Former children’s hospital CEO ‘ready for the fight’ in fraud case, lawyer says

HALIFAX — The former CEO of Halifax’s IWK Health Centre is “anxious” but ready to fight fraud charges, her lawyer says.

Tracy Kitch and former IWK chief financial officer Stephen D’Arcy — both of whom now live in Toronto — were scheduled to make their first appearances in a Halifax courtroom on Thursday.

As expected, neither of them showed up, leaving lawyers to speak on their behalf.

“Needless to say, she’s very anxious, but she’s ready for the fight,” defence lawyer Joel Pink told reporters afterward.

Kitch — a former executive vice-president of patient care and chief nursing executive at Mount Sinai Hospital in Toronto — resigned as the IWK’s CEO in August of last year. An independent review had concluded she owed tens of thousands of dollars for “potentially personal” expenses charged to her corporate credit card.

Kitch, who served as CEO of the children’s hospital between 2014 and 2017, was charged with breach of trust and fraud over $5,000.

D’Arcy also faces a charge of breach of trust, in addition to charges of unauthorized use of a computer and mischief to data.

“Any time there’s an allegation of public trust that’s being breached, whether it’s a hospital or any other organization, it is treated very seriously,” Crown attorney Peter Dostal said outside the courtroom.

He said Kitch and D’Arcy are facing separate charges, which means their cases will proceed separately.

“However, (the cases) are related and are both considered quite serious, given that the allegations relate to activities of people in positions of public trust. We’re taking it very seriously.”

Pink told the court he had received the Crown’s disclosure of evidence, which includes 4,500 pages of financial documents.

Saying he needed extra time to pore over the material, Pink asked provincial court Judge Anne Marie Simmons to schedule the next court date for June 2019.

However, Dostal objected, saying Pink’s review of the evidence shouldn’t take that long.

Simmons rejected Pink’s request: “I think that’s too long,” she said.

She said Kitch must return to provincial court to enter a plea on April 15, and D’Arcy must do the same on Feb. 27.

Outside court, Pink said he asked for more time because he wants a forensic auditor to examine all of the files.

“In most fraud cases, the paper trial is very important and is really voluminous,” he said. “This is a complicated one, so it just means there’s much more that we have to go through.”

Police said they launched their investigation following a complaint of financial mismanagement from the IWK board of directors on Sept. 20, 2017. D’Arcy stepped down five days later.

Kitch was arrested at her home in Oakville, Ont., while D’Arcy turned himself in to Toronto police.

Kitch was earning an annual salary of $296,289 at the time of her departure.

Earlier this month, Nova Scotia’s auditor general said he was shocked to find a lack of oversight and basic financial management controls at the hospital.

Michael Pickup released an audit report that concluded the IWK’s board of directors failed to create a culture that promoted accountability.

“The lack of adequate oversight by the board and management significantly increases the risk of fraud, theft, unauthorized transactions, inefficient spending and wasted money which the IWK Health Centre could have used for other organizational priorities,” the report said.

Pickup also found the board and management did not have a fraud policy in place.

Michael MacDonald, The Canadian Press

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