Gambling Addict Cheats Hospital

Winnipeg hospital's cash allegedly gambled away


A former hospital finance clerk accused of stealing almost $1.5 million from Winnipeg's Misericordia Health Centre was frequently seen at a local casino, plugging nearly $400,000 into slot machines since 2008, the Manitoba government alleges.

Michelle Cadger also paid cash for a new car and subsidized a trip to Hawaii for herself and nine friends, despite making just shy of $40,000 a year in salary, court documents obtained by CBC News state. The province has filed a civil claim against Cadger in Court of Queen's Bench.

The documents identify Cadger, 46, as the woman at the centre of a police investigation into an alleged long-term fraud involving the hospital and a bank machine it leased from a private company.

Until she was fired in early March, Cadger had worked at Misericordia Health Centre (MHC) since 1980.

She was arrested by Winnipeg police in the parking lot of her Winnipeg apartment building on Nov. 10 and is to appear in court to face charges of theft over $5,000 and fraud over $5,000, police previously said.

While a court date looms, the province has been working behind the scenes to freeze Cadger’s bank accounts, court records show.


Since 2000, Cadger allegedly stole money from her employer through a scheme that investigators and external auditors say has cost the MHC $1.48 million, according to the civil court claim.

The thefts were achieved because of her virtually exclusive access to “substantial” amounts of cash used to replenish the ABM as an accounts receivable clerk in the hospital’s finance department, the documents allege.

The allegations in the province's claim have not been proven in court, nor has Cadger filed a statement of defence.

'Few checks and balances'
In the 10 years she was responsible for the cash float used to fill the bank machine (from which the hospital was making $1.50 per transaction), the province alleges Cadger rarely allowed other clerks to handle that money except under specific instruction.

In January, the hospital’s new director of finance “noticed irregularities” in the accounts. An internal investigation revealed that more than $500,000 was unaccounted for, the province said.


That director told police in May that when she took the job “she noticed very few checks and balances and virtually no security measures in place and began to implement them,” the court documents said.

Cadger was interviewed and suspended from her job after she was unable to explain what happened to the missing money, the civil claim states. A larger-scale audit revealed a further loss of nearly $1 million from 2003 to 2010.

Since her suspension, Cadger has had no contact with the hospital or her union representative, according to the province.

At the time of her March dismissal, her annual salary was $39,373.

Accounts frozen
On Dec. 17, Court of Queen’s Bench Justice Albert Clearwater approved an order to keep Cadger’s bank accounts temporarily frozen and her car impounded. The court’s order also includes $25,000 she paid in trust to a Winnipeg criminal defence law firm.

The government alleges the money in the trust fund are proceeds of unlawful activity.

As part of those proceedings, the assistant director of the provincial forfeiture department filed a sworn statement with the Court of Queen’s Bench, along with the documentation police used to obtain a search warrant for Cadger’s apartment.

A Nov. 10 affidavit to obtain the warrant suggests the police investigation into the missing money began in earnest on April 14, when a Winnipeg police commercial crime detective met with a hospital lawyer and accountants from KPMG to discuss the findings of a forensic audit.

From there, Det. Sgt. Chody Sutherland started doing extensive interviews and background checks. She learned through internal police reports that Cadger had been stopped by preboarding security at Winnipeg airport in August 2009 with “what appeared to be $10,000 in cash in her carry-on luggage,” the affidavit states.

Cadger told police at the time “she had won the monies over the course of the summer at the casino” and denied it was a full $10,000, said Sutherland. She was allowed to carry on with her trip.

On April 27, Sutherland said a check conducted by Manitoba Lotteries showed Cadger had been seen at Club Regent Casino and was enrolled in a rewards program for frequent visitors.

“Since 2008, her enhanced club card shows having put upwards of $393,000 into slot machines,” the detective states.

Over the course of the next few months, Sutherland said she interviewed a number of people in connection with the investigation. Police also applied to obtain banking records, but those have so far turned up no trace of the missing money, Sutherland said.


New details in million dollar fraud scandal