On-Site Magazine

CN denies fraud allegations made by former employee

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October 2, 2013 by On-Site Magazine

CN has released a statement rejecting allegations by a former employee that it defrauded GO Transit on commuter rail infrastructure projects in the Greater Toronto Area.

Scott Holmes, former program supervisor for CN based in Toronto, claims GO Transit was unaware CN was installing previously worn track materials as part of the contract to expand rail capacity on the agency’s Lakeshore West Line.

He accused CN of billing GO Transit and Ontario taxpayers for network improvements that were unnecessary for commuter rail, including undercutting the overpass at Snake Road to facilitate CN freight trains.

And he says CN billed GO Transit for unrelated expenses such as hotel rooms outside of the Lakeshore West project area.

CN strongly refutes the allegations and has filed a lawsuit in the Ontario Superior Court of Justice against Holmes, suing him for misappropriated funds.

CN claims both sides agreed the construction projects for GO Transit would be completed on a fixed-price basis and that there would be four steps in the construction management process: project scoping and definition, contractual agreement on fixed prices, on-site construction monitoring and post-completion inspection and final payment.

“CN is deeply concerned with allegations of financial improprieties in connection with its work on behalf of GO Transit since 2004. CN and GO Transit developed a rigorous construction management process that assured financial integrity, cost certainty, quality work and strict oversight,” said Sean Finn, executive vice-president, corporate services, and chief legal officer at CN.

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