A Burnaby co-op defrauded by its former president of more than $2 million has successfully sued the bank that let her deposit bogus co-op cheques into her personal account for five years.
Lillian Cameron was a long-time resident of the Halston Hills Housing Co-op on Horne Street and its president from 2008 to 2016, according to facts presented in court in 2020.
In November 2016, she walked into the Burnaby RCMP detachment and announced she was turning herself in for stealing hundreds of thousands of dollars from her co-op.
Her bank had told her it was launching an investigation into large sums of money deposited into her account by cheque, she said, and she knew the jig was up.
Cameron initially claimed she had stolen only about $500,000 over an 18-month period and lost all the money gambling.
But a police investigation eventually revealed Cameron had stolen $2,054,228.68 over about five years by writing out co-op cheques to various contractors based on fake invoices and then depositing the cheques in her own account.
After pleading guilty to fraud, Cameron was sentenced in January 2020 to three years and nine months in prison and ordered to pay back the money.
The co-op then went after Cameron’s bank, the Canadian Imperial Bank of Commerce, arguing CIBC was liable for the $2 million.
“Where a collecting bank pays out on a forged endorsement, it will be liable for conversion,” B.C. Supreme Court Justice Peter Edelmann explained in a ruling Monday.
Edelmann said “the overarching question” before him was “which innocent party, CIBC or Halston Hills, will bear the loss for Ms. Cameron’s fraud.”
CIBC argued Cameron had been the “guiding mind” of Halston Hills during the relevant period, and the fraud should therefore be attributed to the co-op.
The bank also argued some of the Halston Hills claims should be time-barred under the Limitations Act.
Edelmann disagreed.
He concluded Cameron hadn’t been the guiding mind of the co-op while she was writing the fraudulent cheques, and no part of the co-op’s claims were time-barred.
“Although Ms. Cameron had various duties and responsibilities in her role as president, including in part the co-ordination and payment of repair and maintenance work at the co-op, the evidence does not establish that she had unfettered decision-making authority,” Edelmann wrote.
Edelmann found CIBC liable to Halston Hills “in conversion” and ordered a judgment against the bank totalling $2,054,228.68.
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