Former LCBO employee pleads guilty to $2.7m fraud

Former LCBO employee pleads guilty to $2.7m fraud

Former LCBO employee pleads guilty to $2.7m fraud

An LCBO employee in charge of ordering alcohol for diplomats has pleaded guilty to defrauding the Crown corporation of almost $3 million in alcohol and cash.

Francois Agostini ran the diplomatic sales program for Toronto, which involved placing heavily discounted orders for diplomats. The program operated on an “honour system,” according to court documents. From 1989 to 1998 Agostini ran it honestly, but starting in 1998 he began placing false orders and falsifying documents to take liquor home for himself, friends and family.

In some cases he lowered the cost of products and pocketed the difference, or failed to record all or part of the payments in his handwritten ledger, according to the agreed statement of facts.

An anonymous tip to the LCBO lead to an investigation and the eventual termination of Agostini’s employment in January 2012. He had worked at the LCBO for 31 years and was making $54,778 a year at the time.

A forensic audit pegs the loss to the LCBO in the range of $2 million and $2.6 million. The LCBO has also had to pay $134,000 in taxes due to some of the fraudulent transactions.

A search of Agostini’s home found a stash of $500,000 in cash and a $2,800 bottle of cognac. A total of $628,829 has been repaid to the LCBO, according to the agreed statement of facts. Other assets seized may also go toward restitution.

The LCBO alleges that Agostini showered his wife with lavish gifts and gave acquaintances large sums of cash. The allegations in the lawsuit have not been proven in court.

The case serves as a caution to employers who are relying on similar honour systems around desirable items. While organizational trust is important, a system of checks and balances protects employees as well as employers.