll leave it at that." 

Misplaced money is just one of many concerns raised by former employees of the town. In October 2017, the N.W.T. government dissolved town council and appointed an administrator to handle the town's business after receiving complaints about alleged conflicts of interest, breaches of confidentiality and failure to follow legislation and council procedures.

The audit, which was conducted by EPR Consulting, covered the period from the fall of 2015 to the fall of 2018. Its results were discussed at a public meeting in Norman Wells Wednesday.

'Fraudulent scheme'

Pope says Mallon was the only one who used the specific credit card that included out-of-country purchases within the period of time the audit covered. The town is suing Mallon for fraud, along with Nathan Watson, who was mayor at the time.

"We're alleging that Nathan worked and participated in Mallon's fraudulent scheme," Pope said.

Norman Wells mayor Frank Pope says there's enough evidence from the forensic audit for the town to go ahead with a civil suit against former SAO Catherine Mallon and former mayor Nathan Watson. (Radio Canada)

"He allowed it to happen and he was the mayor. He was responsible to the electorate of this community and did not fulfil his duties."

Pope added that no other former or present council member or town employee is being sued.

Watson was shocked when a CBC reporter told him about the findings of the audit, and said he has not yet been served with the suit.

"That is ludicrous and I'm tempted to say... libelous and shocking and very upsetting," he said. 

"I'm going to categorically deny it right now for you. This is the exact opposite of what happened. I did more as mayor in 18 months than I think anyone ever did."

Watson says while he and Mallon worked for the town, they found millions to pave the streets and fix the sewage system. 

Nathan Watson was mayor of Norman Wells when the N.W.T. government dissolved council in October 2017 after receiving complaints about alleged conflicts of interest, breaches of confidentiality and failure to follow legislation and council procedures. (Submitted by Nathan Watson)

And he says Mallon was always looking for ways to cut costs, which included buying office supplies and other necessities for the town in southern Canada or even when she visited family overseas.

Watson says Mallon worked hours of overtime and didn't always get paid on time and that's why the T4 from 2016 would have shown more than her annual salary.

"She went above and beyond what she had to do," Watson said.   

CBC reached out to Mallon via email. She did not respond as of publication. Watson said he would also reach out to her.

Written by Alyssa Mosher, based on interviews by Katie Toth