Canadians DO Embezzle — BC’s Kim Stephens Gets Convicted

Kim Stephens

Kim Stephens, of British Columbia was recently convicted for “fraud over $5,000,” which is the most serious fraud offense in Canada. Kim was sentenced to 12 months of house arrest, a further year of probation, plus was ordered to pay restitution of $95,324 to a victim of her crime. Kim also has a prohibition against handling money or monetary instruments in the course of her work.

Kim has worked in several dental practices in the Vancouver area, and her employment has generally not ended in a positive way. She also worked for a time as a consultant offering services to dentists.

Prosperident’s Senior Fraud Examiner Dr. Pat Little performed the investigation leading to the conviction of Ms. Stephens.

This is a good reminder to observe our usual cautions about checking with former employers before hiring.

To watch a webinar on how to properly vet staff before hiring, click on the link below.

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Ontario woman charged with felony embezzlement




Fraud arrest

The Guelph Police Fraud unit investigation around a reported fraud that was occurring between November 2012 and August 2014 has led to charges.

It is alleged that an employee of a Guelph area business had misappropriated over $5,000 during that time frame into her own accounts.


On March 10, 2016 she was arrested.

Siobhan McLaughlin, 40 years of Guelph has been charged with fraud over $5,000, theft by person required to account, obtaining execution of valuable security by fraud and utter forged document.

She will appear in court on April 29, 2016.

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Nova Scotia woman sentenced to 12 months in prison for embezzling $103k


Teresa Marie Cox-Kubas, 39, stole $103,293.06 from Dr. Robert Rix through hundreds of transactions over a four-year period. She was sentenced in November 2005 to one year in jail followed by two years of probation

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Former UBC Dentistry faculty member misused funds for personal gain, university says

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The University of British Columbia alleges a former member of its faculty of dentistry “personally inappropriately enriched himself” when he was involved in a pilot project aimed at improving dental service in Haida Gwaii.

The federal government filed a lawsuit against the university and the former faculty member, Christopher Zed, in B.C. Supreme Court last November over the alleged misuse of millions of dollars in funds. Its allegations have not been proven. Criminal charges have not been laid.

The university, in its response to the federal government’s claim, said it was not unjustly enriched by the project. The federal government, through Health Canada, helped UBC establish the two dental clinics in Haida Gwaii.

“UBC acknowledges that Dr. Zed personally inappropriately enriched himself during the period in which he was involved in the project,” the university’s response to the civil claim says. “However, UBC says that Dr. Zed’s enrichment was to the loss and detriment of UBC, and not Health Canada.”

The university said Dr. Zed “breached his fiduciary duties to UBC” between 2002, when bank accounts for the clinics were opened, and 2013, when the project wrapped. It said he “incurred inappropriate or excessive expenses and diverted funds generated by the project to the use and personal benefit of Dr. Zed and others.”

However, the university said Dr. Zed and the others – who were not named – subsequently repaid a portion of the funds.

The university also took issue with a couple of the federal government’s specific allegations around money. First, it said a reference in the lawsuit to Dr. Zed making a $1.2-million deposit to his personal bank account in 2011 should have instead said he deposited that money to the clinic accounts.

Second, it said Health Canada mistakenly concluded $5.1-million was used by Dr. Zed for his personal benefit when that amount included “valid expenditures to deliver dentistry services.”

Dr. Zed has not filed his response to the federal government’s claim. However, he did file a response in April to another lawsuit brought by the Skidegate Indian Band. In that document, Dr. Zed denied he was unjustly enriched by the project. He could not be reached for comment Wednesday.

The university’s response was filed in late June but does not appear to have been previously reported.

The Skidegate Indian Band filed its lawsuit against the university, Dr. Zed, and the federal government in February. It alleged funds it should have received instead went to the university and Dr. Zed.

Dr. Zed, in his response to that lawsuit, denied the band had suffered any loss or damage and said it had no claim against him.

The RCMP has said it is investigating allegations of financial improprieties at the university’s faculty of dentistry, but a police spokesperson did not respond to a message seeking comment Wednesday.

A UBC spokesperson said she could only disclose Dr. Zed is no longer a university employee and was with the faculty of dentistry from September, 1995, until December, 2013.

Dr. Zed was formerly the associate dean of strategic and external affairs with the faculty of dentistry, as well as clinical professor of dentistry.

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Troubled Vancouver dentist faces new lawsuit

Saskatchewan dental assistant submits false insurance claims, steals gold from practice


A dental assistant who practiced in Swift Current was recently expelled from the Saskatchewan Dental Assistants’ Association.

Tanis Martens entered guilty pleas of professional misconduct to a hearing in front of the Discipline Committee over the phone on May 9th, 2015, for infractions she committed in a Swift Current business dating back to November 2012 to August 2013.

Martens was charged for fraudulently submitting claims for reimbursement in relation to dental work that had not been performed and fraudulently deposited the cheques as a result of the non-existent insurance claims between November 1st 2012 and August 29th 2013. Martens also plead guilty to unlawfully removing and wrongfully converting gold between May 1st 2013 and May 30th 2013.

“Our process is that when a complaint comes in, as a self-regulating health organization, we are required to investigate it, so any complaint is documented and then forwarded to a professional conduct committee. That committee meets and holds interviews and they determine whether there is sufficient evidence to warrant a professional discipline committee meeting. When notices are served and the Disciplinary Committee meets and the charges are heard, the member has the opportunity to enter a plea,” said Executive Director Registrar of the SDAA, Susan Anholt.

“In this instance the member entered a guilty plea. The council for the professional conduct committee lays forward the case and the Discipline Committee considers it and rules on it, and they felt that there was sufficient reason to expel her for a certain length of time. There is a potential to reapply after five years, but the member actually has to reimburse the cost of the investigation and the hearing,” she said.

In the summary document of the final decision, members of the Discipline Committee said that she abused a position of trust, and that “Martens committed both theft and a repeated series of frauds. She misrepresented herself in calls to the insurer. She not only did not admit the misconduct at first, but also implicated other workers.”

“There’s a lot of trust in the healthcare professions and when trust is breached, it really has a significant impact on the whole profession,” added Anholt. “The profession very much says we want to be honorable healthcare providers, and it’s just something that we want our members to understand that this is inappropriate and unacceptable.”

The decision was made on June 17th, 2015, and Martens must reimburse the SDAA $24,733.25 if she wishes to reclaim her license.

No criminal charges were filed against Martens.

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Convicted Nova Scotia thief asks judge for longer jail term to address gambling addiction

debbie rushtonA Nova Scotia woman who is addicted to gambling on video-lottery terminals has been sentenced to two years in jail for stealing from her employers.

Court heard that Debbie Rushton stole more than $230,000 from T. A. Orthodontics and Donford Enterprises of Truro, N.S.

The 45-year-old woman from nearby Debert, N.S., pleaded guilty to theft and fraud charges in January.

During her sentencing hearing yesterday, the Crown and the defence detailed Ms. Rushton’s addiction to VLTs.

Ms. Rushton stole the money over a seven-year period to obtain money for her gambling habit, court was told.

Judge John MacDougall initially imposed an 18-month sentence in a provincial jail.

But he increased the sentence at Ms. Rushton’s request because she wants to get access to rehabilitation services available at federal prisons.

Evidence presented to the court stated the woman was working overtime when she made many of her thefts.

Ms. Rushton stayed late many nights at the orthodontist’s office manipulating the books so the doctor wouldn’t know she was stealing from him.

Judge MacDougall heard in provincial court that Donald Johnston noticed she was working late and decided to pay her an extra half-hour per day. “A nice little bump up, given she was using the extra time to steal from her employer,” the judge said.

Nearly $220,000 was taken in more than 700 transactions, and it cost nearly $20,000 for a forensic audit to uncover the theft from T. A. Orthodontics.

A further $11,641 was taken from the associated company, Donford Enterprises Ltd., and it took another $3,500 in audit costs to uncover that theft.

Ms. Rushton secured a loan from her mother and paid $40,000 in restitution.

Defence lawyer Jill Nette told the court that Ms. Rushton had done extensive research and knew that there were more programs available in federal prison for her gambling addiction than she could find in a provincial institution.

Ms. Nette argued that Ms. Rushton used the money to feed an uncontrollable VLT addiction.

“All the money she had went to gambling,” Ms. Nette said.

“It was not uncommon for her to gamble $1,000 per week.”

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Judge agrees to woman’s request for longer jail term

A woman in Truro, N.S., made an unusual request Thursday: she asked for a longer jail term. Debbie Rushton, 45, of nearby Debert, had already pleaded guilty to stealing more than $230,000 from her former employer over a seven-year period, and the judge initially sentenced her to 18 months in a provincial jail. When her lawyer, Jill Nette, explained that Rushton was addicted to video-lottery gambling, and would only get proper treatment for it in a federal prison, Judge John MacDougall agreed to her request for a two-year sentence, which would automatically send her to a federal institution. “She had done some research, and satisfied herself that the federal institution would provide better services and better rehab, rehabilitation services for her particular problem,” Nette said. During her sentencing hearing Thursday, the Crown and the defence both detailed Rushton’s addiction to VLTs. The court was told Rushton stole the money over a seven-year period to get money for her gambling habit. “All the money she had went to gambling,” said Nette. “It was not uncommon for her to gamble $1,000 per week.” Rushton stayed late many nights at the orthodontist’s office where she worked, manipulating the books so her employer wouldn’t know she was stealing from him, the court was told. Elizabeth Fry Society addictions counsellor Jeanette Milley said Thursday she is seeing an increase in the number of women with gambling addictions who are getting in trouble with the law. “The VLTs especially, we notice a marked increase in, where women are self-medicating with the use of VLTs, and it’s increasing, year by the year, the number of women who seek our help,” Milley said. Milley says she expects to see more cases of women choosing longer sentences, because often the only way to get in-house treatment for their problems is in a federal institution. Content retrieved from

An oldie but a goodie — British Columbia’s ELIA KRATKY embezzles $436k from three dental offices; receives conditional sentence


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                     Reasons for Sentence

                     Mr. Justice Curtis

                       October 8, 1997

                    HER MAJESTY THE QUEEN


                        ELIA KRATKY

Counsel for the Crown:                          Mr. Carstairs

Counsel for the Defendant:                        Mr. Gibbons

                                                   Mr. Fowler

[1]  THE COURT:  Elia Kratky has pleaded guilty to three counts of fraud.  She admits that using her position as a part-time manager and bookkeeper for three local dental clinics, she defrauded the clinics and the nine dentists involved of a combined total of $436,535 between January 1, 1991 and March 31, 1995.

[2]  Ms. Kratky’s fraud was discovered in March 1995 when a departing employee informed the dentists at the Capilano Centre that Kratky was not accurately preparing daily bank deposits and other bookkeeping entries, and an investigation was started.  Kratky’s employment was terminated and it was discovered that Kratky had, by various means, taken substantial amounts of money.  She took cash which she was supposed to have deposited for the clinics.  In the guise of paying legitimate clinic accounts, she used cheques to transfer money to herself.  She also altered the payees on some cheques to deposit money to her own credit.  She manipulated financial books and records in her control to hide her misappropriations.

[3]  Ms. Kratky is 52 years of age and married with an adult daughter.  She has a grade 10 education.  Her previous criminal record is a conviction in 1979, when she was 34, for three counts of theft over $200, for which she received a suspended sentence and 12 months probation.

[4]  The dentists who were defrauded commenced two civil actions against Elia Kratky and others, including her husband.  These actions have resulted in a settlement in which a consent order has been entered requiring Ms. Kratky to pay the principal sum of $828,000, prejudgment interest of $145,065.90, and punitive damages of $60,000, plus special costs and disbursements.  Of this amount, $608,662.41 has been paid by the disposal of assets of Ms. Kratky and her husband, as documented in the defence exhibit.  Accordingly, Elia Kratky and her husband have repaid the amount of the fraud admitted in these proceedings, and more.

[5]  The nine dentists defrauded have suffered financial loss, and as documented in their victim impact statements, personal turmoil and a profound feeling of betrayal.

[6]  Subsequent to the discovery of her fraud, Elia Kratky has been hospitalized for depression.  She is currently under the treatment of Dr. Eaves, a psychiatrist whom she sees once a week.  It is Dr. Eaves’ opinion that she remains deeply depressed and has recurrent suicidal ideation.  Dr. Eaves states that she acknowledges what she has done was wrong and is extremely remorseful, although I note one of the dentists, in his victim impact statement, states that Ms. Kratky gave no apology and no explanation for her actions throughout the civil suit taken against her.

[7]  In these proceedings, in addition to pleading guilty, she waived the preliminary hearing.  Mr. Carstairs, on behalf of the Crown, submits that 18 months to two years less a day is the appropriate range of sentence.  He specifically advised me that I must consider the provisions of the Code relating to a conditional sentence in this case, but stated the Crown takes no position on whether a conditional sentence should or should not be imposed.

[8]  Mr. Gibbons, for Ms. Kratky, does not take issue with the range of sentence suggested by the Crown, except to the extent that he suggests 12 months may be appropriate, but urges me to make any sentence a conditional one.

[9]  The purposes and principles of sentencing are set out in the Criminal Code.  S. 718 of the Criminal Code states:

The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:

a)to denounce unlawful conduct

b)to deter the offender and other persons from committing offences

c)to separate offenders from society where necessary

d)to assist in rehabilitating offenders

e)to provide reparations for harm done to victims or to the community, and

f)to promote a sense of responsibility in offenders and acknowledgement of the harm done to victims and to the community.

[10] S. 718.1 states:

A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.

[11] S. 718.2, insofar as it applies to the circumstances of this case, states:

A court that imposes a sentence shall also take into consideration the following principles:

a)a sentence should be increased or reduced to account for any relevant, aggravating or mitigating circumstances relating to the offence or the offender, and without limiting the generality of the foregoing evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim shall be deemed to be aggravating circumstances.

b)a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.

c)where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh.

d)an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances, and

e)all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the circumstances of aboriginal offenders.

[12] S. 742.1 of the Criminal Code of Canada states:

Where a person is convicted of an offence, except an offence that is punishable by a minimum term of imprisonment and the court:

a)imposes a sentence of imprisonment of less than two years, and

b)is satisfied that serving the sentence in the community would not endanger the safety of the community and would be consistent with the fundamental purpose and principles of sentencing set out in s. 718 to 718.2

the court may, for the purposes of supervising the offender’s behaviour in the community, order that the offender serve the sentence in the community subject to the offender’s complying with the conditions of a conditional sentence order made under s. 742.3.

[13] The imposition of conditional sentences has recently been given extensive consideration by the Court of Appeal in this province in the case of Regina v. Ursal et al.  At page 49 of the Ursal decision, Justice Ryan states:

Accordingly, when asked to consider imposing a conditional sentence where the Code does not mandate a minimum sentence, the judge must first consider whether a sentence of less than two years is appropriate in the circumstances.  If the trial judge determines that a sentence of imprisonment of less than two years is fitting, he or she will then go on to consider the type and length of sentence, taking into account the requirements of s. 742.1(b) and the principles and objectives of sentencing.  If the trial judge decides to impose a conditional sentence, the trial judge will bear in mind, in determining the length of the sentence, that while a community sentence may not be as severe as a jail sentence, a community sentence will be unaffected by parole as long as the offender remains in the community, and that if revocation should occur, the offender will serve some or all of the sentence in jail.

[14] I accept the submission of Crown counsel that the appropriate range of sentence for this case is 18 months to two years less a day.  I am satisfied that Ms. Kratky would not endanger the safety of the community if she were to serve her sentence in it.

[15] The remaining question therefore is whether a conditional sentence would be consistent with the fundamental purpose and principles of sentencing as set out in the sections to which I have just referred.  Although it is not possible to be certain a person will not repeat their offence, I think it unlikely that Elia Kratky will do so.  Accordingly, the only two purposes of sentencing that might not be met by a conditional sentence are those of denouncing unlawful conduct and deterring others.

[16] A conditional sentence imposes substantial restraint upon the liberty of the offender.  It is not subject to parole and therefore must be served in full.  Jail sentences for offenders like Ms. Kratky are frequently served on electronic monitoring and often reduced to one-third of the sentence through mandatory supervision and parole.  The practical reality is that while a jail sentence may sound more severe, a conditional sentence in totality may be equally or significantly as severe as the jail sentence.

[17] I am satisfied that in this case the principles of denunciation and general deterrence, along with the other principles of sentencing, can reasonably be served by a conditional sentence of 18 months.

[18] Elia Kratky, would you stand, please.  On each of counts 2, 4 and 6 to which you have pleaded guilty, I sentence you to serve a conditional sentence in the community, the conditions of which sentence are as follows.  You shall keep the peace and be of good behaviour; appear before the court when required to do so by the court; report to a supervisor within two working days and thereafter when required by the supervisor and in the manner required by the supervisor; remain within the jurisdiction of the court unless written permission to go outside that jurisdiction is obtained from the court or the supervisor; notify the court or supervisor in advance of any change of name or address; and promptly notify the court or the supervisor of a change of employment or occupation.

[19] In addition, you shall abstain from the consumption of alcohol or other intoxicating substances; attend a psychiatric treatment program as directed by Dr. Eaves or your supervisor; and comply with the following terms which I consider desirable to secure your good conduct and prevent the commission of other offences.  Seek and maintain gainful employment; advise your employer of your conviction for these offences; be in your residence at 6635 Wade Road, Delta, between the hours of 7:00 p.m. and 7:00 a.m., except for the purposes of employment or medical treatment; and for the purpose of ensuring your compliance with these conditions, authorize your supervisor to attend and enter your residence at any time.

[20] You shall receive a copy of this order. Under s. 742.4 of the Code, your supervisor may propose changes to the conditions I have ordered. Under s. 742.6, should you breach any of these conditions, you may be charged with doing so, which could result in the conditions being changed or your serving the rest of the sentence in jail.

[21] The sentences imposed on all three counts are to be served concurrently, that is, at the same time.  You may sit down, ma’am.

                             “V.R. Curtis, J.”                

                             The Honourable Mr. Justice V.R. Curtis

Ontario dental embezzler convicted of other fraud using 60 stolen identities


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Update June 19, 2017

Sources tell us that Irina Chernyakhovsky was convicted of the fraudulent acts described in the article below and was sentenced two two years of house arrest.  We are also told that she breached the conditions of her house arrest and most likely will be going back to prison for committing the breach.

Irina  Chernyakhovsky (who also goes by the name Irina Fooks) was convicted of embezzling from several dental offices (see and )


Early in 2016, she was arrested and accused of fraudulently collecting government benefits in excess of $200,000.

What it interesting here is the comment made by someone using the name Irina Fooks (who appears to be the same Irina Fooks) below the story.

Two Alberta Dental Clinic Employees Charged With Fraud

Joanna Ridley

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Medicine Hat, AB: Following a seven month long investigation, the Medicine Hat Police Service Major Crimes Section has charged two Medicine Hat residents with Fraud Over $5000. The charges are in relation to a complaint received from the Crestwood Dental Clinic. Both of the individuals charged were employees at the clinic during time of the fraud which took place in 2014 and amounted to losses in excess of $80,000. The funds were not recovered. Matthew Ridley, age 43, has been charged with three counts of Fraud Over $5000 and appeared in court on November 4, 2015. Joanna Ridley, age 41, has been charged with one count of Fraud Over $5000 and is due to appear in court November 25, 2015. The victim of the fraud in this file was the Crestwood Dental Clinic business and not the individual patients of the clinic.

Update: 10/20/2016

Former dental employees will go to fraud trial in April The trial for two former employees of a city dental clinic facing serious fraud charges has been set for early next year. The four-day trial for Matthew and Joanna Ridley was set Tuesday at the Medicine Hat Courthouse for April 10-13.
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