Nova Scotia court quashes hospital CEO's conviction for fraud, calls for new trial

N.S. court calls for new trial for Tracy Kitch Nova Scotia's court of appeal has overturned the fraud conviction of former IWK CEO Tracy Kitch.

HALIFAX — Nova Scotia's highest court has quashed the fraud conviction of a children's hospital CEO who used her corporate credit card to pay for $47,000 in personal expenses, including flights for family members and Netflix fees.

Tracy Kitch, former chief executive of the IWK Health Centre in Halifax, was sentenced to five months in jail on Aug. 10, 2022, but she was released on bail pending her appeal.

Defence lawyer Brian Greenspan said Wednesday the Nova Scotia Court of Appeal called for a new trial in a decision issued after a hearing the day before, but the three-member panel did not offer its reasons at that time. Written reasons will be offered later.

"It's difficult to tell what the primary basis was for allowing the appeal," Greenspan said in an interview. "Clearly, there were concerns about the failure of the (provincial court) trial judge to properly consider the very significant evidence of innocence."

It is now up to the Crown to decide if a new trial should be held.

Greenspan said he told the court that Kitch used the card to cover personal expenses, but he argued that her actions were not fraudulent. He said he argued that she had willingly disclosed to the hospital what she had done and was prepared to provide reimbursement, which was in keeping with the hospital's policies.

"Ms. Kitch was consistently open about what was happening," Greenspan said. "She declared that there were personal (expenses) and waited to be invoiced, and waited to reimburse IWK .... It had nothing to do with criminal fraud or dishonesty."

The Toronto-based defence lawyer said there were breaches of internal policies, but those did not constitute criminal fraud. "The credit card policy of the hospital actually set out what you do for reimbursement if you do use the corporate credit card (for personal use)," he said.

Kitch was found guilty of fraud over $5,000 in February 2022. The court heard that between August 2014 and June 2017, she used corporate funds to pay for personal taxis, hotel stays, flights, and iTunes fees, among other things.

During her sentencing hearing, provincial court Judge Paul Scovil said Kitch was a highly paid civil servant who chose to ignore corporate expense provisions for personal financial gain. The judge said Kitch failed to adhere to the high ethical standard her position demanded.

Crown lawyer Peter Dostall told the sentencing hearing that the "public purse is not a bottomless trough from which those lucky few insiders can personally enrich themselves."

Kitch resigned from her position at the hospital in August 2017 after an independent audit was ordered by hospital officials. The audit was prompted by a CBC News investigation that raised questions about her expenses.

This report by The Canadian Press was first published March 8, 2023.

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