Former accountant accused of receiving more than $6.5M in unauthorized payments

A former chartered accountant accused of receiving more than $6.5 million in unauthorized payments from his employers told a disciplinary hearing on Tuesday that he is not guilty of unprofessional conduct.

CPA Alberta, theprovincial professional organization for chartered professional accountants, received a complaint about Paul Sturt in April 2019. The complaint, which was sent by Deloitte LLP, said Sturt, who was working as the chief financial officer of Thompson Brothers Construction Limited (TBCL), had been suspended pending a forensic investigation.

Though Sturt's member registration with CPA Alberta had been cancelled the previous year due to failure to comply with professional reporting requirements, the professional organization has jurisdiction over former registrants if complaints are received within six years.

Following an investigation, CPA Alberta's complaints inquiry committee (CIC) is alleging that while Sturt was a chartered accountant, hefailed to carry out his duties with integrity and due care as an executive for four companies and as a corporate director for a fifth company.

The committee alleges he received more than $6.5 million in unauthorized payments, funds and wire transfers from six companies between 2010 and 2017.

Some of the payments were made via chequefrom TBCL to the credit of Sturt's personal tax payments account with the Canada Revenue Agency, according to the committee.

Sturt started working for the Spruce Grove-based construction company in 2006 and reported to Larry Thompson, who owned the business at the time.

In opening arguments at Sturt's disciplinary hearing on Tuesday, Julie Gagnon, a lawyer for the committee, said Larry Thompson became aware in 2017 that Sturt had taken funds from Scott Safety Supply Services Inc., a company for which Sturtserved as corporate director.

Thompson then directed two employees to investigate whether funds had been taken from the Thompson group of companies, Gagnon said.

She said Larry Thompson will provide evidence during the hearing that he did not authorize Sturt to take payments and that he did not loan or give those funds to him.

Gagnon said there is evidence that some of the funds have been repaid but amounts repaid are far less than amounts alleged to have been taken.

"We believe that the CIC will establish a pattern of him taking funds from the companies for his own benefit," Gagnon said.

Brian Beresh, the lawyer representing Sturt, said the case boils down to the relationship between Paul Sturt and Larry Thompson.

In his opening statements, Beresh said Sturt was a dedicated employee who worked 15-hour days and helped the Thompson group of companies and Larry Thompson save money in taxes.

He said tribunal members, who will ultimately decide on the matter,will hear that Larry Thompsonoften referred to Sturt as his son in public, that he said he would look after him and that he often offered him money and gave gifts or loans but had a weak memory.

"Our position at the end of the day is Mr. Sturt did nothing wrong," Beresh said.

Regarding one of the committee's allegations, that Sturt received a bonus payment of more than $1 million from Thompson LP Employee Profit Sharing Plan, Beresh said the two men had talked about and agreed upon Sturt receiving a bonus.

Beresh said Thompson knew about the bonus and signed a trust cheque for the amount.

House loan

On the second day of the hearing, Thompson employee Ian McKinley, who reported to Sturt, testified that Larry Thompson asked him and a colleague to investigate the company's records in 2017.

McKinley said he asked Thompson if he was aware of money transfers to Sturt for his house loan and the company owner responded that he was not aware of them.

McKinley said he reviewed company bank statements and records, as well as materials found in a drawer in Sturt's office, and he recognized a SIN number that was not Larry Thompson's listed in a payee section on the company's bank account website.

"This is not a payee that we set up," he told the hearing.

McKinley said Thompson did loan money to people and that from 2010 to 2017, he was aware of one loan for more than $2 million and a couple in the $200,000 range.

Beresh declined CBC's request to speak with Sturt after the first day of the hearing.

Chris Mendez, Thompson Construction Group's corporate services manager, also declined to comment.

CBC News has been unable to reach Larry Thompson for comment. Thompson Construction Group was acquired by the investment and advisory firm Hillcore Group earlier this year.

Court applications, RCMP investigation

Sturt tried to prevent the disciplinary hearing from happening multiple times.

He argued before a judge that the CPA Alberta investigation was unfair and that the organization should have considered his offer to resign as a chartered accountant without admitting wrongdoing.

A judge dismissed his application, but Sturt appealed the decision and filed a second application to prevent the hearing from proceeding.

Both his appeal and second application were dismissed earlier this year.

Court documents show that in the spring of 2019, Sturt's former employer filed a complaint against him with the RCMP.

Spokesperson Troy Savinkoff told CBC News Parkland RCMP received a report of fraud of several million dollars on May 3, 2019.

"This investigation is still ongoing," he said.

The CPA Alberta hearing continues through Friday and will resume for a week in February and four days in May.