Burnaby co-op a cautionary tale after ex-president's $2M fraud

A Burnaby housing co-op that fell into disrepair for years while its president secretly funnelled more than $2 million of its assets into her personal account is a cautionary tale to the directors of small, volunteer-run organizations everywhere, according to the Co-operative Housing Federation of B.C.

“It’s a hard lesson to learn this way,” executive director Thom Armstrong told the NOW, “but, if every co-op who becomes aware of this story – and not just every co-op, anybody who’s sitting on a board, whether it’s a co-op or a non-profit association or a neighbourhood association – if the lesson they draw from it is that they should pay extra attention to strict financial controls and the best practices in accounting and control procedures, then there’ll at least be some value to come out of it.”

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Halston Hills

Lillian Cameron had been the president of the 90-unit Halston Hills Housing Co-op on Horne Street for 17 years, according to facts presented at a recent court hearing.

In November 2016, she walked into the Burnaby RCMP detachment and announced she was turning herself in for stealing hundreds of thousands of dollars from her co-op.

Her bank had told her it was launching an investigation into large sums of money deposited into her account by cheque, she said, and she knew the jig was up.  

Cameron initially claimed she had stolen only about $500,000 over an 18-month period and lost all the money gambling.

But a police investigation eventually revealed Cameron had stolen a little more than $2 million over about five years.

And Crown prosecutor Heather Magnin said Cameron hadn’t lost all the money gambling but had spent much of it on a “luxurious lifestyle” beyond her means.

Magnin also noted Cameron had applied for and received $24,520 in rental subsidies for being “low income” during the offence period, even though her income during that time averaged about $120,000 a year.

“Her claim of the subsidy meant these funds were not available to other members,” Magnin said.

(In a 2014 NOW article, Cameron lamented the co-op’s inability to accept more low-income applicants.

“We already have too many,” she said at the time. “People can barely afford what they’re paying now. I feel sorry for them because this affects the most vulnerable people.”)

The crime

The police investigation found Cameron had generated fake invoices for maintenance work at Halston Hills. She had then written cheques drawing on the Halston Hills account to correspond to those invoices. After getting a second signature from another board member, she then deposited them into her own account.

All the while, necessary repairs at the co-op were left undone for years.

“In our two apartment blocks, balconies and staircases had to be condemned as they were unsafe from the lack of maintenance and upkeep,” stated a victim impact statement from the new Hallston Hills board.

“All of our buildings are going to require continual, dedicated efforts over a number of years to return them to the state that they should be in.”

Numerous members of the co-op showed up for Cameron’s sentencing hearing.

In victim impact statements, some spoke of bullying and threats of eviction they said they had experienced at Cameron’s hand.

“I was living in fear for everything because she manage to make me feel insecure in my very own home,” said one co-op member – an immigrant and single mother of two children with disabilities, whose toilet remained unfixed for a year before Cameron left.

Others spoke of broken trust.

“I feel used, betrayed and broken hearted because she used me for her theft,” said another member, who had been a director when Cameron was president.

Cameron apologized to the court and her former neighbours.

“Never in a million years did I think I would find myself in this position,” she said. “I disappointed my family and friends and I broke the law. Not a day goes by that I don’t think of those actions, and I’m filled with regret and remorse.”

Cameron’s lawyer, Robert Dick, argued mental health struggles during the offence period were behind the crimes and should be considered a mitigating factor in her sentence.

He presented evidence from doctors saying Cameron had been diagnosed with bipolar disorder as well as PTSD from a random sex assault in 2011, and both had fuelled her gambling problem.

But Magnin noted Cameron had managed to stay out of debt and not all the stolen money went to her gambling habit.

She further noted Cameron had managed to hold down a good job and keep up her volunteer work, despite her mental illnesses.

Provincial Court Judge James Bahen said he accepted Cameron was acting under the influence of a mental disorder when she gambled away large sums of money, but that didn’t account for her actions outside of the casino.

“This is not an offence of gambling,” he said. “This is an offence of deception, deceit and taking money from people who are certainly not in a position to spare any money.”

He said the court needed to send a strong message of deterrence and denunciation in such cases.

“Money is attractive to people,” he said. “If people think that they can defraud any organization, whether it’s Microsoft, Google or Amazon, or a small housing co-op in Burnaby, then they’re going to take advantage of that, somebody will, whether they have a mental health diagnosis or not.”

New beginning

Cameron is now in prison serving a jail sentence of three years and nine months.

She has also been ordered to pay Halston Hills back the money she stole and she has been banned for 10 years from “any involvement by employment or by volunteering in authority over the property of another.”

Back at the co-op, meanwhile, members have begun to pick up the pieces of the wreckage Cameron left in her wake, according to Armstrong.

“Whenever something like this happens, everybody looks around and asks the questions ‘How could this have happen? Did anyone else know? What could we have done? What could you have done? What could anyone have done?’ And for a little while it’s hard to trust anyone,” he said.

The Co-operative Housing Federation of B.C. was called in to help restore Halston Hills members’ confidence in their governance and management systems and develop a financial strategy to get the organization back on track, according to Armstrong.

Slowly but surely, he said morale is being rebuilt, with the members electing a board that once again has the confidence of the community.

“The money they’ve been depositing into their reserves, now that it’s not being stolen out from under them, have actually built back up quite quickly,” Armstrong said. “And they’re now starting to notice a difference in their quality of life because now the money that was meant to be put toward repairs actually is being put towards repairs.”

For Armstrong, however, the best safeguard against similar betrayals of trust in the future is attention to good governance.

“When you’re on the board of a co-op or any other kind of neighbourhood association, the people you sit around the table with are your friends and neighbours, and sometimes people develop this notion that to insist on second- and third-party scrutiny over financial transactions is somehow an expression of mistrust in your friend and neighbour, and maybe you shouldn’t. But the lesson is that a director’s duty of care and the strict enforcement of proper and standard control procedures is really an essential part of governing or managing a volunteer-led organization, and it’s not an expression of mistrust in your colleagues. It’s simply doing your fiduciary duty as a director of the co-op – and that’s something you should never shy away from.”

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