A former accountant for a Saskatchewan First Nation who admitted to stealing money from the people he used to work for has been sentenced to five years in prison.
Hugo Gallegos pleaded guilty to taking more than $5.8 million from the Whitecap Dakota First band between 2009 and 2013.
Wednesday morning Saskatoon Court of Queen’s Bench heard how Gallegos lived a lavish lifestyle with multiple trips to Las Vegas, extravagant gifts for friends, and a $700 shopping spree just for socks.
“It’s ridiculous, I don’t think I’ve spent $700 on socks in 67 years,” Whitecap resident Nancy Linklater said after the sentencing.
“When I first heard about it I was shocked, totally shocked. I was devastated, I burst into tears and just prayed for our chief and council that they could stand strong still.”
Dozens of members of Whitecap filled the seats in the courtroom, including Whitecap Dakota Chief Darcy Bear.
“He was stealing our money and living a lifestyle that he didn’t earn,” Bear said. “It’s a horrible feeling when somebody comes in and steals the hard work (from) not just me as the chief, as a leader, but the community.”
Although the sentencing included an order for restitution of $5.8 million to the First Nation, Bear said he doesn’t believe they will ever recover the money from Gallegos.
“At the end of the day this criminal is not going to win. We are a strong resilient people and we are going to make sure we move forward,” he said. “That’s the bottom line here.”
The First Nation recently filed civil suits against Royal Bank of Canada and the auditing firm KPMG, who they say should have recognized the fraud.
Bear added that since Gallegos’ action came to light, the First Nation also changed their staff and regulations in the accounting departments.
In August, Gallegos pleaded guilty to two counts of theft over $5,000 and two counts of fraud over $5,000. Gallegos also pleaded guilty to laundering the proceeds of crime and possession of property obtained by crime.
Details of those charges came out in court where the Crown prosecutor Robin Ritter alleged that Gallegos wrote cheques to himself out of the First Nations accounts and then “fudged the books” by making the accounts payable and receivable overstated. Over four years Gallegos wrote 1,785 cheques amounting to $100,000 in 2009 and growing to over $2.4 million in 2012.
Ritter said during that time Gallegos would buy $1,000 gift cards and give them to friends. He would tip upward of $100 to servers, went on monthly holidays, and bought designer clothing. Court heard that during the investigation police opened Gallegos’ storage locker to find 200 pairs of high-end shoes valued at $200,000. Ritter also said an employee at a Saskatoon shop Gallegos frequented recalled him spending $700 on socks in just one shopping trip.
According to the Ritter, the impact on the victims was like taking $19,000 from every man, woman and child on the Whitecap Dakota First Nation.
An audit in 2013 caught wind of some irregularities and soon after Gallegos left the country.
Defense attorney Chris Lavier said although Canada does not have an extradition deal with El Salvador, Galagos returned to “face the music.”
Gallegos came to Canada from El Salvador as a refugee during the country’s civil unrest in the late 90s and was diagnosed with PTSD because of the experience. He began working as a cleaner and carpenter before entering the College of Commerce at the University of Saskatchewan. He graduated in 2005 with a major in accounting and worked with the College of Physicians and Pricewaterhouse Coopers before being employed as an accountant at Whitecap in 2009.
Lavier argued that while working with the First Nation, Gallegos faced racism and discrimination because he is gay. Lavier also alleged that Gallegos did not act alone and that another employee, who no longer is employed by the First Nation, showed him how to write and deposit the cheques.
Lavier said Gallegos developed a gambling addiction while working at the First Nation and suffered from several mental and physical challenges.
Gallegos took the opportunity to address the court and said he was sorry to friends, family and the Whitecap Dakota First Nation for “getting caught in the craziness.”
“I am so sorry that it went this way. I got caught to (being) someone that I wasn’t , I didn’t recognize myself. I am so sorry,” Gallegos said.
“I just think that there were so many things that I regret that I did and I should have been stronger to say ‘no I will not do that’ but I got caught in a lot of fears and a lot of things that it was not me, it was not what I believe, it’s not what I believe this country is about.”
Justice Richard Danyliuk accepted the joint submission for five years in a federal penitentiary and retribution saying “I accept you are a person with some physical and mental health issues but other people have issues and don’t resort to criminality.”
“It was lying, it was cheating, it was stealing and for what? It wasn’t to support your family or a cause. It was to support a lifestyle that was excessive,” Danyliuk said.
Crown prosecutor Ritter said the gross recovery of the stolen funds was $552,100 but because of expenses net recovery was only $32,000. He added that Gallegos’ former partner returned a cooler filled with cash, mostly $100 bills, to police totaling $143,000. Other people who received gifts or cash from Gallegos also brought it to police when they found out where it had come from.