Charges laid after lengthy St. Michael’s Hospital construction corruption investigation

st michaels hospital site
Earlier work at the St. Michaels Hospital site

Ontario Construction News staff writer

The former president of Bondfield Construction Co. Ltd. and a former senior executive at Toronto’s St. Michael’s hospital have been charged with two counts of fraud over $5,000 as part of what the Globe and Mail describes “a long-standing probe into corruption at one of Canada’s premier health care facilities.”

John Aquino, who had been Bondfield’s president, and Vas Georgiou, the former chief administrative officer at St. Michael’s, voluntarily surrendered to police in the Toronto area on Tuesday, the newspaper reported. Both men were released.

In addition to the fraud charges announced on Thursday by the Ontario Provincial Police (OPP), both men have also been charged with one count of paying or accepting secret commissions. As well, Georgiou is charged with one count of committing fraud on the government.

The charges follow a lengthy OPP investigation into the $300 million hospital renovation project.

The OPP said in its statement that members of the Ontario Serious Fraud Office (SFO) arrested and charged the men.

Police said the St. Michael’s Hospital project was approved for procurement in 2011 in co-ordination with Infrastructure Ontario. The hospital and Infrastructure Ontario began the process to award the contract in December 2012.

“The SFO investigation has found evidence of fraud through the offering or receipt of secret commissions in the awarding of the contract in 2015,” the OPP said in the release.

The Globe and Mail has written extensively about the project, including in a 2015 investigation.

OPP said in the statement that other police forces helped in the probe, including the Barrie Police Service, York Regional Police, Peel Regional Police, Durham Regional Police and the RCMP. The Financial Transactions and Reports Analysis Centre of Canada provided expertise, the OPP said.

The OPP said the SFO will not comment further because the investigation continues.

Alan Gold, a criminal lawyer representing Aquino, declined to comment on Thursday, saying in an e-mail to the Globe and Mail that his client, “will respond to the accusations in the court process.”

Georgiou’s lawyer Peter Brauti told the newspaper: “We continue to deny any criminal conduct and will not be commenting further while the matter is before the courts.”

The cases against both men, which involve allegations of collusion and kickbacks, date back to 2015, when Bondfield was selected as the winning bidder to redevelop the hospital in downtown Toronto.

While Georgiou was working as one of the evaluators on Bondfield’s bid for the $300-million project he failed to disclose he was personally involved in two businesses owned by Aquino. Citing these undisclosed conflicts, the hospital fired Georgiou in 2015, the Globe and Mail reported.

“Since then, the project has fallen into disarray and is years behind schedule, while Bondfield’s multinational insurer, Zurich Insurance Co. Ltd., has unearthed evidence that the two men improperly communicated with each other throughout the procurement process on a Blackberry,” the newspaper says.

In 2019, Bondfield sought bankruptcy protection, resulting in the largest financial loss from the collapse of a construction company in the history of Canada. Scores of unpaid subcontractors submitted claims to Zurich, which had provided more than $1-billion in construction surety bonds – on Bondfield’s construction projects, including St. Michael’s.

Citing the alleged collusion, Zurich has sued Georgiou, Aquino and Unity Health Toronto, the hospital network that includes St. Michael’s, The Globe and Mail reports. “The insurance company has also sought court orders rescinding the surety bonds it issued on the project. The court case is unresolved.”

Bondfield also barrowed from a consortium of banks, led by the Bank of Montreal to finance the project. The consortium says it is out $230-million, and has launched a lawsuit against Unity Health and Infrastructure Ontario, alleging both organizations failed to keep the procurement from becoming “tainted and compromised.” That litigation is also unresolved.

The St. Michael’s construction project remains incomplete, even though its two phases — . the erection of a 17-storey patient care tower, followed by a new Shuter Wing and renovations to the existing hospital – were supposed to have been completed by 2019.

Work continues, including the Shuter Wing, which is “under active demolition,” Unity Health spokesperson Jennifer Stranges told the newspaper. Unity Health also “fully co-operated” with the police investigation, she said.

The two men are scheduled to appear in Old City Hall courthouse in Toronto on March 28.


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