The ONSC found John Aquino (“Aquino”), former president of Bondfield Construction, and Vas Georgiou (“Georgiou”), former executive at St. Michael’s Hospital (the “Hospital”), guilty of two counts of fraud over $5,000, in connection with a $300-million hospital redevelopment project. It was held that Georgiou shared insider information with Aquino during the bidding process, thereby giving Bondfield an unfair advantage over other bidders. The judge described their actions as “overwhelming”, emphasizing that such conduct is serious in a public procurement process. The case was heard without a jury by Justice Peter Bawden of the Ontario Superior Court of Justice (Case No. CV-19-00615560-00CL).

BACKGROUND

St. Michael’s Hospital launched a major redevelopment project in downtown Toronto to expand its existing facilities. With Georgiou’s help and access to insider information, Bondfield Construction secured the construction contract. Moreover, the court found that Georgiou, who was involved in the procurement process, had aided Aquino to provide Bondfield an unfair advantage in the bidding process. The court noted that the conduct was particularly serious in the context of a regulated public procurement process.

ALLEGATIONS AND EVIDENCE

• Georgiou, who is the former CAO of the Hospital shared insider information with Aquino, thereby attempting to provide him with an unfair advantage in the bidding process for procurement of construction services.
• In one email, sent May 18, 2014, days before the deadline for companies to submit their bids, Georgiou advised Aquino to keep the Bondfield bid low by leaving out certain items. "This may be a chance to bid as low as you can and fight later in negotiations when we are No. 1," Georgiou wrote.
• There were business ties between the Aquino and Georgiou (e.g., shareholding in OTEC Research and Conundrum Solar Partners), and that Georgiou failed to disclose the conflict of interest while evaluating Bondfield’s bid.

KEY FINDINGS AND LEGAL IMPORTANCE

The court held that the procurement process was compromised. The court stated that, “the public invested a fortune in this procurement in order that it could sustain any scrutiny, and because of the conduct of the accused, we have effectively lost our money – that is a fraud on us,”. This verdict reinforces the need for higher level of transparency in public-sector procurement, particularly for large-scale projects.

TAKE-AWAYS

For Government/Public Sector Agencies:

• Stricter internal audits and regular monitoring;
• Rigorous conflict-of-interest checks and procurement transparency;
• Reinforce public trust and emphasize scrutiny over public spending;
• Create safer channel for whistleblowers to report any misconduct by any party;

For Bidders/Contractors:  

• Compliance is fundamental for the success of any project.
• A fully compliant bid, placed by gaining unfair access to confidential information may render a contract voidable and expose individuals involved to criminal liability.

These represent all material developments to date. As of the time of this article, a sentencing date has not yet been scheduled, and no further updates have been provided.