Vas Georgiou, top, and John Aquino, bottom.The Globe and Mail
The criminal trial of two men at the centre of corruption allegations stemming from the $300-million redevelopment of Toronto’s St. Michael’s Hospital begins this week, but with fewer charges than originally laid by police.
Vas Georgiou, the former chief administrative officer at St. Michael’s, and John Aquino, the former president of Bondfield Construction Co. Ltd., are scheduled to appear before an Ontario court judge in Toronto on Monday.
Both men are pleading not guilty to charges of fraud, which stem from allegations that they improperly communicated throughout the bidding process for the hospital contract, which Bondfield won in 2015.
They were each charged in March, 2023, with two counts of fraud over $5,000, as well as one count of bribery, which is known in the federal Criminal Code as paying or accepting secret commissions. Earlier this year, prosecutors dropped the secret commission charges, acknowledging in court that they could not meet the “high bar” of proof beyond a reasonable doubt.
Peter Brauti, Mr. Georgiou’s lawyer, said in an e-mail that no evidence will be heard on Monday and that the matter is expected to be adjourned to Friday. He said his client “denies the allegations, but will not comment further while the matter is before the courts.”
Alan Gold, a criminal lawyer representing Mr. Aquino, did not respond to a request for comment.
The indictment against the two men followed a four-year probe by Ontario’s Serious Fraud Office – a group of police officers and prosecutors launched in 2018 to investigate alleged financial crime.
The case dates back to 2015, when Bondfield, a once prominent Ontario construction company, was selected as the winning bidder to redevelop St. Michael’s, one of Canada’s premier health care facilities. A series of Globe and Mail stories published in 2015 and 2016 revealed that while Mr. Georgiou was working as one of the evaluators on Bondfield’s bid for the $300-million project he was personally involved in two businesses owned by Mr. Aquino. After launching an internal investigation, the hospital fired Mr. Georgiou in 2015, alleging his business ties with Mr. Aquino weren’t disclosed.
Since then, the project has fallen into disarray and is years behind schedule. Bondfield sought bankruptcy protection in 2019, leaving the company’s multinational insurer, Zurich Insurance Co. Ltd., to assess claims from Bondfield’s unpaid subcontractors. Zurich had provided more than $1-billion in guarantees – known as construction surety bonds – on Bondfield’s projects, including St. Michael’s. The Surety Association of Canada has said the losses from Bondfield’s collapse are the most severe in the association’s recorded history.
Once installed at Bondfield’s headquarters, Zurich alleges it unearthed evidence that Mr. Aquino and Mr. Georgiou communicated with each other about the bid during the procurement process. Zurich’s investigation found that Mr. Georgiou was given his own bondfield.com email address, bccldevelopment@bondfield.com, and the insurer alleges Mr. Aquino supplied Mr. Georgiou with a secret BlackBerry.
Zurich sued both men, as well the hospital, alleging Mr. Georgiou used the BlackBerry to leak confidential information about the procurement to Mr. Aquino.
The insurer’s investigation also revealed that in September, 2015, Mr. Aquino asked Bondfield’s IT staff to permanently wipe all references to Mr. Georgiou from the company’s e-mail server. An estimated 5,000 e-mails were destroyed just days before The Globe published its first story about the business ties between Mr. Georgiou and Mr. Aquino.
The lawsuit launched by Zurich also alleges that Bondfield staff performed hours of work at Mr. Georgiou’s house in North Toronto. This allegedly included landscaping his yard, demolishing his driveway, carpentry inside his residence and work on his gazebo.
When the insurer’s lawyers examined Mr. Georgiou in 2020 about the home renovations, he declined to answer most questions – with one exception. Asked about a 2013 e-mail from Mr. Aquino, which showed Bondfield replaced eight dead trees on Mr. Georgiou’s property, Mr. Georgiou replied, “I paid for those trees,” according to transcripts filed in court. He explained that he paid Mr. Aquino in cash and sports tickets.
When police charged the men in 2023, Mr. Georgiou and Mr. Aquino each faced one count of paying or accepting secret commissions, as well as the fraud charges. At the request of prosecutors, however, Ontario Superior Justice Peter Bawden agreed to withdraw the bribery charges during a brief hearing on Feb. 26.
“The Crown has been of the view that we cannot meet the high bar of proof beyond a reasonable doubt on the secret commissions,” said Crown counsel Ellen Weis, according to a transcript of the hearing.
The fallout from Bondfield’s collapse has left the hospital redevelopment project seven years behind schedule.
The entire project, which includes a new 17-storey patient care tower, as well as an expanded emergency department and a fully renovated intensive-care unit, was initially set for completion in 2019. The renovations are now “anticipated to be complete in 2026,” said Sabrina Divell, a spokesperson for Unity Health Toronto, the hospital network that includes St. Michael’s.
Ms. Divell said the hospital has fully co-operated with the investigation by the Serious Fraud Office.
Special to The Globe and Mail