By Kenneth Jackson
APTN National News
TORONTO – Details of a covert investigation into the Canadian National Railway have emerged from a Toronto courtroom where an Indigenous private eye testified he was hired by a “mystery client” in the United States five years ago with the objective of exposing alleged financial improprieties within the largest railway in Canada.
But Algonquin private investigator Derrick Snowdy also revealed he’s not acting alone.
Snowdy claims to be one of many investigators who make up a secret network with a “larger scheme” to secretly probe CN Rail and its business and operations in North America.
The focus of the investigation, at least in Canada, has seen investigators target, in part, current and former employees of CN for financial records, the railway’s lawyers, CN’s private police force and judges who heard CN’s cases.
Mailboxes were set up for worried railway employees to provide information secretly and, over the course the last five years, Snowdy said he’s collected over 100,000 pages of documents that he’s provided to his client, law enforcement agencies in Canada, including the Ontario Provincial Police, and the U.S, as well as APTN National News.
APTN has been told his client is high profile investor in the U.S.
Snowdy, from the Kitigan Zibi First Nation in Quebec, says investigators have even gone as far as to rummage through the garbage of CN’s lawyers, who have been put under surveillance, and potentially had their telephone records seized.
In one case, Monique Jilesen, a CN lawyer with the firm Lenczner Slaght in Toronto, apparently had her bank records obtained.
“I will tell you, Ms. Jilesen, your recycling has been gone through at your house. Your garbage has been gone through,” testified Snowdy Dec. 19 when CN went to try and get those documents back.
Snowdy denied under oath he was the one who “dumpster dived” her garbage.
CN quickly found out they weren’t going to be able to get any documents as Snowdy removed all of them from Canada in November sensing that CN was going to attempt to get a court order to retrieve them.
“We took exceptional steps to make this as complicated as possible,” said Snowdy, “to protect the identity and safety of people who were cooperating information sources.”
Snowdy testified he flew from Toronto to Ottawa and then to New York with five hard drives and a laptop computer containing all his documents.
It was arranged within the shadowy network to go to The Peninsula hotel in Manhattan and leave the computer hardware in a courier box with the concierge to be picked up later by an unknown person. After that, Snowdy would have no way to retrieve the information.
“Bluntly put, we saw the potential for this type of proceeding to occur, and we went through extraordinary efforts to gather our records that were in my files and remove them from the jurisdiction of the court,” said Snowdy. “It is not my job to protect your client’s information and, in fact, it is my job to find the holes in it. If you can’t protect your information, that’s not my problem.”
Besides the identity of his client, who Snowdy refused to name, CN was particularly interested in documents Snowdy said he obtained from former CN employee Scott Holmes.
Those documents are under a deemed undertaking rule, meaning they’re not allowed to be shared, and part of an ongoing legal battle between CN and Holmes, who was fired in 2008 after he claims he kept raising issues of alleged financial impropriety with his bosses. CN claims he defrauded the company of millions and they’ve been in a bitter legal battle ever since.
The documents in question are, in part, billing and internal emails within CN relating to GO Transit, a Toronto commuter railway, between 2004 and 2008 that allege financial impropriety in the expansion of GO that CN was hired to do.
APTN first reported the allegations in this Sept. 24 story that sparked an internal audit at GO Transit.
CN has denied any wrongdoing.
Snowdy said he became interested in Holmes when criminal charges against Holmes were stayed by the Crown for a second time in 2010.
He said the effort CN seemed to put into fighting Holmes piqued his client’s interest.
“CN was putting a massive amount of resources into essentially demolishing an insignificant problem,” said Snowdy. “What in those files do they not want people talking about? What are they trying to hide? So he became much more of interest to us in the case.”
Snowdy said Holmes turned out to be a small part of the network’s investigation into CN that includes confidential informants that CN attempted learn more about Dec. 20 in a continuation of their emergency cross examination of Snowdy before Justice Frank Newbould in Toronto.
It was then that more information came to light of the covert investigation into CN.
Newbould ordered Snowdy to give up the identity of a source he gave a Blackberry used to communicate with confidential “people related to CN material.”
After much pressing, Snowdy said he gave the phone to the in-house lawyer of the OPP as part of his cooperation with Det. Staff-Sgt. Rick LePage, formerly of the OPP’s anti-rackets unit that investigates corruption.
As it turned out, LePage, who is now working on the OPP’s 2015 Pan Am Games security unit, was in the gallery Dec. 20.
APTN was told LePage left once his name was put on the record.
The OPP has refused to confirm or deny they are investigating CN over the alleged GO misspending, but APTN has reported a detective from the anti-rackets unit had met with Holmes at least five times since early last year collecting thousands of documents Holmes alleged outlined how CN was overcharging GO in the expansion of their commuter rail.
APTN reported the first meeting was in Simcoe, Ont. between Holmes and Det. Bev. Mackey.
APTN can now confirm LePage was present as well.
When contacted by APTN, Snowdy refused to discuss his testimony.
LePage couldn’t be reached.
Newbould ordered Snowdy not to investigate Jilesen and several judges who were part of the Holmes civil suit, but that list did not include Justice Julie Thorburn who began presiding over the CN civil case against Holmes in October when former justice Colin Campbell retired.
On Tuesday, the continuation of the Snowdy action by CN was now before Thorburn.
It’s not immediately clear why it bounced between judges.
Thorburn was asked by CN to order Snowdy to stop providing documents under the deemed undertaking to third parties, including any oral evidence he was aware of.
The deemed undertaking rule is meant for parties of the civil case, such as Holmes, but Snowdy isn’t a party to the civil action and his lawyer Norman Groot told Thorburn she had no authority to issue such an order.
CN argued Snowdy has been a menace and they just want him to stop.
“I want him out of the proceeding. I want him to stop interfering,” said Jilesen.
As for Thorburn she said the main question, for her, is whether she can make the order.
“Can my long arm stretch long enough to stop (Snowdy) from doing what he is doing?” said Thorburn.
That remains to be seen as Thorburn said she would take several days to decide.