With employees alleging over $500K in unpaid wages, Addiction Canada CEO says centres will close
CEO John Haines, facing fraud, drug possession charges, cites 'economic pressures' for announced shutdown
A chain of private addiction treatment centres in Ontario and Alberta is closing under the shadow of hundreds of thousands of dollars in unpaid wage claims, and criminal charges against the company's owner.
John Haines, also CEO of Addiction Canada Inc., faces five charges, including two counts of fraud worth millions of dollars, drug possession and drug trafficking.
Haines disputes the charges.
In an email to CBC News, he says he is shutting down the company due to "economic pressures" and the "challenges of maintaining the highest standards of recovery care ... as a direct result of false and inaccurate claims."
Meanwhile, employees of Addiction Canada and a previous incarnation of the company, Vita Novus Inc., are claiming a total of $516,821 in unpaid wages with Ontario's Ministry of Labour.
'Every single paycheque was bouncing'
Greg Gemus, who was an accountant at Addiction Canada's location in Utopia, Ont., until the end of the summer, said he is owed about $4,800.
"In May or June, every single paycheque was bouncing. By the end of June, employees were owed three paycheques," he said.
Gemus said he was responsible for handling questions from employees from all of Addiction Canada's locations, and alleges he was told to put off people who were concerned about being paid, by telling them to call back the next day.
Eventually, Gemus said, "at least 50 people quit."
He said he was also told to put off vendors who were looking for payment by giving them a prepared speech.
Last year, a CBC Go Public investigation interviewed two former employees of Addiction Canada who claimed thousands of dollars in unpaid wages.
The Ministry of Labour said that in the last three years, it has received 27 claims related to unpaid wages at Addiction Canada, totalling $167,318, and 87 related to Vita Novus, totalling $349,503.
Police charge 2 Addiction Canada employees
In June 2015, Munish Malik and Richard Tucker were charged after Ontario Provincial Police (OPP) received a tip that the pair were posing as doctors at Addiction Canada's Caledon and Burk's Falls locations.
In May 2016, Haines, 51, was also charged when an OPP investigation revealed he was involved in the hiring of the men.
He now faces five charges in total: two counts of fraud over $5,000, one count of drug trafficking, one count of possession of property obtained by crime, and one count of laundering the proceeds of crime.
OPP allege Haines defrauded clients of Addiction Canada of a total of $6.1 million. They also accuse him of submitting in excess of $11,000 worth of fraudulent claims to the Ministry of Health and Long Term Care's Ontario Drug Benefit Plan.
In the email to CBC News, Haines referenced the charges, writing that he has been "challenged and publicly labelled in an unbecoming manner, along with false and incomplete accusations supported by the media."
Haines is due back in court in Orangeville, Ont., on Oct. 31 for a pretrial continuation.
Next steps for employees missing wages
In the same email conversation, Haines also offered details about the Addiction Canada closure.
"A new conglomerate is taking over the existing locations (except for a couple they weren't interested in) and are moving forward with completely new structure and management," he wrote.
He also said that all current employees will be retained.
The Addiction Canada website lists locations in Toronto, Utopia, Calgary and Edmonton.
As for current and former employees seeking missing wages, the Ministry of Labour wrote in an email that there are several ways the ministry can help after a claim is made, starting with an investigation into the company, and if wrongdoing is found, an order to pay wages.
If the wages still go unpaid, the issue is forwarded to the Ministry of Finance for collections.
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However, the government still encounters substantial difficulty getting money back.
In a report released last year by the Workers Action Centre, it said that "on average, 25 to 30 per cent of unpaid wages confirmed through claims (not including bankruptcies) do not get collected for workers."