NorQuest College Successfully Concludes Legal Settlement

of Alleged Fraud and Privacy Breach
NorQuest College was the target of an alleged fraud and
misconduct relating to confidential information and financial
assets between 2008 and 2012. Once NorQuest discovered
the misconduct in early 2013, the college informed the Board
of Governors and took swift and decisive steps with the best
interests of students, employees, and the public in mind.
As a leader in post-secondary education, NorQuest is also
committed to sharing its learnings with other institutions to
help prevent the following situation from happening to them.
From the beginning, NorQuest made a commitment to
be diligent, work alongside investigators, and follow
due process.

NorQuest Recovers All Information, Assets,
and Funds Related to the Alleged Fraud
Through the course of this matter the courts awarded legal
remedies rarely given, which enabled the college to recover
all confidential employee information and college assets
related to the alleged fraud.
The college’s 2015–2016 Financial Statements approved by the
Board of Governors on October 24, 2016 report $1.622 million
in Other Revenue with a note explaining that the college
recovered funds related to an alleged fraud that occurred
during the period 2008 to 2012. The $1.622 million includes
the total estimated losses and costs. See page 60.

Informing Employees and Stakeholders
Legal counsel advised the college from the beginning of this
matter that due to a pending potential criminal investigation
by Edmonton Police Service (EPS), ongoing litigation,
restrictions around the use of seized records, and emerging
evidence of an alleged fraud perpetrated against the college,
there was a risk that broad disclosure of the privacy breach
would hinder both the criminal and civil investigations. In
addition all records were secured. Once NorQuest received
confirmation from EPS that providing employees with more
information would not impede their current investigation,
the college informed all employees and stakeholders of the
situation in September 2016.
It is important to note that legal counsel deemed the risk of
harm to the majority of college employees to be low. From
the start, NorQuest worked with the two employees directly
targeted by the privacy breach to inform them, protect their
privacy, and resolve the situation as quickly as possible. If the


NorQuest’s Primary Concern: Protect the People
Targeted and the College as a Whole
In early 2013, NorQuest College became aware of a
former employee, previously terminated, allegedly
sending inappropriate electronic messages. NorQuest
worked quickly and decisively to identify and stop the
alleged harassment, as there were early indications that
information used in the alleged harassment could have
originated from internal sources.
NorQuest obtained a court order that allowed, without
warning, an extensive search of the former employee’s
home and a seizure of all the electronic and personal
devices in the home (an Anton Piller order). The extensive
nature of the order and subsequent search gave
NorQuest College and the individuals directly impacted
the assurance that all college and confidential employee
information had been recovered.
As outlined in public court documents, the Anton Piller
Order was executed on March 1, 2013 following discovery
of the security breach. The Anton Piller Order, which is
an extraordinary remedy, allowed the Bailiff along with a
representative from NorQuest College, an independent
supervising lawyer, and a forensic IT investigator, to
search on a surprise basis the former employee’s home
and immediately seize all personal and electronic devices
of the former employee.
This led to the recovery of and securing by the Bailiff of
the NorQuest College property and information in the
possession of the former employee including electronic
devices. Only forensic investigators and two NorQuest
officials were permitted to view the materials, and only
for matters related to the specific legal action.
As stipulated in the court order, the Bailiff retained all the
seized property and information recovered and no copies
of the information could be released to any party without
further court order or agreement between legal counsel.
The legal remedies NorQuest obtained were unique –
the college was not only able to quickly secure all the
electronic data, but also have a court order restraining
the actions of the former employee.
These legal actions provide further assurance that
confidential and college information that was in the
possession of the former employee will always continue
to be secure. For example, under the far-reaching terms

NorQuest College Successfully Concludes Legal Settlement of Alleged Fraud and Privacy Breach

college had any evidence or suspicion that other employees
were at risk, NorQuest would have immediately followed up
directly with those employees in the same manner.

NorQuest Among 12 per cent of
Organizations to Recover Assets from
Alleged Fraud *
During the course of these matters, NorQuest College
advised the Edmonton Police Service, Office of the Auditor
General, Ministry of Advanced Education, and the Office of
the Information and Privacy Commissioner of Alberta, and
acted under legal advice and court direction.
In many cases involving internal fraud and misconduct
particularly where there is alleged collusion with outside
parties, not only is it difficult to detect, but recoveries of
assets lost are rarely successful. NorQuest’s handling of this
matter meant that the college was able to quickly secure all
personal information improperly taken, contain the breach,
and recover not only the funds lost, but the costs of the
associated recovery through various avenues. NorQuest
is confident its internal controls and systems are secure
following extensive reviews over the past four years.
The Office of the Auditor General verified this in their
last three reports.

Further Search Findings
The college completed a further search of the seized records,
which have been secured since March 2, 2013, to determine
if the former employee had accessed other NorQuest
information. The results of the search indicate that the vast
majority of records were work-related emails or meeting
notices. The search did not disclose any personal information
that would be considered highly sensitive in nature such as
social insurance numbers, banking, or medical information.
A very small number of records contained information
related to salary, performance, and similar matters.
The college will communicate with these individuals as
appropriate. There is no evidence to suggest that this
information was used in any way by the former employee
or that it entered the public domain.

Report to the Nations on Occupational Fraud and Abuse. 2016 Global Fraud Study

of the March 1, 2013 court order, the former employee
is prohibited and restrained from:
• A 
ccessing or making use of any confidential
information obtained or created in the course of
his employment with NorQuest, and
• A 
ccessing or making use of any information
obtained by the former employee from NorQuest
following the termination of his employment.
In addition, under legal obligation, the former
employee was required to disclose to the Bailiff the
location of any data or information downloaded or
copied from NorQuest’s computer systems, including,
without limitation, any data or information forwarded
to third parties, and he declared that he did not.
Violating this court order in any way would be
considered contempt of court, with serious
repercussions which could include imprisonment.

Steps Taken to Secure NorQuest College Assets
As governed by the legal parameters, the lengthy and
complex review of the seized devices took place over
the summer and fall of 2013. Through the course of the
review, further alleged misconduct was discovered.
NorQuest uncovered an intricate set of allegedly
fraudulent transactions dating back to 2008 and
totaling approximately $1.2 million, which led to
further investigation and legal actions.
Through a series of contracts and payments related to
the provision of services and equipment to NorQuest,
the former employee and a number of external
individuals and companies allegedly colluded to
defraud the college.
NorQuest retained EY to perform forensic accounting
investigations. With this information, the college
obtained further extraordinary legal remedies of
Mareva Injunctions and Norwich Orders in order to
freeze assets and require third parties to produce
relevant documents and information related to the
alleged fraud.
NorQuest was able to maximize its efforts to recover
not only the funds lost, but the costs of the related
recovery through various avenues.

annual report 2015–2016