Criminal charges have been laid against a sales representative of an RESP firm and a nurse in a case involving stolen maternity patient information.
The Ontario Securities Commission laid a total of seven criminal charges Tuesday against former Global RESP Corp. sales representative Nellie Acar and registered nurse Esther Cruz. Quasi-criminal charges were laid against three others in a similar case involving maternity ward data.
The OSC, Canada’s biggest capital markets regulator, alleges maternity patient information was stolen from the Rouge Valley Health System and Scarborough Hospital over a period of two and a half years in the case involving Acar, the former sales representative, and Cruz.
“Acar allegedly used this confidential patient information as a source of potential Registered Education Savings Plan (RESP) investment sales leads,” the OSC said in a statement detailing the charges.
The charges against Acar include forgery and possession of property obtained by crime. She is accused of completing and submitting false education savings plan enrolment applications through Global on at least two occasions.
Cruz, the nurse, is charged with breach of trust by a public officer and theft under $5,000.
Both Acar and Cruz are charged with two counts of running afoul of the Criminal Code of Canada with “secret commissions.”
None of the allegations have been proven.
The OSC’s investigation was conducted by the regulator’s Joint Serious Offences Team, which last November accused former Rouge Valley Hospital clerk Shaida Bandali of breaching the provincial Securities Act by selling maternity patient information.
Bandali was accused of using maternity patient information to compile and sell “investor lists” to “one or more RESP dealer representatives in the business of soliciting clients” for the education savings plans.
On Tuesday, the OSC alleged that a former branch manager of Knowledge First Financial Inc. and a former assistant branch manager of C.S.T. Consultants Inc. purchased confidential maternity information from Bandali, who was ultimately charged with unregistered trading.
Poly Edry and Subramaniam Sulur are accused of failing to act “fairly, honestly and in good faith” with clients, and participating in an unlawful referral arrangement with another person, after they allegedly purchased the maternity information from Bandali and provided it to sales representatives at their former firms “as a source of potential RESP investment sales leads.”
Poly’s spouse Gavriel Edry was charged with one count of unregistered trading for allegedly helping with the “gathering and dissemination of confidential maternity information” to Knowledge First Financial sales representatives.
Knowledge First Financial issued a statement Tuesday that said the firm “terminated its business relationship” with Poly Edry last November after learning about the OSC investigation.
“We are sorry this incident has violated public trust,” said George Hopkinson, the firm’s chief executive, adding that a “third party audit of operations” determined no other branches were involved. The statement said Knowledge First Financial will continue to cooperate with the OSC and law enforcement agencies.
Tuesday’s charges were not levelled against any of the RESP firms involved, but Jill Homenuk, director of communications and public affairs at the OSC, said the regulator’s compliance and registrant regulation branch “will be working with the three impacted firms on next steps to prevent future misconduct.”
Global RESP issued a statement late Tuesday indicating the firm terminated Acar when notified of her alleged activities by the OSC.
Acar and Cruz are scheduled to appear at the Ontario Court of Justice in Toronto on July 17.
Poly and Gavriel Edry, and Sulur, are to appear July 16 at the Ontario Court of Justice where they face quasi-criminal charges. The OSC has the power to lay quasi-criminal charges for Securities Act offences.
The OSC’s Joint Serious Offences Team is an enforcement partnership between the provincial regulator, the financial crime program of the Royal Canadian Mounted Police, and the anti-rackets branch of the Ontario Provincial Police. The team can investigate serious violations of the law under provisions of the Criminal Code or the provincial Securities Act.
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