'Magnitude of greed astounding' in Sudbury fraud case

A 68-year-old former Atlas Copco executive will serve a five-year prison sentence and has been ordered to pay back nearly $24 million for his role in defrauding the mining supply giant's Sudbury office.

Leo Caron pleaded guilty to the charges of fraud and theft over $5,000.

Justice John Keast called the "magnitude of greed astounding" when sentencing Caron to five years in prison, minus a credit for six months he has already served.

Justice Keast also ordered Caron to pay back the nearly $24 million, but the crown acknowledged it is unlikely he will ever be able to pay.

The court heard Caron is in the process of declaring bankruptcy. All his assets, including two homes, have been seized.

Any money Atlas Copco recovers from others alleged to be involved through criminal or civil proceedings will go toward that restitution order.

Position of trust

Caron started his career withAtlas Copco inMontreal, but he moved to Sudbury in 2002 when themining service and supply giantmoved its Canadian head office to the city.

By 2004, the court heard he was participating in a scheme to over bill the company's employee benefits plan.

The crownalleges the scheme also involvedHudson, Que., insurance broker Paul Caron a long-time friend who is of no relation to Leo Caron and anotherAtlas Copco employee, Dirk Plate.

Paul Caron and Plate have been charged inconnection with the case, but the allegations against them have not yet been proven in court.

WhenLeo Caron pleaded guilty to theft and fraud charges on Friday, the court heard his role as human resources director was to approve inflated invoices for health benefits.

Over a period of three-and-a-half years, the crown said this over-billing added up to about $22 million.

Caron also admitted to approving about $1.5 million in advances for himselfthat he never intended to pay back.

Justice Keast said Caron traded on his currency as a trustworthy individual to steal the money.

Tracing the money

It's not entirelyclearexactly how much of the stolen moneywent to Leo Caron,said crown attorney Philip Zylberberg.

"We have been able to trace about $4 million that went to him, or through him, or to his ex-wife, or to a company that he incorporated for that purpose," he said.

'The money is big. The ability to get away with it is high.' Crown attorney Philip Zylberberg

"We don't know whether that's all, orwhether more made its way to him."

Eventuallyothers at Atlas Copco raised concerns about how much the employee benefit program was costing in Sudbury, the court heard.Although Caron assured them everything was fine, the company fired him in 2007.

'Difficult to ferret out'

Prison sentences for fraud cases of this magnitude typically range from four to 10 years, Zylberberg said.

"These are difficult schemes to investigate, difficult to ferret out," he said."The money is big. The ability to get away with it is high. There are people, no doubt, who will be tempted."

"The only way that offences could possibly be deterred is by significant jail terms for those who get caught, so that people know the risks they are taking."

The fact that Caron pleaded guilty at one of the first available opportunities was a mitigating factor in the sentencing, Justice Keast noted.

The court heard Caron's health is deteriorating andissuffers from an array of mental health problems.

He will serve his prison sentence in Quebec to becloser to his family. The court heard he is divorced with an adult daughter.