Adoption Fraud: Canadian Agency Imagine Adoption, Inc. UPDATED

Rick and Susan Hayhaw of the defunct Imagine Adoption, Inc. have been “jointly with one count of breach of trust, six counts of fraud over $5,000 and three counts of fraud under $5,000. Individually they have each been charged with one count of fraud over $5,000.

Over $420,000 in agency funds are alleged to have been used for personal expenses including vacations, clothing and renovations to their Cambridge residence.”

They have been released and will return to court on May 26, 2011.
Two charged in adoption agency fraud investigation
[CTV Southwestern Ontario 4/8/11]

Imagine Adoption went bankrupt in 2009 leaving many Ethiopia and Ghana prospective adoptive parents in the lurch. More coverage about Imagine Adoption can be found at Plaintiff Pap blog and PoundPup Legacy Imagine Files.

Update: “While the operators of an Ontario adoption agency were allegedly squandering their clients’ money on vacations, a horse and clothes from Holt Renfrew, food was running out for dozens of children living at the agency’s Ethiopian “transition home.”

“Kitchener lawyer Ted Giesbrecht arrived at the complex in July 2009 to find a mountain of unpaid bills, adoption files in disarray and 46 children existing on “a kind of grain.”

“I would say they were not getting enough to eat,” Giesbrecht said in a recent interview after fraud and breach of trust charges were laid against Rick Hayhow, 46, and Susan Hayhow, 45.”

““We knew it was bad,” Giesbrecht said. “There were allegations of food running out. Liquids running out. Certainly money had run out long ago.”

After landing at Bole International Airport, he went straight to the home, in a residential section of the city. “The facility was in good shape physically and was a modern, spacious, clean and bright place for children to live while waiting for their adoptions to be completed.”

“The courtyard and play areas were also well-outfitted and clean.”

But “it was true they were lacking food and lacking supplies and (staff) had not been paid for a considerable period of time,” Giesbrecht said.

The children, who were living at the home during the final stages of the adoption process and waiting to fly to Canada with their new parents, were between three months and three years old.”

“The home had $31,000 in unpaid bills for food, rent, hydro and remuneration to staff.”

“Pearson, a Toronto-based mining company, Yamana Gold Inc., had donated $100,000 to keep the transition home afloat” and were able to get the money to Ethiopia to pay the bills.

Children underfed at Ethiopian ‘transition’ home run by Imagine Adoption: lawyer
[The Toronto Star 4/24/11 by Tracey Tyler]

The orphanages that Imagine/Kids Link worked with in 2009 is described in this Word document .

Kingdom Vision, Selam, Birhan and Hope are the four mentioned.

Kingdom Vision had 3 orphanages: 1 each in Addis, Nazaret and Wolaita.

Selam orphanage is in Adama. See their website.

Birhan is of the five orphanages investigate in 2001 for suspect abandonments. It is also mentioned in the Fruits of Ethiopia ACT report .

“Hope” may be Hope Community Services (HCS), an orphanage that Children’s Hope International is currently working with.

Update 2: “A  couple charged with fraud after allegedly buying personal items using thousands of dollars given to a non-profit agency will be back in a Cambridge court June 23.”

“Their lawyers appeared in court today on behalf of the couple.”

Imagine Adoption operators back in court in June
[CTV Toronto 5/26/11]

Update 3: “Prosecutors are planning for an extended and complicated trial when two former leaders of Imagine Adoption get to court and face fraud charges.

A trial date hasn’t yet been set for Susan Hayhow and Rick Hayhow, who were charged after the financial collapse of the overseas adoption agency.

Susan Hayhow was Imagine’s executive director. Rick Hayhow was its chief financial officer.
They were first in court in May and the case has been repeatedly moved ahead. It was discussed briefly again in Cambridge provincial court Thursday where it was clear prosecutors are gearing up for a time-consuming trial.

“We’re looking at weeks and weeks at trial, we have all these computer records to go through,” said Crown prosecutor Steve Paciocco.

The Hayhows are jointly charged with breach of trust, six counts of fraud over $5,000 and three counts of fraud under $5,000. Each faces an individual count of fraud under $5,000.

The cases are being watched by one Crown attorney as they move forward to a trial date. Paciocco was concerned about more delays after Susan Hayhow’s decision to fire Toronto lawyer Edward Greenspan three weeks ago and retain another lawyer.

Michael Lacy of Toronto told court he was taking over her defence, but didn’t have all the required paperwork to confirm that fact. He wants to move to a preliminary hearing quickly, once he is formally retained.

Rick Hayhow wasn’t in court, nor was his lawyer Randy Martin of Kitchener. Another lawyer spoke for Martin. He could only agree to a court date next week when the Hayhows and their lawyers could all stand in front of a justice of the peace together to sort out future court dates.

Imagine Adoptions arranges overseas adoptions for Canadian families.

Waterloo Regional Police, and Royal Canadian Mounted Police started investigating the company’s finances after if went bankrupt in the summer of 2009.

Imagine is now out of bankruptcy with new management, after families involved contributed $4,000 each to revive it. Adoptions have resumed.”

Officials wrestle with court dates for Imagine Adoption case
[The Record 11/24/11 by Kevin Swayze]

Update 4: “Rick Hayhow, who was chief financial officer of the Cambridge-based agency, Imagine Adoption, may plead guilty to the charges, his lawyer said Monday outside Kitchener’s Ontario Court.

Susan Hayhow, the agency’s former executive director, wants a preliminary hearing on her charges. Such a hearing is held to determine if there is enough evidence to go to trial.

The Hayhows were jointly charged with breach of trust, six counts of fraud over $5,000 and three counts of fraud under $5,000. Each also faces an individual charge of fraud under $5,000.

More than 400 clients hoping to adopt children from a variety of countries, mostly Ethiopia, were left in limbo after their adoption agency went bankrupt in July 2009.

Waterloo Regional Police began investigating allegations that more than $300,000 was charged to agency credit cards for personal purchases, including trips to Disney World, New York City and the Deerhurst Resort in Muskoka, spa visits, home renovations and a horse and saddle.

The couple drove leased luxury vehicles and paid themselves a combined income of $320,000 a year.

The couple separated about four months before the bankruptcy. Susan Hayhow began a relationship with another key member of the agency.

Hundreds of families across Canada had paid up to $15,000 to adopt children from overseas and were thrown into turmoil.

The agency was saved and adoptions resumed after most clients voted to pay an extra $4,000 apiece to keep it going. A new board of directors and new management were brought in.

Prosecutor David Foulds said in an interview he is continuing discussions with Richard Hayhow’s lawyer, Randy Martin, “in hopes a resolution can be accomplished.’’

Martin confirmed that a plea “is quite possible.’’

On May 9, Susan Hayhow’s lawyer, Michael Lacy, will set a date for a two-week preliminary hearing, possibly in the summer.

“Miss Hayhow’s not entering a plea of guilty,’’ Lacy said.”

Imagine Adoption case held off again
[The Record 4/2/12 by Dianne Wood]

REFORM Puzzle Piece

Update 5: Breach of Trust charges DROPPED, Fraud charges remain in the first day of a three-day preliminary hearing.

“Rick and Susan Hayhow, operators of the former Cambridge-based international  adoption agency, are in court facing fraud charges.

The preliminary hearing for the now estranged couple began Monday  morning.

It’s been three years since the non-profit Imagine Adoption Inc. filed for  bankruptcy, leaving hundreds of families in Canada hoping to adopt in limbo.

In 2011, the couple was charged with breach of trust, as well as numerous  fraud charges, both jointly and individually.

Police have alleged the couple spent around $420,000 of the agency’s funds  on personal items like clothing, vacations, cars and home renovations.

As the hearing began Monday, the breach of trust charges were withdrawn by  the Crown.

Susan’s attorney Michael Lacy says “The Crown determined, quite properly,  that there was no reasonable prospect for conviction, but yes, the breach of  trust charge can be a very serious fraud allegation and in this case it’s no  long a charge my client is facing.”

The preliminary hearing is scheduled to continue for three days, but Lacy  says it could wrap up sooner.

There is no judge present as it has already been decided the case will go to  trial. The hearing is for discovery, allowing defence lawyers to question  witnesses.

“There’s a number of witnesses to be called,” Lacy says, “there’s no need for  a judge for these purposes and that was an agreement that the parties came  to.”

A publication ban is in place on the evidence and testimony at the  hearing.

Affected families react

Many families waiting to adopt were hit hard when Imagine filed for  bankruptcy in 2009.

Angela and Brian Sandau were one of about 400 families left in limbo, not  knowing if their son, now an active two-year-old, would ever make it to Canada  from Ethiopia.

Addis has now been in Canada since May 2011, but Brian says at the time “We  didn’t know if we were ever going to become parents.”

For the Keizer family, the process to adopt daughter Makeda was supposed to  take a year, but ended up taking nearly four years.

Mom Ashleigh Keizer documented the trials on her blog, ‘The Keizer Family  Five,’ calling it “the hardest thing I’ve ever been through.”

But they were the lucky ones. For other families adoption plans came to a  halt. Ingrid Phaneuf is a former client who says her family lost thousands in  fees.

“We lost $15,000 and it wasn’t money we’d saved up. It was money that we  scrambled, fundraised and took out of our credit line. We are still paying it  off.”

Phaneuf eventually dropped the international adoption and instead became the  mother of two older children from Ontario.

The Sandaus realize that while their story is a positive one, others are  still trying to deal with the repercussions.

Angela says “For us it’s a lot easier to deal with the news of the court  case and everything because we have Addis, so we had a happy ending, but a lot  of families still haven’t had theirs yet.”

The stress of the situation led to divorce in some cases, the Sandaus add,  while some who eventually did get their children are still trying to manage the  fallout of the process.”

 

Imagine adoption operators appear in kitchener court

[CTV news 8/20/12]

Update 6: “One of 12 charges was dropped Monday as a preliminary hearing began for the estranged couple who ran a Cambridge adoption agency that went bankrupt.

Rick and Susan Hayhow are no longer accused of breach of trust in relation to spending money held in trust for clients trying to adopt children from overseas.

But they are still expected to go to trial on 11 counts of fraud for allegedly blowing more than $420,000 on themselves while running Imagine Adoption.

The suspect expenses on agency accounts from 2007 to 2009 include family vacations, high-end clothing, home renovations, cosmetic dental surgery, and a horse and saddle.

More than 400 families across Canada were devastated when the Cambridge-based agency — which primarily arranged adoptions from Ethiopia — collapsed amid scandal just over three years ago.

Financial concerns were raised after it came to light that Susan Hayhow, now 46, was having an affair with a key employee and board member whose wife also worked at the four-year-old agency.

Susan Hayhow was the executive director of Imagine, an umbrella organization for three related agencies. Rick Hayhow, now 47, was chief financial officer.

A court order prohibits publication of evidence at the preliminary hearing, which heard from several witnesses in a Kitchener courtroom.

But committal for trial is not expected to be at issue when the hearing concludes later this week.

Rick Hayhow and his lawyer declined comment outside court.

Susan Hayhow also politely declined because of the ongoing proceedings, but referred questions to her lawyer.

“She has consistently maintained she did not commit any criminal offences and she still maintains that position,” Michael Lacy said.

Crown prosecutor David Foulds said the breach of trust charge was withdrawn because there was no reasonable prospect of conviction.

The couple had a combined income of about $320,000 and drove expensive leased vehicles while running the non-profit organization.

Police investigated for more than 18 months — including the examination of volumes of financial documents — before charging the Hayhows last year.”

Trial expected in alleged Imagine Adoption fraud case

[The Record 8/21/12]

Update 7: “Three more charges were dropped Wednesday as the estranged husband and wife behind an international adoption agency were committed to stand trial for fraud.

Rick and Susan Hayhow initially faced a dozen counts related to hundreds of thousands of dollars allegedly spent on personal items while they ran Imagine Adoption.

Eight charges now remain after the prosecution withdrew four counts during a two-day preliminary hearing that wrapped up in Kitchener court.

Three of the dropped charges related to cheques written to a home renovation company. Further investigation by police determined they were for legitimate business expenses.

The Hayhows consented to their committal for trial on the remaining counts.”

“The case returns to court in late September to begin the process of setting dates for a trial.”

Executives to stand trial on eight charges in Imagine Adoption fraud case

[The Record 8/22/12 by Brian Caldwell]

Update 8: “The case of a former couple accused of ripping off an international adoption agency has been delayed while they try to get the charges against them thrown out.

Rick and Susan Hayhow were scheduled to go on trial early next month in relation to hundreds of thousands of dollars in alleged personal expenses while they ran Imagine Adoption.

But the jury trial is on hold so they can argue their constitutional rights have been violated because prosecution of the case has taken too long.

A hearing into that issue — which could result in dismissal of the eight counts they face — is now slated to be held in Superior Court in Kitchener.

The Hayhows were charged in April 2011 following a fraud investigation by Waterloo Regional Police that lasted more than 18 months.

The probe came after the collapse of the Cambridge-based agency in July 2009, leaving more than 400 adoptive families across Canada in limbo at various stages of the lengthy process.

Susan Hayhow, now 47, was executive director of the agency when it went bankrupt amid scandal involving her affair with Andrew Morrow, a key employee and board member whose wife also worked there.

Hayhow has since married Morrow and runs a business, Stiletto Staging, doing design and real estate stagings in the Toronto condominium market.

Rick Hayhow, now 48, was chief financial officer when suspect expenses were charged to the four-year-old agency — which primarily arranged adoptions from Ethiopia between 2007 and 2009.

Included were family vacations, high-end clothing, home renovations, cosmetic dental surgery, and a horse and saddle.

The couple had a combined income of about $320,000 and drove expensive leased vehicles while running the Christian, non-profit organization.

A year ago, after a preliminary hearing, they were committed to stand trial on eight of 12 fraud-related charges initially laid by police.

The trial is now on indefinite hold pending the outcome of their unreasonable delay application under the Charter of Rights and Freedoms. ”

Adoption fraud suspects want charges thrown out

[The Record 8/23/13 by Brian Caldwell]

Update 9: “A former couple accused of defrauding an international adoption agency attended court Wednesday for a pre-trial motion.

Rick and Susan Hayhow, who have been committed to stand trial on eight fraud-related counts, sat on opposite sides of a Kitchener courtroom as the two-day hearing began.

Details of the motion — even its general nature and purpose — can’t be reported after Justice Peter Hambly ordered a publication ban to protect their right to a fair trial.

The Hayhows were charged in April 2011 following an 18-month police investigation into hundreds of thousands of dollars in suspect expenses at Imagine Adoption from 2007 to 2009.

Included were family vacations, high-end clothing, home renovations, cosmetic dental surgery, and a horse and saddle.

The police investigation came after the Cambridge-based agency collapsed in July 2009, leaving more than 400 adoptive families across Canada in limbo.

Imagine Adoption went bankrupt amid a scandal involving Susan Hayhow’s affair with Andrew Morrow, a key employee whose wife also worked there.

Susan Hayhow, now 47, was executive director of the agency, which primarily facilitated adoptions from Ethiopia. She has since married Morrow.

Rick Hayhow, now 48, was chief financial officer before leaving the four-year-old agency with a year of severance pay in the wake of the scandal.

A scheduled Superior Court jury trial was delayed by the pre-trial motion. A new date for the trial, if it goes ahead, has not been set.”

Ex-couple back in court in Imagine Adoption fraud case

[The Record 9/4/13 by Brian Caldwell]

Update 10: The trial is scheduled for Mid-June 2014.

“The prosecution of a former couple accused of ripping off an international adoption agency is back on track after a pre-trial motion wrapped up Friday.

Rick and Susan Hayhow are scheduled for a two-week jury trial in mid-June on eight fraud-related counts in connection to Imagine Adoption.

The Cambridge-based agency, which primarily facilitated adoptions from Ethiopia, went bankrupt in July 2009 in the wake of an internal scandal.

After an 18-month police investigation, the Hayhows were charged in April 2011 with claiming hundreds of thousands of dollars in suspect personal expenses from 2007 to 2009.

Included were family vacations, high-end clothing, home renovations, cosmetic dental surgery, and a horse and saddle.

The Hayhows were initially charged with 12 counts, but four were withdrawn by the prosecution during a preliminary hearing more than a year ago.

They were slated to face a jury this week on the eight remaining charges before the trial was delayed by a pre-trial application.

Details of the 2½-day hearing, including even the general nature and outcome of the application, can’t be reported because of a publication ban ordered by Justice Peter Hambly.

After ruling on the motion, Hambly suggested the trial itself be set for January. That wasn’t acceptable to defence lawyer Michael Lacy, who represents Susan Hayhow, due to other commitments.

As a result, the case was delayed nine more months until Hambly’s next availability in June.

By then, it will have been almost five years since the collapse of Imagine Adoption left more than 400 adoptive families across Canada in limbo, and more than three years since the Hayhows were charged.

The agency failed amid scandal involving executive director Susan Hayhow’s affair with a key employee and board member she has since married.

Rick Hayhow was chief financial officer of the Christian, non-profit agency when the suspect personal expenses were allegedly paid by cheque and charged to credit cards.

Both attended the pre-trial motion, appearing to sit as far as possible from each other in one small prisoner’s box.”

 

Trial rescheduled for 2014 in Imagine Adoption fraud case

[The Record 9/6/13 by Brian Caldwell]

Update 11:”Almost five years after the collapse of an international adoption agency, charges against the former couple at the centre of the scandal will finally be aired starting Monday.

Rick and Susan Hayhow — the key executives at Cambridge-based Imagine Adoption — are scheduled to go on trial for eight fraud-related offences involving hundreds of thousands of dollars in suspect personal expenses.

To be decided over the course of about two weeks in Superior Court in Kitchener, the high-profile case has taken longer to get before a jury than the four years the non-profit Christian agency was actually in operation.

An umbrella organization for three related agencies, Imagine left hundreds of would-be parents across Canada in limbo when it went bankrupt in the summer of 2009.

Susan Hayhow, now 48, was executive director of the agency, which primarily facilitated adoptions from Ethiopia.

Rick Hayhow, now 49, had already left his post as chief financial officer with a year of severance pay following a revelation his wife was having an affair with Andrew Morrow, a married employee and board member.

Fallout from the affair led to financial scrutiny by other board members, who were surprised to discover the Hayhows had a combined income of about $320,000 while they both drove expensive leased vehicles.

Also raising eyebrows were questionable expenses — including family vacations, high-end clothing, cosmetic dental surgery, home renovations and a horse — that had allegedly been billed to the agency.

Directors concluded Imagine was in too much of a financial bind to recover and put the agency into bankruptcy.

An estimated 400 clients, some of whom had spent $20,000 on the lengthy process to adopt a child from overseas, were devastated.

Imagine had just $500,000 in bank accounts, while clients left in the lurch by the collapse initially filed about $3 million in claims as part of the bankruptcy process

While most families scrambled to resurrect the agency by putting even more money into it, board members also went to police with suspicions of financial wrongdoing.

After an 18-month investigation by Waterloo Regional Police and the RCMP that included the examination of reams of documents, the Hayhows were charged in spring 2011.

Often seeming to sit as far away as possible from each other, they have since had numerous court appearances and a preliminary hearing to reach this point in the prosecution.

The trial is expected to begin with jury selection Monday, followed by the start of evidence Tuesday.”
Five years later, Imagine Adoption couple up for trial[The Record 6/13/14 by Brian Caldwell]

Update 12: “A former couple pleaded not guilty Monday to defrauding a Cambridge-based agency that arranged the adoption of poor children from overseas.

Rick and Susan Hayhow were the key executives at Imagine Adoption, which went bankrupt almost five years ago in the midst of a scandal involving infidelity and suspect expenses.

The fraud allegations, to be tried in Kitchener court over the next two to three weeks, involve hundreds of thousands of dollars spent on home renovations, vacations and high-end shopping.

One of the eight counts outlined as the trial began with jury selection Monday concerns the purchase of a horse and saddle.

Hundreds of would-be parents across Canada were devastated when the fouryear-old agency, which primarily facilitated adoptions from Ethiopia, collapsed.

An umbrella organization for three related agencies, Imagine Adoption collected fees of $20,000 or more per child to guide clients through the adoption process.

A nonprofit Christian organization, it came under financial scrutiny by directors after Susan Hayhow had an affair with board member Andrew Morrow, and Rick Hayhow left with a year of severance pay.

Susan Hayhow, now 48, was the executive director, while Rick Hayhow, now 49, was the chief financial officer. On top of an expensive leased vehicle each, the Hayhows had a combined income of about $320,000.

The trial in Superior Court is expected to hear from about a dozen witnesses, including two directors who went to police with concerns about expenses and Morrow’s former wife, who was an agency employee

The Hayhows are jointly charged with six counts of fraud involving cheques written on agency accounts. In addition, they are charged individually with using an agency credit card for personal expenses.

Crown prosecutor David Foulds is expected to make his opening address today following the selection of the last three jury members.”

Adoption agency fraud trial gets underway in Kitchener

Update 13: “Jurors were shown several cheques Tuesday that were used to pay for home renovations and a horse by a former couple accused of defrauding an international adoption agency.

Susan and Rick Hayhow were the key executives at Imagine Adoption in Cambridge before it went bankrupt five years ago amid a scandal involving infidelity and alleged fraud.

They are now on trial in Superior Court in Kitchener in relation to hundreds of thousands of dollars in alleged personal expenses charged to two of three related agencies that operated as Imagine.

Three cheques totalling about $50,000 went to the Canadian Home and Renovation Team, a Kitchener company that did extensive work at the couple’s old stone house on Roseview Avenue in Cambridge in late 2007 and early 2008.

A fourth cheque for $3,000 was used to buy a horse from a Blenheim-area woman a few months before the organization collapsed in the summer of 2009.

The cheques were all signed by the Hayhows and drawn on accounts held by two of the agencies that operated under the nonprofit Imagine umbrella.

In an opening address to the jury, Crown prosecutor David Foulds said there will also be evidence about agency cheques used to pay for fences, a pergola and flooring at the home.

An agency credit card, meanwhile, was allegedly used by the Hayhows from early 2007 to mid-2009 to pay for vacations, chiropractic treatments, dental work, jewelry, clothes and other personal expenses.

“We’ll do our best to try to make the trail clear for you,” said Foulds, noting finances at the related agencies often overlapped.

Imagine — which primarily facilitated adoptions from Ethiopia — began to unravel after the couple’s marriage broke down in the spring of 2009 over an affair Susan Hayhow had with a board member.

After her estranged husband agreed to leave the four-year-old agency with a year of severance pay, a new member of the board of directors began to scrutinize its finances.

It was placed into bankruptcy soon after, stunning about 400 couples across the country who were then at various stages of the costly, lengthy adoption process.

Fraud charges were laid following by an 18-month investigation by the RCMP and the Waterloo Regional Police.

Foulds didn’t specify how much money is allegedly involved in the eight fraud counts at issue in the trial, which is expected to last two to three weeks.

Defence lawyer Michael Lacy, who represents Susan Hayhow, suggested through questioning of the first two witnesses that Rick Hayhow was responsible for paying bills.

He introduced several personal cheques, mostly made out by Rick Hayhow, that were also used to pay for improvements including new kitchens and bathrooms at the home.

Foulds told jurors that Imagine grew rapidly as hopeful parents “lined up” for help and Susan Hayhow, the executive director, spent a lot of time travelling.

“She may have been distracted from the business, if you will, by personal matters,” he said”

Adoption agency cheques paid for horse and home renos, jury hears[Metro News 6/18/14]

“Documents shown to jurors Thursday suggest personal purchases on a company credit card were declared by the woman who ran an international adoption agency.

Susan Hayhow, 48, is on trial with her former husband, Rick Hayhow, 49, for allegedly defrauding Imagine Adoption of hundreds of thousands of dollars before it went into bankruptcy five years ago.

But during cross-examination of a forensic accountant hired by police, defence lawyer Michael Lacy introduced several internal monthly expense reports from the Cambridge agency.

The reports listed categories to specify the nature of expenses on an agency card in the name of Susan Hayhow, including one labelled “personal.”

Lacy led the expert prosecution witness, Scott McBride, through a comparison of credit card bills and corresponding monthly expense reports.

Where the bills showed suspicious purchases, the reports showed they were placed in the “personal” column.

“No one ever brought this to your attention or asked you to look at it?” asked Lacy.

“No,” McBride answered.

Included were $200 charges at a Cambridge hair salon, about $1,000 spent in Florida during an apparent family vacation, almost $500 for patio furniture and over $3,000 in purchases in one month at high-end clothing store Holt Renfrew in Toronto.

Lacy, who represents Susan Hayhow, said the monthly reports were found by police at Imagine’s offices, but it has not been made clear who prepared them.

He suggested an agency policy allowed the personal use of company credit cards as long as the expenses were properly declared and tracked.

Lacy also suggested through McBride — who spent hundreds of hours analyzing 12,000 pages of banking documents for police — that other agency employees had corporate credit cards.

“You didn’t know that?” Lacy asked.

“No,” McBride answered.

The period examined by McBride covered about two and a half years before Imagine went into bankruptcy, shocking 400 families across the country then in various stages of the overseas adoption process.

He acknowledged he doesn’t know the source of about $85,000 already in two key agency bank accounts at the start of period examined.

McBride also agreed with Lacy that agency founders could have provided that money from their own pockets, then drawn it out in various ways as repayment in later years.

After noting alleged personal expenses at issue in the trial total less than $300,000, Lacy highlighted the fact an accounting firm was paid $365,000 for its work after the agency fell into financial turmoil.

Allegedly fraudulent expenses include renovations at the former couple’s Cambridge home, vacations, a horse and saddle, cosmetic dental surgery and clothing.

Still in its first week, the trial on eight counts of fraud is expected to last another week or more.”

Adoption executive declared expenses, records suggest[The Record 6/19/14 by Brian Caldwell]

Update 14:”The fraud trial of Rick and Susan Hayhow came to an abrupt end Wednesday following the discovery of new information by the prosecution.

A mistrial was declared by Justice Peter Hambly after jurors had heard more than a week of evidence involving suspect expenses at Imagine Adoption prior to its collapse amid scandal five years ago.

The former husband and wife were the key executives at the Cambridge-based agency, which primarily facilitated adoptions from Ethiopia.

The Hayhows are still jointly accused of using agency cheques and separately accused of using corporate credit cards for about $300,000 in personal expenses in the 2 ½ years before the agency’s high-profile failure in the summer of 2009.

But in light of information he received just this week, Crown prosecutor David Foulds said he must reassess the entire case and decide whether or not to pursue the Hayhows further.

“It falls to me to consider the new information and figure out its implications,” he said, adjourning the case to a scheduling court in late July.

Susan Hayhow, now 48, was the founder, executive director and driving force behind the agency, which rapidly grew to take in millions of dollars in the four years it operated.

Rick Hayhow, now 49, was hired as the chief financial officer after Imagine had been in business for about a year.

The new information concerns a discussion Rick Hayhow had in the spring of 2008 with a clerk for the agency’s accounting firm, which was then doing a review of its year-end finances.

Another employee of the accounting firm, Graham Mathew Chartered Accountants, told Foulds on the eve of his expected testimony about finding notes on the discussion in an agency file.

According to those notes, court heard, Rick Hayhow disclosed using an agency cheque to pay $13,500 for fences at the couple’s home and there was talk about repayment or including it as part of his pay.

One of eight fraud charges against the couple specifically involves payment for the fences with an agency cheque.

If true, the disclosure and repayment discussion also undermine the Crown’s overall theory that the Hayhows defrauded the agency through deceit and dishonesty.

“This represents a significant blow to the Crown,” said defence lawyer Michael Lacy, who represents Susan Hayhow.

The mistrial was declared, in part, because jurors would have had to wait in the wings while police investigated further and Foulds considered his options.

Also a key consideration was that defence lawyers didn’t have the information before the trial began in order to plan their strategies.

Hambly readily granted their request for a mistrial, which was not seriously opposed by Foulds.

“I think the case has really been tainted,” Hambly said.

If a new trial is held, it would likely be months away due to scheduling considerations.

Imagine was an umbrella organization for two related non-profit adoption agencies and a related charity aiming to build a village in Ethiopia with excess funds.

About 400 families across Canada were at various stages of the adoption process — with some already matched with children — when the Christian organization went into bankruptcy.

The financial mess was discovered after Susan Hayhow had an affair with a married employee and board member, leading to Rick Hayhow’s departure with about $140,000 in severance pay and continued use of a leased vehicle.

The questionable expenses included home renovations, vacations, high-end clothes, cosmetic surgery, season’s tickets to the Toronto Raptors and the purchase of a horse.”

Imagine Adoption fraud case ends in mistrialThe Record 6/26/14 by Brian Caldwell]

Update 15:“A man who defrauded a Cambridge adoption agency pleaded guilty to one count of fraud in Kitchener court Friday.

Rick Hayhow, 49, former chief financial officer of Imagine Adoption and his ex-wife, Susan Hayhow, 48, were charged with defrauding the international adoption agency of about $300,000 in personal expenses before the agency failed.

Court heard that between January 2007 and May 2009, Rick Hayhow, who was given a corporate credit card, charged personal expenses to the credit card as well using agency cheques totalling $86,970. So far, $14,766 has been paid back.

Some of the expenses included travel, clothing and meals.

Hayhow, who is now divorced, is expected to be sentenced in February, said Crown prosecutor David Foulds.

Foulds said he will wait to review a pre-sentence report before determining an appropriate sentence for Hayhow.

Susan Hayhow was not in court Friday and her charges of fraud remain before the court. It is expected her trial will be held in July.

She pleaded not guilty to fraud charges after Waterloo Regional Police finished an 18-month investigation.

Susan Hayhow’s lawyer, Michael Lacy, said his client has been consistent with her plea of not guilty.

“A guilty plea by Mr. Hayhow is not a guilty plea by her,” he said in an interview Friday.

A trial was held against the former Cambridge couple in June, but ended abruptly in a mistrial when new information came to light about suspect personal expenditures at the agency.

The new details involved a discussion Rick Hayhow had in the spring of 2008 with a clerk for the agency’s accounting firm about the $13,500 spent on fences at the couple’s home. Notes found in a file suggest Hayhow disclosed that the fences had been paid for with an agency cheque and there was talk about how the money would be repaid.

This led Foulds to reassess the case because it undermined the Crown’s overall theory that the agency was a victim of deceit and dishonesty.

The former husband and wife were key executives at the agency, which primarily facilitated adoptions from Ethiopia. About 400 families were at various stages of the international adoption process when the bankruptcy of Imagine occurred in summer 2009.

Imagine Adoption grew rapidly in four years when executive director Susan Hayhow took over the non-profit Christian agency.

Her then-husband left the agency with about $140,000 in severance pay in the wake of his wife’s affair with a married agency employee and board member.

The scandal prompted a closer look at the books by board members, who seized control of the agency and went to police after uncovering alleged spending irregularities.”

Financial officer in Imagine Adoption fraud case pleads guilty[ The Record 11/28/14  by Liz Monteiro]

Update 16: Well it has been 4 years, a they finally reached an insane plea deal.

“Clients affected by the collapse of Imagine Adoption were informed this week that a deal has been reached for founder and executive director Susan Hayhow to resolve the criminal case against her on Monday.

In an email inviting victims to submit impact statements, Crown prosecutor David Foulds said that if the deal goes ahead, Hayhow, 49, would admit to a single count of fraud involving more than $46,000 in expenses on a corporate credit card.

In return, Foulds said, he and a lawyer for Susan Hayhow would jointly recommend she receive six months of house arrest followed by 18 months with a nightly curfew.

That is the same penalty imposed on her former husband, Rick Hayhow, 50, in February after he admitted using his corporate credit card to pay $87,000 in personal expenses while acting as chief financial officer.

Imagine Adoption, which primarily facilitated adoptions from Ethiopia, collapsed in the summer of 2009 amid a scandal involving infidelity and suspect expenses, including trips and cosmetic surgery.

About 400 families across Canada were at various stages of the costly adoption process when the non-profit Christian agency, started by Susan Hayhow as a one-person operation, went into bankruptcy.

The original charges against the former couple — laid after an 18-month investigation by Waterloo Regional Police — alleged about $300,000 in misspending in the two years before the four-year-old agency failed.

Susan Hayhow was scheduled to go on trial on multiple fraud charges in Superior Court in Kitchener for the second time in July.

The first trial, which involved both Rick and Susan Hayhow, ended in a mistrial last June following a revelation the couple discussed repayment of some personal expenses with the agency’s accountants in 2008.

That flew in the face of the prosecution’s contention the Hayhows hid all their personal purchases, a development Foulds said in his letter “irreparably damaged” the case against them.

Going to great lengths to explain and justify the proposed plea deal, Foulds also told affected clients that it was difficult to tell why financial records at the agency were such a mess when they came under scrutiny.

“It is not clear to investigators or me … at what point in time it was that the Hayhows began acting dishonestly, as opposed to incompetently, or selfishly, or even carelessly,” he wrote.

Foulds said other factors in the decision to accept the proposed plea deal included the fading memories of witnesses and a lack of documentary evidence, especially in relation to Susan Hayhow.

“To accept Susan Hayhow’s offer to plead guilty to criminal fraud forecloses the possibility of her acquittal of all charges,” he wrote. “On the present state of the evidence, that is a very real possibility.”

While outlining the proposed deal, Foulds was careful to stress judges aren’t bound by joint sentencing recommendations if they believe they would bring the justice system into disrepute.

Problems at Imagine Adoption came to light after Susan Hayhow had an affair with a married employee and board member, Andrew Morrow, whom she has since married.

Christi Hunter, the lawyer for Rick Hayhow, told his sentencing hearing that their 24-year marriage was crumbling when he resorted to crime in an effort to save it.

“He seemed to be trying to please his ex-wife by living in a style they couldn’t afford,” she said.

Justice Patrick Flynn described it as a case of blind love leading to “blind greed.” He also placed Rick Hayhow on two years of probation following his two-year conditional sentence.

The former couple’s combined income while at the helm of Imagine Adoption was about $320,000 a year, plus the use of two leased luxury vehicles.

Suspicious expenses that raised red flags for board members included home renovations, family vacations, high-end clothes, season’s tickets to the Toronto Raptors and the purchase of a horse and saddle.

If the proposed plea deal goes ahead Monday, it would include an agreed statement of facts outlining the specific admissions of wrongdoing by Susan Hayhow.”

Plea deal expected to end Imagine Adoption fraud case[The Record 4/29/15 by Brian Caldwell]

Update 17:“It was a case that included marital infidelity and allegations of fraudulent use of a corporate credit card to pay for cosmetic surgery, trips, clothes and even a horse.

All this involving officials with a non-profit, Christian international adoption agency based in Cambridge that went bankrupt, dashing the hopes of hundreds of families across Canada. The criminal case ended Monday with no fireworks as Susan Hayhow, the former executive director of Imagine Adoption, quietly pleaded guilty to fraud in a no-jail deal.

Hayhow, 49, the founder and “leader,” according to Justice Andrew Goodman, was sentenced to house arrest when the judge agreed to a joint submission from the prosecution and defence after Hayhow pleaded guilty to one count of fraud over $5,000.

She will serve six months of house arrest followed by 18 months with a nightly curfew — the same sentence Rick Hayhow received in February after pleading guilty to the same charge. Rick Hayhow, 50, was the chief financial officer of Imagine Adoption and was married to Susan Hayhow.

The case dates back to the summer of 2009. About 400 families across Canada were at various stage of the costly adoption process when the non-profit Christian agency, started by Susan Hayhow as a one-person operation, went into bankruptcy.

Imagine Adoption, which primarily arranged adoptions of orphans from Ethiopia, collapsed amid a scandal involving personal expenses — including trips, clothes, cosmetic surgery and a horse — charged to corporate credit cards.

Problems came to light after Susan Hayhow had an affair with a married employee and board member, Andrew Morrow, whom she later married.

Then, following an 18-month investigation, police jointly charged the Hayhows with breach of trust, six counts of fraud over $5,000 and three counts of fraud under $5,000. Each faced an individual count of fraud under $5,000.

The original charges against the former couple alleged about $300,000 in misspending in the two and a half years before the agency failed. The former couple’s combined income while at the helm of Imagine Adoption was about $320,000 a year, plus the use of two leased luxury vehicles.

In the end, all the charges except one count of fraud against each were dropped. Rick Hayhow acknowledged $87,000 in personal charges on a corporate credit card. Susan Hayhow admitted to $46,000.

Susan Hayhow was ordered to pay back $20,000. Rick Hayhow must pay back $15,000.

The no-jail sentences for the two Hayhows reflected weaknesses in the prosecution’s case that came to light during an aborted trial of the two last summer. Worried it may not have enough evidence to convict, the prosecution accepted guilty pleas with house-arrest sentences.

Determining the moment Susan Hayhow’s conduct went from honest to dishonest “is a difficult question,” Crown prosecutor David Foulds said Monday.

Her defence lawyer, Philip Norton, made it clear that Hayhow is not guilty of breach of trust and Imagine Adoption wasn’t a “sham” agency. According to an agreed statement of facts, misuse of funds was not the sole cause of Imagine Adoption’s financial troubles.

The Hayhows were allowed to use corporate credit cards for personal expenses, as long as those expenses were paid back, Norton said, adding that she relied on Rick Hayhow to do that but he didn’t.

“She offered to pay back the money long before she was charged,” Norton said. She didn’t end up paying it back due to a dispute over how much she owed.

Foulds, reading from the statement of facts, said Hayhow acknowledges she had a personal responsibility to ensure she paid off her personal expenses.

He said the Hayhows started Imagine Adoption with good intentions.

“There was no scheme here,” Norton said. “There was no coverup.”

He painted Susan Hayhow as a victim of years of media coverage that “maligned” her.

“It destroyed her reputation,” he said.

Norton said Hayhow hasn’t worked for 18 months because of the publicity from the case.

He said she lost her job after police arrested her at a retirement home where she was working. Today, she has no money and no income, Norton said.

“She’s lost everything. She has no family support.”

Norton said one of her daughters recently had a baby but won’t let Susan Hayhow visit because she believes what she read in the media.

Before delivering the sentence, Goodman read 16 victim impact statements.

He read out loud some comments from people who planned to adopt an orphan through Imagine Adoption.

One woman said she felt “forlorn” after calling the agency and getting no answer. A couple said they felt “violated” by the bankruptcy.

“Pay us back by making a positive impact,” one woman wrote. “Choose good over evil, choose love over hate.”

The judge asked Hayhow if she had anything to say before sentencing. Hayhow appeared too choked up to speak.

Goodman said some people probably wanted to see Hayhow jailed and said that’s likely to happen if she breaches any of the conditions of her sentence.”

hImagine Adoption’s former executive director gets house arrest for fraud[The Record 5/4/15 by Brian Caldwell]