ATM cash machines.John Ulan/The Globe and Mail
The lonely grey ATM machine in the urgent-care lobby of Misericordia Health Centre, one of Winnipeg's smaller hospitals, spends much of the day unused and untouched.
And yet, for roughly the past decade, it has produced fantastic profits - in the realm of $2-million - for an enterprising fraudster who recognized a gaping hole in the hospital's financial controls.
"We're dealing with large amounts of money being taken over a long period of time," said Winnipeg Police Constable Jason Michalyshen.
On Monday morning, Misericordia issued a curt press release stating it had been alerted to a fraud earlier this year. A subsequent external audit found strong evidence of a massive and prolonged con, and the matter was passed over to police in April.
But the statement failed to address what everyone in the city wants to know: how did such a massive financial hemorrhage go unnoticed for so long?
The hospital had been responsible for stocking cash and keeping machine records for the 10-year period. It has now passed those duties to a third-party firm.
A hospital spokeswoman would not say who within the hospital was responsible for the machine.
"Normally, something like this would fall under our finance department," said spokeswoman Heidi Klaschka. "The police have asked us not to say anything more than that."
One employee was reportedly fired in connection with the fraud, but police have yet to make arrests, saying only that the scam was likely perpetrated by someone who worked at the hospital.
"It would be fair to say this person obviously had some sort of connection to the ATM machine or possibly other financial accounts [at the hospital] Mr. Michalyshen said.
But the method of the prolonged fraud may be more intriguing than its mastermind - possibly identifying a number of lax financial practices within the hospital and the Winnipeg Regional Health Authority.
"Somewhere along the line, there were records created for this machine that were trusted and never validated or audited," said financial investigator Gerry Jennings, a member of the RCMP's commercial crime unit before he retired to become a private financial investigator. "Fraud is impossible without trust. Someone in management took this person's word without adequate tracking or auditing, and that's what the police will likely be looking at. How far does this go up? Who was this person accountable to?"
The scheme could be similar to a Saskatchewan fraud in which several casinos lost more than $1-million when a money-transfer company failed to reimburse the casinos fully for customer withdrawals.
But that plot was rooted out after five months.
The prolonged time-frame of the Misericordia racket has baffled even veteran sleuths.
"I've never heard of anything like it," said Bob Jennings, another private financial investigator with lengthy RCMP experience. "You have to wonder how someone didn't pick up on it earlier."