Nova Scotia

$1.3M military fraud trial involving Shearwater contracts begins

The trial of two men accused of defrauding the federal government of $1.3 million opened Monday in Halifax, with a former Department of National Defence supervisor testifying about her suspicions surrounding the awarding of certain contracts.

Pair accused of funnelling heating plant contracts at Nova Scotia base to companies connected to one of them

The Crown alleges Bry’n Ross (left) funnelled contracts to four companies associated with Harold Dawson (right). (CBC)

The trial of two men accused of defrauding the federal government of $1.3 million opened Monday in Halifax, with a former Department of National Defence supervisor testifying about her suspicions surrounding the awarding of certain contracts.

The Crown alleges Bry'n Ross and Harold Dawson conspired to funnel contracts for expensive parts for the heating plant at 12 Wing Shearwater to four companies connected to Dawson.

Ross was a civilian contracts officer at the military base outside Dartmouth, N.S., during the time of the alleged offences. The pair were charged with fraud in 2016. They have pleaded not guilty.

In his opening statement in Nova Scotia Supreme Court, federal prosecutor Mark Donohue said there are a lot of pieces to the puzzle and the Crown intends to call 50 witnesses during a trial expected to run about seven weeks.

He said the Crown will prove that during the period under investigation more than 640 contracts for parts were funneled to companies connected to Dawson: Colonial Industrial Supply, Atlantic Measurement Technologies, M.E. Robar and Harbourside Controls.

Donohue said very few competing companies were awarded contracts during the period, which stretched from April 2008 to May 2012.

Concerns about 'contract splitting'

The first Crown witness, Mary Ellen Doucet, a retired contract supervisor with DND and Ross's boss, told court she became concerned when she discovered what she thought was "contract splitting" — keeping the dollar amounts of contracts low enough that they wouldn't require competitive bids.

Doucet said policy required that any contracts worth between $1,000 and $2,500 required at least two bidders, $2,500 to $5,000 at least three, while contracts above that dollar amount would have to be dealt with at higher level in the bureaucracy.

Doucet said when she examined some of the contracts Ross had handled, she found what appeared to be similar handwriting on what were supposed to be bids from competing companies.

She said when she looked the companies up on the Nova Scotia Registry of Joint Stocks, she found Dawson was tied to all of them. Doucet told court that at that point, she brought in her supervisor and they eventually called in the military police.

Initially, four people were charged following an investigation by the military police. Charges against Dawson's wife, Kimberly Dawson, were withdrawn by the Crown last year.

Another accused, former heating plant manager Wayne Langille, has pleaded guilty to one charge of fraud and is to be sentenced later this month.

In December, Langille's lawyer, Elizabeth Cooper, asked the court for permission to withdraw from the case. Cooper said Langille was unable to pay his bills. Cooper still represents Langillet.

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Blair Rhodes

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Blair Rhodes has been a journalist for more than 35 years, the last 27 with CBC. His primary focus is on stories of crime and public safety. He can be reached at blair.rhodes@cbc.ca