Sons of Italy aims to restore trust at a retirement home after a $1.2 million embezzlement scheme

0
More about ‘ghosts in the villa’

The nonprofit in charge of the Villa Italia retirement home says it is taking steps to restore resident and public confidence in Hamilton after an identity theft scheme bled at least $1.2 million from the home over the past seven years Has.

In a letter Thursday to residents of Villa Italia, the chairman of the Sons of Italy Charitable Corp. Robert Skaljin said the organization was shocked by the embezzlement scheme and said the group’s “goal is to do whatever it takes to reassure the trust and put things right”.

Skaljin called the house “a jewel in our community” and said the house continues to pursue recovery of the stolen money and that security measures have been put in place “to prevent such an event from ever happening again”.

“You can and should expect more from us,” the letter said. “We will learn from this and emerge from it as a stronger and better institution and community, continuing the important mission of Villa Italia.”

Every two weeks since at least 2015, thousands of dollars have been funneled from Villa Italia accounts into a secret TD bank account in the name of the home’s former executive Pat Mostacci.

An investigation by Spectator found that three “ghost employees” were added to the home’s payroll using the real names, addresses and social security numbers of three Ontario women.

The real women, two of whom are retired nurses, have never worked for Villa Italia. The two nurses, who live in Brampton and Grimsby, say they don’t know Mostacci and have never worked at the home. The Spectator was unable to locate the third woman listed on Villa Italia’s payroll as living in Ancaster.

These ghost employees received steady pay increases over time — starting with annual earnings of around $73,000 in 2015 to more than $105,000 in 2019. They also received regular overtime pay, vacation and stats pay, and retroactive pay.

The paychecks were automatically deposited into Hamilton TD’s bank account, where thousands of dollars were transferred to one of eight credit cards each week. There have also been large cash withdrawals at branches, ATMs and through e-transfers.

The viewer also learned that Mostacci had complete control over the home’s payroll system, including payslips, which he brought to his office in a sealed envelope. Pay slips were only distributed to employees after he sorted them behind closed doors.

Mostacci was sacked on January 4 after the Sons of Italy board raised several unresolved operational issues with him, including Villa Italia’s rising vacancy rate.

Logs of Villa Italia’s payroll system obtained by The Spectator show that about 30 minutes after Mostacci was fired, the administrator account “[email protected]” logged in remotely and began making dozens of changes to the ghost employees’ accounts.

The logs show that [email protected] changed the ghost records to say they quit. The date of her exit has been backdated 24 hours to January 3, 2022.

If the payroll changes were an attempt to disguise the fake employee records, it was too late to prevent the next round of paychecks from being processed.

On January 7, 2022, payslips arrived at Villa Italia and the newly appointed interim managing director handed them over to an employee for distribution. Back then, the ghosts were discovered when their pay slips weren’t collected.

“Given his long tenure at Villa Italia and a desire to give Mr. Mostacci an opportunity to explain himself, he received notification of the finds and a request for explanation,” Skaljin’s letter reads. “Following no substantive response to the request, court proceedings were initiated on March 14, 2022.”

Three days later, an Ontario Superior Court judge ordered all of Mostacci’s assets, including his home in Hamilton, to be frozen pending the resolution of the lawsuit. Mostacci became seriously ill shortly thereafter and died on April 2, 2022 at the age of 53.

Skaljin declined to comment on the payroll system or Mostacci when contacted by The Spectator, citing ongoing legal action. Thursday’s letter is the first time he has spoken publicly at length about the case.

The letter confirms that at least $1.2 million has been embezzled from Villa Italia’s payroll and that the Sons of Italy are exploring the possibility of a civil lawsuit against Mostacci’s estate to recover their losses.

Although Mostacci has died, his fortune remains frozen. In an email to The Spectator, his wife’s attorney, Gloria Mostacci, confirmed her assets also remain frozen. The lawyer also said that while Gloria Mostacci was aware of the allegations against her late husband, she had no knowledge of what he might have been doing at Villa Italia and her husband took care of all of the family’s finances.

Most of the files related to the Sons of Italy lawsuit against Mostacci remain sealed by a court order. The organization applied for the seal in March, saying it was necessary to prevent public access to the materials until a judge issued orders that would prevent Mostacci or others from having any cash or assets associated with the stolen money were acquired.

In his letter, Skaljin did not specify what changes the Sons of Italy made to prevent future manipulation of Villa Italia’s payroll.

He said the board will reach out to residents, their families and community partners to discuss next steps.

Share.

Comments are closed.