Winnipeg financial firm facing federal probe over ‘potential inappropriate payments’ to First Nation - APTN NewsAPTN News

Winnipeg financial firm facing federal probe over ‘potential inappropriate payments’ to First Nation

Jorge Barrera

APTN National News
An ongoing federal financial probe of a Manitoba First Nation’s use of land claim settlement dollars extends into the community’s dealings with Winnipeg-based financial firm Usand Group, according to a document obtained by APTN News.

Indigenous Affairs contracted auditing firm Deloitte LLP in early 2016 to conduct a financial review of Peguis First Nations’ use of money from a trust fund created by a multi-million dollar land settlement agreement. The financial probe is focusing on $22 million from the trust fund used in a joint venture to redevelop a horse race track in Winnipeg, according to a document outlining the terms of reference for the financial review.

However, Indigenous Affairs also wanted auditors to examine dealings between the First Nation and a financial firm currently under a separate Indigenous Affairs investigation related to allegations around the use of financial incentives to secure deals, according to the document.

The terms of reference directed Deloitte to review “potential inappropriate payments by Usand Group” to Peguis Fist Nation “or its representatives.”

The document does not provide any details about these potential payments.

Under the terms of reference, Deloitte’s investigators were required to glean information on Usand’s interaction with Peguis by reviewing paper and electronic documents, including emails, collected from the First Nation, along with interviews of connected individuals.

Usand president Sean McCoshen issued a statement to APTN saying he has not been contacted by the department about any probe.

“As far as I am aware, The Usand Group is not under investigation by INAC. I am not aware of any basis that INAC would have to investigate The Usand Group. Neither I nor The Usand Group have been contacted by INAC in respect of an investigation or any complaints regarding me or The Usand Group,” said McCoshen in an emailed statement to APTN. “We are proud of the work that The Usand Group has done in First Nations communities across Canada. We are especially proud that, working together with (Peguis First Nation), we succeeded in moving multiple economic and social development programs forward that have had a direct and positive impact on the community.”

Usand has filed court action against APTN over previous stories on kickback allegations against the firm and McCoshen’s link to a failed plan to establish a Cayman Island’s-based trust fund targeting First Nation dollars.

“The Usand Group and I have commenced litigation against you, the APTN and others in respect of previous articles published about us containing statements and other claims which we allege are defamatory and malicious,” said McCoshen, in his statement.

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Winnipeg financial firm denies CEO floated “financial contribution” to ex-FN chief to obtain retraction on ‘kickback’ claim

Indigenous Affairs previously revealed in 2016 it had launched a separate probe of Usand following an APTN investigation into the firm’s alleged use of “kickbacks” to secure financing deals with First Nations. This probe is ongoing, according to a May 23 emailed statement from Valerie Hache, a spokesperson for Indigenous Affairs.

“The investigation regarding allegations from various First Nations elected officials related to the Usand Group is still ongoing. No further information is available at this time,” said Hache, in the statement.

Usand CEO Sean McCoshen. Website image

Usand CEO Sean McCoshen. Website image

Barry Kennedy, a former chief of Carry the Kettle First Nation in Saskatchewan, filed a police complaint against Usand which is now in the hands of the RCMP in Manitoba. Kennedy recorded a phone conversation with a Usand official who offered him money.

APTN also obtained an internal Usand document that identified the use of “kickbacks” as a tactic in securing customers for the company. In a letter from the financial firm’s lawyer, Usand claims the internal document was a draft never seen by McCoshen.

Morris Shannacappo, a former chief of Rolling River First Nation, also alleged McCoshen offered him an incentive to retract a claim the Usand president offered him $100,000 to secure a business deal with his community.

McCoshen, through his lawyer, has denied both allegations.

The recent revelation that Usand is also part of the wider Peguis First Nation financial review means the Winnipeg financial firm is now the subject of two separate department probes.

However, Deloitte’s Usand examination is only one branch of the wider Peguis financial review.

The main focus of the financial review is focused on the $22 million used from the trust fund created by the settlement dollars for a joint venture to redevelop Winnipeg’s Assiniboia Downs horse race track.

“(Indigenous Affairs) received allegations that the previous chief invested approximately $22 million from the First Nation trust fund into a questionable business venture,” said the terms of reference. “More specifically, the funds were to be used for a land purchase. However, the First Nation has not received title to any property.”

The complaint was filed by Cindy Spence while she was chief of Peguis First Nation. She questioned the actions of her predecessor Glen Hudson, who was chief from 2007 to 2015.

Hudson recently regained his post after beating Spence in an election this past March.

APTN also provided the terms of reference to Hudson’s lawyer Jamie Kagan who responded with a statement.

“You have provided an unsigned document that calls for an inquiry into something that can be achieved in a title search which takes two minutes,” said Kagan, in the statement. “This document calls for a draft report to be prepared by August of 2016. I do not see any evidence of an active inquiry into the Peguis First Nation. We can again confirm we have no request for information from anyone doing any so-called audit.”

The RCMP in Manitoba has an open investigation into related allegations related to the use of Peguis First Nation’s land settlement trust fund. The RCMP investigation, triggered by a complaint from a Peguis First Nation band member, is currently on hold pending the completion of Deloitte’s financial review.

The time frames for the allegations sent to the RCMP and Indigenous Affairs correspond with Hudson’s previous terms as chief for Peguis.

Usand recently partnered with famed Indigenous architect Douglas Cardinal to create the Douglas Cardinal Housing Corporation.

Cardinal’s lawyer Michael Swinwood told APTN the architect is currently unware of any allegations concerning Usand.

jbarrera@aptn.ca

@JorgeBarrera

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2 Responses to “Winnipeg financial firm facing federal probe over ‘potential inappropriate payments’ to First Nation”

  1. jdouglas370@gmail.com'
    ninigiwaydinnoong June 6, 2017 at 8:40 pm #

    What a mish mash. He said, she said, they say!.. Any TREATY signed after 1763 Royal Proclamation is not allowed to infringe on any part of that Treaty and “TRUST FUND”!!!
    Funny how INAC is able to pull out the “an Indian can only sell through THE CROWN ploy” when it suits them. The TRUST is real my brothers and sisters and I do speak from knowledge. From jails to our children, the law we follow has been broken. We have no obligation to THE CANADA nor IT to us. The CANADA is a parasite sucking the substance from our food. To comprehend what I am saying fully, it would take at least 2 days to explain it all. I have been to some of our communities already and they see what the truth really is and are now standing with real ammunition.

  2. info@usand.ca'
    Sean McCoshen June 1, 2017 at 9:15 pm #

    Mr. Barrera chose to omit substantial portions of my statement demonstrating that his only source at INAC was unable to substantiate any of his claims about me or our company and casting serious doubt on his impartiality and the fairness, completeness and accuracy of his reporting.

    Here is the full statement:

    Dear Mr. Barrera,

    The following is our comment in response to your request.

    On May 25, 2017, you emailed me claiming, “USAND is part of a financial review launched of Peguis First Nation.” You claimed “this is the second probe by INAC of your firm, according to the department.” You asked if I was willing to comment.

    Later that day, you emailed me a document you claimed was from INAC and a sentence you claimed was the “full statement” from INAC purportedly confirming your claim that “USAND is under a separate financial probe.” You did not identify who gave you this statement or when. The statement reads, “The investigation regarding allegations from various First Nations elected officials related to the Usand Group is still ongoing. No further information is available at this time.”

    Multiple requests for basic information that would enable us to verify with INAC that your claims were accurate, or this statement was given, were denied, quite rudely, by your lawyers. It was only after it was pointed out how unfair this was and violated basic journalistic standards and ethics that, reluctantly, we were advised of the INAC source of your claims, Valerie Heche, in the communications department.

    Ms. Heche, your only source, confirms that she gave you this statement but she was unable to confirm your claims. She does not know anything personally about audit or investigations work and she said that her primary function is simply to field inquiries for media and direct them to the relevant department.

    It is troubling that you would take Ms. Heche’s one line statement and warp it into claims that she, your only INAC source, was unable to verify.

    As far as I am aware, The Usand Group is not under investigation by INAC. I am not aware of any basis that INAC would have to investigate The Usand Group. Neither I nor The Usand Group have been contacted by INAC in respect of an investigation or any complaints regarding me or The Usand Group.

    We are proud of the work that The Usand Group has done in First Nations communities across Canada. We are especially proud that, working together with PFN, we succeeded in moving multiple economic and social development programs forward that have had a direct and positive impact on the community.

    The Usand Group and I have commenced litigation against you, the APTN and others in respect of previous articles published about us containing statements and other claims which we allege are defamatory and malicious.

    In the event you choose to publish another article in relation to these matters, you must disclose this litigation. You must also publish the full contents of this statement. This is to ensure that readers (or viewers) have a fair opportunity to judge your impartiality.

    Finally, I understand that you contacted one of our junior employees after hours by phone and treated her in a rude and harassing manner. Going forward, I must insist that all inquiries relating to me or The Usand Group be directed to our COO, Erinn Mah, or our lawyers. There is absolutely no justification for you to treat our hard working staff like that.

    Sean McCoshen