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Former operations manager for NLESD on Burin Peninsula found guilty of fraud

Derek Newhook
Derek Newhook - Colin Farrell

Sentencing submissions set for August for Derek Newhook

GRAND BANK, N.L.— Derek Newhook appeared in provincial court in Grand Bank on Tuesday, July 10 for a verdict on the charges against him.

The former operations manager for the Newfoundland and Labrador Eastern School District was found guilty on two counts of fraud and one of breach of trust.

The fraud charges stem from sheds Newhook instructed employees at the bus depot in Burin to construct. One of three sheds was removed from the school board’s property and stored at a private business.

“Count 5 alleges fraud committed by the accused using employees of the (Eastern School District) to work for him and charge their hours to the school board while building three sheds,” wrote Judge Harold Porter in his decision.

“The sheds were surplus to the requirements of the school board, in the sense that they were not immediately required for school purposes.

“Two of these three sheds remained on the school board (property), and one went, on the double axle trailer, to Kevin Walsh’s equipment yard. The deprivation of the third shed, combined with the fact that its construction was unnecessary, is a dishonest deprivation. A conviction for fraud in relation to the shed which was taken to Walsh’s yard is appropriate.”

A conviction was also entered regarding a double axle trailer that the accused had instructed an employee at the depot to construct, using materials paid for by the school board.

Porter wrote, “It is clear that the school board required a trailer in order to carry out its daily operations. However, this trailer was not so employed.”

It is noted in the decision that during the investigation into the charges, the trailer was stored at an equipment yard belonging to Kevin Walsh, at the time it had a licence plate that was registered in the accused’s name.

“By putting the licence plate which was registered in his name on the trailer, the accused took ownership of an asset made for, and at the expense of, the school board,” wrote Porter.

“He then arranged for the trailer to be taken off school board property, to Walsh’s yard, where it remains. This is dishonest deprivation, which is fraud.”

The accused had originally been charged with 17 counts of fraud, but the additional charges were dismissed by the court.

Breach of Trust

Porter explained in his written decision that Newhook’s actions were not in the best interests of the school board, but favoured himself and his friend, Kevin Walsh.

“As the operations manager for the Eastern School District Burin depot, the first duty of the accused was to the school board, and, through it, to the public,” Porter wrote. “He breached that duty by favouring Kevin Walsh with benefits to him at the expense of, or to the prejudice of, the best interests of the school board.”

Some of the benefits were improvements made to a pickup truck owned by Walsh, including the installation of a lift kit and a light bar, by employees at the bus depot in Burin at the time the truck was being rented by the board.

Porter also said the delivery of the double axle trailer and the shed to Kevin Walsh’s equipment yard was not in the best interests of the board.

“…the reality is that the shed and trailer were moved to Walsh’s yard, and have stayed there for more than two years,” Porter wrote. “Even if the accused had not been responsible for moving the shed and trailer to Walsh’s yard, he was certainly responsible for getting those assets returned to the depot for school board use.”

He pointed out that Newhook had eight months to arrange the return of the shed and trailer from the equipment lot to the depot yard, and took no steps to secure the return of the assets.

“His failure to do so has left Walsh holding the school board assets, to the prejudice of the school board…,” Porter explained. “I find that there was no honest or legitimate reason for moving the shed and trailer to Walsh’s lot, and leaving it there. The school board has been deprived of the use of the shed and trailer for the time that those assets have been stored at Walsh’s lot. That is unjust enrichment, caused by the accused’s breach of trust.”

Porer said during cross-examination, Walsh mused about his right to charge retroactive rent for storing the shed and the trailer in his equipment yard.

“As a result, the school board has been deprived of its assets for two years, and now is at risk of a claim for rent for the storage of the assets. The accused is not responsible for the musings of Kevin Walsh about charging the school board rent. However, the accused is responsible for exposing the school board to that risk.”

Sentencing submissions will be heard on the afternoon of Aug. 24 at 1:30 p.m.

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