UPDATE: Exclusive: Greenwood Family Resource Centre hit by $400,000 fraud

Funding body not calling for any changes following fraud

Nancy Kelly nkelly@kingscountynews.ca
Published on June 12, 2012
Greenwood’s Military Family Resource Centre learned last year a long-serving employee had misappropriated funds valued over $400,000.
Nancy Kelly


By Nancy Kelly

The Greenwood Family Military Resource Centre’s (GMFRC) principle funding body is not calling for any operational changes following the theft of over $400,000 by a former employee.  

In early May, a civil judgement was made in Nova Scotia Supreme Court against Harbourville resident Karen Lorraine Byers for the amount of $403,340.95.

Byers, who worked at the GMFRC from 1998 to 2011, admitted in March of last year to diverting money from the centre’s accounts to her own. 

The centre’s annual financial statements are audited by a third-party firm each year, said GMFRC chairwoman Megan Venner, but they failed to uncover the irregularities. 

An investigation by the Canadian Forces National Investigative Service (NIS), the military police service which investigates “all serious and sensitive Department of National Defense matters,” is now underway.  

Major Isabelle Robitaille, spokesperson for the Canadian Forces’ Director Military Family Supports (DMFS), which funds and oversees Canadian military family resource centres to provide the mandated services of the military family services program, said despite the case against Byers, the organization “is satisfied with the accountability framework” that currently exists between the DMFS and its member organizations.  

Robitaille explained family resource centres are accountable to DFMS, but they operate independently under the direction of a volunteer board and set their own internal measures to comply with the mandate and policy framework provided by the DMFS.  

Currently, DFMS conducts annual financial audits and regular compliance reviews of and receives quarterly from all military family resource centres.  At no time during Byers’ employment with the GMFRC did any “red flags” go up when the Greenwood Centre’s finances were reviewed by the DFMS, Robitaille pointed out.  

While she could not comment on the details of the criminal investigation, being conducted out of Halifax, she noted the DMFS “was taking the matter very seriously." 

“It is a very big deal,” she said.  

A spokesperson for the NIS reported there has been no involvement by RCMP in the case so far, but didn’t preclude that from happening in future. If charges are warranted, NIS has the authority to work with the RCMP or directly with the Crown to file charges against Byers through the civilian court system.  

As a former civilian employee of the GMFRC, she is not subject to the Canadian Forces’ code of service discipline and cannot be charged and tried in a military court.  


By Nancy Kelly

A former employee of the Greenwood Military Family Resource Centre (GMFRC) has been ordered to repay $400,000 to the centre after admitting to a major fraud during her 13-year tenure.

The Kings County Advertiser has uncovered details of a civil judgment made in Nova Scotia Supreme Court against Karen Lorraine Byers, Harbourville, in early May. Court documents reveal Byers converted “certain of the centre’s financial resources to her own personal use.”

“Whatever you call it - fraud or misappropriation of funds - she admitted to taking money that belonged to families of 14 Wing Greenwood,” said new GMFRC board chairwoman Megan Venner.

The Greenwood Military Family Resource Centre is a not-for-profit, charitable society dedicated to serving the military families of 14 Wing with a current annual budget of $800,000.  It is partially funded through the Ottawa-based Director Military Family Services and 14 Wing Greenwood, with the remainder of funds being realized through donations, fundraisers, user fees and special events. The society is governed by a volunteer policy board elected annually and employs approximately 30 full- and part-time staff, whose services are augmented by community volunteers. 

Allegations of fraud surfaced in March 2011 after Byers’ bank conducted an investigation into irregularities in her personal accounts. It was divulged to the centre that substantial sums of money had been diverted from the GMFRC’s accounts to Byers’.

The bank investigation concluded Byers, the centre’s business manager since 1998, had diverted funds by falsifying records, forging signatures on cheques written to the centre and its employees and diverting third party donations from the centre.

Court documents indicate when confronted by centre staff about the bank’s suspicions, Byers  “confessed she had been stealing money from the centre.”

She has not been an employee of the GMFRC since that time.

As soon as the fraud came to light, Greenwood Military Police were contacted by the GMFRC. The case has been handed over to the Canadian Forces National Investigative Service, which is mandated to investigate serious and sensitive matters related to Department of National Defence and the Canadian Forces. It performs a function similar to that of a major crime unit of the RCMP or large municipal police agency.

No criminal charges have been laid against Byers to date.

An order was made May 2 against Byers for repayment of  $403,340.95, which includes accumulated interest since the judgment was made Feb. 29. The judgment covers legal and accounting costs. Interest of five per cent per year will be charged until the amount is paid in full.

 Venner confirmed this is the amount that Byers has agreed to repay, but would not disclose the full amount of the fraud. She did say, however, the judgment order represents a “significant amount” of the total misappropriated funds.

There is currently no court-ordered repayment schedule. Venner said she anticipates that will come in the near future.

Venner said internal financial audits, conducted annually by the centre’s board of directors, failed to raise the alert about any financial irregularities. When Byers’ activities were revealed, the GMFRC immediately reviewed its financial policies and a “full external review” has since been conducted with the goal of “safeguarding the centre’s money.”

Aside from the financial repercussions of Byers’ fraudulent activities, Venner said the incident triggered “a deep sense of betrayal” among the centre’s staff and volunteers.

According to statements made by GMFRC executive director Margaret Reid and echoed by former board chairman Kim McMahon, Byers was “well-liked and highly regarded by everyone” and “meticulous” in her duties. 

The entire incident has served as a wake-up call for the GMFRC, Venner said.

“We learned how vulnerable non-profit organizations can be.  It is a lesson that other organizations need to pay attention to,” added Venner.

She expressed pride in the centre and its staff, who she said have “come through unscathed and stronger.

“There is a real desire for justice. It is important to staff, volunteers and the families.”

While word of the fraud is just now becoming public, Venner said at no time was the incident or investigation kept a secret.

“We haven’t been shouting it from the rooftops,” but said that the issue was dealt with by the centre’s board of director’s in a timely, appropriate fashion, according to its policies.

“Since we learned about (the fraud) our primary goal has been to recover that money,” Venner said.

She  also said she remains appreciative of the ongoing support from 14 Wing and the DMFS.

“At no time was there any blame laid or any second guessing by them,” about the centre’s ability to manage its own affairs.

Calls to Byers were not returned prior to press time.