Nunavut fishing firm alleges ex-CEO diverted $1.4 million into towering new house

The ex-CEO of Baffin Fisheries is accused of funnelling over $1.4 million in company money in a “fraudulent scheme” that financed the construction of a huge house in Newfoundland, according to a lawsuit filed by his former employer.

Garth Reid and his wife, Valerie Reid, are named as co-defendants in an eight-page statement of claim filed by Baffin Fisheries at the Newfoundland and Labrador Supreme Court and obtained by Nunatsiaq News.

The lawsuit accuses Reid of redirecting money that he had earmarked for a Baffin Fisheries project in Pond Inlet.

That money instead went to a Quebec construction company, which invoiced Baffin Fisheries and its subsidiary, Niqitaq Fisheries Ltd., for building supplies and labour costs for the construction of Reid’s home in the small town of Winterton, Newfoundland, the statement of claim alleges.

The time of the construction took place between the fall of 2016 and March of this year, the lawsuit alleges.

Reid, as the chief executive of Baffin Fisheries, did “breach the trust placed in him and fell below the required duty of care” in his responsibilities, the statement of claim alleges.

Since Reid had authority to approve all invoices unilaterally, he was able to “manipulate the internal financial controls of [Baffin Fisheries] for his own profit…and thereby conceal the fraud.”

“Garth Reid knew that such a scheme would cause a direct loss to [Niqitaq Fisheries Ltd. and Baffin Fisheries].”

Invoices cited by Baffin Fisheries suggest Reid paid for the travel and lodging of workers and tradesmen from Montreal, Quebec, who travelled to Winterton to build the home, with costs estimated at over $750,000.

Reid also billed Baffin Fisheries for building supplies and appliances such as custom-designed stairs, fireplaces, security systems, sound systems and hardwood flooring, the statement of claim said.

No estimated cost for the supplies was provided in the statement of claim.

Heavy equipment rentals for landscaping and construction were also billed to Reid’s employer, the lawsuit alleges.

All of Baffin Fisheries’ accusations have yet to be proven in court.

The lawsuit is seeking compensation for the misappropriated $1.4 million, while demanding that the title of Reid’s home be forfeited to Niqitaq Fisheries Ltd.

Court appearances regarding the matter have yet to be posted by the Newfoundland and Labrador Supreme Court.

Currently, no criminal charges have been laid against Reid.

The spokesman for Baffin Fisheries, Chris Flanagan, declined to comment on the lawsuit, as the matter is before the courts.

Methuselah Kunuk, vice president for Baffin Fisheries, confirmed to Nunatsiaq News that Reid was removed from his position on Oct. 14, following a board of directors’ vote.

Baffin Fisheries is owned by five hunters and trappers organizations in Pangnirtung, Iqaluit, Kimmirut, Clyde River and Pond Inlet.

Niqitaq Fisheries Ltd. is owned 100 per cent by Baffin Fisheries and manages the company’s fleet of fishing boats.