The Ontario Public Service Employees Union has filed a $6-million lawsuit that accuses former executives of using union funds to help purchase a sprawling property in Ottawa that was then rented to the union at a premium.
OPSEU is attempting to recover losses – which it claims amount to more than $1.5-million – from a plan allegedly orchestrated by former vice-president and treasurer Eddy Almeida, former financial administrator Maurice Gabay and an acquaintance, Sava Gambiroza.
The lawsuit, filed Wednesday in Ontario Superior Court, is the latest in a series of legal actions the union’s new leadership has pursued in an attempt to scrutinize how union money was used by previous OPSEU executives under the leadership of former boss Warren (Smokey) Thomas.
None of the allegations have been proven in court. Mr. Almeida and Mr. Gambiroza did not respond to a request for comment. Mr. Gabay’s lawyer, Alex Minkin of Rudner Law, told The Globe and Mail in a statement that his client had no comment on the matter.
OPSEU is one of Canada’s largest public-sector unions, with more than 180,000 members. Its main source of revenue is union dues.
Since 2006, according to the lawsuit, OPSEU had rented a unit in a building in southeast Ottawa for use as a regional office. Its lease with the owner of the building, Skyline Commercial Real Estate, was set to expire in September, 2019, but just months before the end of the lease, the lawsuit alleges, real estate firm Colliers International Group Inc. contacted Mr. Gabay to inquire if the union would be interested in purchasing the entire building from Skyline.
Former OPSEU vice-president countersues union, denies breaching any fiduciary duty
Rather than take the request back to the union’s executive board, Mr. Gabay spoke with Mr. Almeida and told Colliers that the union was in fact not interested in purchasing the property but a group of “private investors” were.
According to the lawsuit, the union had indeed expressed interest in the past in purchasing the property because it needed more space for its regional office and wanted to avoid renting indefinitely.
Regardless, in May, 2019, Mr. Gabay submitted a proposal to purchase the property for $2.35-million on behalf of a company called JG Design. Mr. Gambiroza signed the letter of intent to purchase. Colliers asked questions about JG Design – specifically how it was connected to OPSEU. Mr. Gabay said there was no affiliation between OPSEU and JG Design.
In June, states the lawsuit, a new company, 2525 Real Estate Holdings, was incorporated for the purpose of purchasing the property. Mr. Gambiroza was listed as its sole director and officer and JG Design, Mr. Almeida and Mr. Gabay as direct or indirect owners. The new company eventually paid $2.56-million for the property.
OPSEU says it has since learned that the deposits and down payment for the property – a total of $684,000 – actually came from union funds. Between 2019 and 2022, according to the lawsuit, JG Design billed OPSEU for approximately $1.6-million in consulting services that OPSEU claims were not legitimate. Specifically, in May, 2019, around the time of the Ottawa property transaction, JG Design invoiced OPSEU for $686,000 in “purported services – virtually the same amount paid for the purchase of the property.” The lawsuit ultimately accuses Mr. Almeida and Mr. Gabay of conspiring with Mr. Gambiroza and devising an arrangement in which JG Design and 2525 Real Estate Holdings would use OPSEU money to fund the purchase of the property.
Furthermore, the union claims it was forced to continue leasing units within the property at an inflated cost, without knowledge that the new owner of the property had ties to Mr. Gabay and Mr. Almeida. The union’s monthly rent, according to the lawsuit, ballooned from $11,153 per month to $20,030 per month. OPSEU claims that between 2019 and 2023 it paid a total of $1.1-million in rent to 2525 Real Estate Holdings.
“OPSEU has suffered damages,” the lawsuit states, “including the payment of invoices for services that were not rendered and the payment of rent for the property that it would not otherwise have had to pay if it had been transferred ownership of the property.”
In a statement, OPSEU president JP Hornick said that, because the union had commenced legal action, it was limited in terms of what it could say publicly. “However, our commitment to fight for our members and build a stronger union remains unshakeable,” the statement said.
This is the third lawsuit filed by OPSEU against former senior union officials in the span of six months, the result of a forensic audit undertaken by Hornick and vice-president and treasurer Laurie Nancekivell.
In January, OPSEU accused Mr. Thomas (who had been at the helm of the union for 14 years, until his retirement in April, 2022) of improperly using millions of dollars in cash and assets, including union dues, for personal enrichment. That lawsuit also accused Mr. Almeida and Mr. Gabay of misappropriating union funds.
Mr. Thomas and Mr. Gabay, according to OPSEU, allegedly withdrew almost $700,000 in cash from a strike fund and received “significant compensation” from the union that they were not entitled to. OPSEU also accused the men of transferring union-owned vehicles to themselves and their family members.
Mr. Thomas has since called the claims bogus, saying the current leadership is waging a “nasty, political campaign” against him because of his affiliation with Ontario’s Progressive Conservative Party. Mr. Gabay and Mr. Almeida have also denied the allegations.
In March, OPSEU launched a $24-million lawsuit against Mr. Almeida, Mr. Gabay and a third union employee Stephen Ward, alleging they had orchestrated a series of schemes that awarded union maintenance and security contracts to associates and companies they were personally invested in. That lawsuit accused the three men of personally enriching themselves through those schemes by receiving kickbacks, in the process costing the union as much as $30-million.
Mr. Gabay and Mr. Ward have maintained their innocence, denying that they were involved in schemes of any sort. Mr. Almeida has yet to respond to the second lawsuit.
Vanmala Subramaniam