Yellowknife (Mar 08/04) - A break-in has forced the lid open on a looming scandal - one that alleges $704,000 was taken from two Denendeh Development Corporation subsidiaries by a former consultant.

On Friday, NWT Supreme Court Justice John Vertes froze the NWT assets and properties belonging to former DDC consultant Brian Douglas Fraser.

The action was based on affidavits that accused Fraser of investing money from DDC subsidiaries Northern Aboriginal Services Co. (NASCo) and Shehtah Drilling into his own companies.

Jeremy Hockin, a lawyer with Alberta law firm Parlee McLaws, said he was forced to seek the emergency court injunction against Fraser because of a break-in at DDC's Yellowknife head office during the early morning hours of Feb. 28.

In a sworn affidavit submitted in court Friday, DDC manager Margaret Gorman states someone broke into her office and used her computer to e-mail files to Fraser's computer.

She said her information is based on a forensic report conducted by PricewaterhouseCoopers associate David Guy.

"Certainly, the desire to get to court quickly was prompted by that (break-in)," said Hockin. He represents NASCo, Shehtah, and Atco-Frontec Corporation.

They are currently planning a lawsuit against Fraser and his companies, Fraser Holdings Ltd., Cambridge Consulting Group, 902811 NWT Ltd. and Portage Inn Ltd.

Yellowknife RCMP Cpl. Dino Norris said police are investigating the break-in and said a number of undisclosed items were taken from the office.

Gorman declined to comment on the break-in or the missing money, but said it was "business as usual" at DDC.

"We've got a number of good projects going," said Gorman. "We're continuing to work on those projects and except for this, everything is okay."

According to court documents, Fraser was suspended from DDC by Gorman on Nov. 13, after it was learned that $300,000 was missing from a mutual fund belonging to Shehtah Drilling. Fraser was the company's business manager at the time.

Gorman's affidavit alleges that Fraser began redirecting company assets after DDC refused to pay him $608,867.45 for consulting fees on two invoices he submitted Dec. 11 and Dec. 12, 2001.

According to court documents, Fraser said he was owed that money based on a consulting contract "executed by the Chairman and President on April 28, 2000."

Only a consulting contract signed Jan. 11, 2000 was filed in court.

In her affidavit, Gorman said she had a conversation with Fraser on the day he was suspended, Nov. 13, 2003, and that during that conversation he admitted investing DDC funds into properties of his own in Fort Smith, including the Portage Inn and Fields Store.

Fraser could not be reached for comment.

According to court documents, he lives with his wife Shannon in Calgary.

THE MONEY TRAIL

Affidavits filed in NWT Supreme Court March 5 detail a nearly four-year relationship between Denendeh Development Corporation and Brian Douglas Fraser.

Jan. 11, 2000 - DDC hires Fraser (Cambridge Consulting) as a consultant, agreeing to pay him $6,000 a month and provide an office, computer equipment, telephone and internet access to him at the cost of $300 a month.

March 24, 2000 - Fraser appointed president of Northern Aboriginal Services Co. (NASCo) for a one-year term. He continued in the job until November 2003.

Aug. 1, 2000 - Fraser, acting for NASCo and 902811 NWT Ltd. (Investco), signs an agreement naming Investco as investment agent for NASCo. Investco's office is listed as being located at Fraser's Yellowknife address.

Aug. 2, 2000-June 24, 2003 - 24 "significant cash events" listed in report from PricewaterhouseCoopers.

Dec. 11, 12, 2001 - Cambridge Consulting invoices DDC for $173,340 and $435,527.45 for consulting fees.

Jan. 4, 2002 - In a letter to Brian Fraser of Cambridge Consulting, DDC refuses to pay invoices.

Jan. 6, 2002 - Fraser writes DDC manager Margaret Gorman, asking the DDC board to reconsider its decision.

July 6, 2002 - DDC agrees to pay Fraser $10 to release the corporation from any responsibility for paying the $608,867.45 listed on Dec. 2001 invoices.

Nov. 3, 2003 - In reviewing its Mutual Fund investments with Canadian Imperial Bank of Commerce, Shehtah Drilling discovered $300,000 is missing from the funds.

Nov. 13, 2003 - Gorman and Fraser have a telephone conversation that ends with Gorman telling Fraser to pack up his personal belongings and leave the office.

Dec. 19, 2003 - Lawyer Jeremy Hockin writes Fraser's lawyer, saying Fraser has "a brief opportunity within which to make full restitution of all improperly taken funds."

Feb. 28, 2004 - Shehtah Drilling's office at the DDC is broken into.

March 5, 2004 - NWT Supreme Court Justice John Vertes freezes all NWT assets belonging to Fraser.

THE KEY PLAYERS

The DDC...
Incorporated in 1982, Denendeh Development Corporation is "owned by the Dene of the Northwest Territories." Its board of directors represent the Akaitcho, Deh Cho, Dogrib, Gwich'in and Sahtu First Nations. According to its Web site on the board are: John Bekale, chair, president and CEO (Dogrib representative); Joseph Kochon, vice-president and director (Sahtu); Greg Nyuli, secretary treasurer and director (Deh Cho); James Firth, director (Gwich'in); and Archie Catholique, director (Akaitcho).

Shehtah Drilling...
It is 100 per cent owned by DDC since 1999. The company owns two drilling rigs and two service rigs. In the 2000-2001 drilling season employed about 100 people, most of whom were Dene. Brian Fraser is still listed on Shehtah's Web site as the company's business manager.

NASCo...
Northern Aboriginal Services Company is incorporated as 3265544 Canada Inc. Shareholders are: Denendeh Development Corp., Inuvialuit Development Corp., Nunasi Corp. and the Yukon Indian Development Corp. Its purpose is to identify and develop business opportunities for Northern aboriginals.

Atco Frontec...
It is a Calgary-based company that has operations throughout the NWT and Nunavut with 2003 revenues of $190 million and 1,400 staff (including joint ventures). NWT involvement includes NASCo joint-venture, Tli Cho Logistics (with Dogrib Rae Band), baggage and cargo handling facility for Canadian North in Yellowknife.