Inside the alleged fraud and forgery at Quebec's Lester B. Pearson School Board

A few months after the Lester B. Pearson School Boardfired the head of its international department in 2016, Quebec's anti-corruption unit was called in to investigate suspected wrongdoing.

Dubbed "Project Pandore," the investigation focused on allegations of fraud, forged documents and abuse of power at the department as it rapidly expanded.

Between 2011-12 and 2015-16, the department grew from seven students to 777, bringing in millions of dollars in tuition fees for the Montreal-area English-language school board.

Court documents obtained by CBC News shed light on the investigation that ultimately led to the arrest of Caroline Mastantuono, the former head of the department, her daughter Christina Mastantunono, who also worked in the department, and Naveen Kolan, a Toronto-based consultant with Edu Edge Inc. (EEI).

The school board and Edu Edge had an agreement in place at the time aimed at attracting adultforeign students for vocational school.

The three individuals were charged in November 2020, but details of the allegations against them and their alleged impact on the English-language school board serving 20,000 students in the Montreal area have been scarce until now.

All three face charges involving fraud against the school board and the province's Immigration Ministry, as well as the fabrication and use of forged documents, for acts allegedly committed between 2014 and 2016.

The trial is set for January 2023.

The court documents contain what's known as a "trial brief," which outlines the prosecution's case. The list of potential witnesses includes a forensic accountant, a signature specialist, former and current school board staff and several dozen students.

The allegations have not been proven in court, and all three accused have pleaded not guilty.

In a statement on behalf of his client Christina Mastantuono and the other two accused, lawyer Jonathan Gordon declined to comment on specifics, but he said the trial brief "contains unproven allegations to which our clients have not had the opportunity to respond in the course of the judicial proceedings."

Forged documents

According to the trial brief, in the spring of 2014, Christina Mastantuono told her mother the province's Immigration Ministry wouldn't grant some international students the Quebec Acceptance Certificate (CAQ), a mandatory immigration document, because the students did not have the necessary funds to cover their tuition.

The prosecution explains how Caroline Mastantuono, along with Kolan, told staff at the school board they would create fake tuition receipts for Indian students to make it appear they had paid in full.

The forged documents, described as "false receipts," allegedly allowed the students to obtain their CAQs. They also enabled Kolan's firm, EEI, to bill the school board a recruitment commission.

Christina Mastantuono, along with two other staff members, were at one point responsible for the forged documents, the trial brief alleges.

Later on, it's alleged, only Christina signed the documents, because "Caroline Mastantuono did not want employees blamed for these acts."

In all, the prosecution alleges there were 81 forged receipts of payment, with the overall potential loss to the school board estimated at $1.5 million.

Embezzlement scheme

A second scheme alleged by the prosecution involves the embezzlement of funds destined for the Lester B. Pearson board.

The school board kept records of which international students applied to its programs through a recruiting agency and which ones applied on their own.

It did not have to pay a commission for students who applied on their own.

According to the trial brief, two staff members in the international department discovered students without an agent had been assigned to a B.C.-based numbered company registered in the name of Naveen Kolan's wife, Suneetha Yanala.

Christina Mastantuonoallegedly told staff this was done to "compensate Naveen Kolan for the money supposedly owed to him" by the school board.

However, there were no signed agreements between the board and the B.C. recruiting company.

Caroline Mastantuono signed on the school board's behalf, and Kolan signed on behalf of the B.C. company, according to the trial brief.

These contracts were "untraceable" by the school board, the documents said.

A forensic analysis shows four cheques from the school board totalling $119,000 were sent to the numbered company.

School board files lawsuit

Officials for the Lester B. Pearson School Board declined to comment on what is contained in the trial brief, saying the matter is now before the courts.

The school board sued Edu Edge in 2016 in an attempt to recoup lost earnings. In response, the firm countered that it was actually the one owed $5.5 million.

In 2019, the accounting firm Ernst & Young was appointed to help make sense of the financial dispute, but the case has still not been resolved.

The same summer that the accounting firm was appointed, Quebec's Ministry of Higher Education granted the Mastantuonos a licence to operate M College, a private institution catering to international students, even though the criminalinvestigation was underway, and aprovincial audit had found a litany of "irregularities" with the school board's international department.

The Mastantuonos went on to acquire CDE and CCSQ colleges in the spring of 2020, just months before Caroline and Christina were charged with fraud for alleged financial irregularities when they worked at the Pearson Board.

The three colleges filed for creditor protection earlier this year.

The colleges have blamed their financial troubles on the COVID-19 pandemic, ill-timed expansion and changes to the immigration process for international students, which led to long visa delays.

They were sold last month, which could allow many students to resume their studies, but hundreds of others are still seeking refunds.