‘It sickened me’: victim of $70K payroll scam at Errington sawmill speaks out

An agreed statement of facts revealed Merkel inflated paycheques of inactive current and past employees then deposited funds into her personal bank account.

Merkel’s actions saddled multiple employees with increased tax liabilities, while her employer was hit with an extra $38,700 in overpayments in benefits for a total loss of $109,000.

Victims included a single mother who lost valuable government GST and child tax benefits.

Orcutt, whose late father co-founded the Errington operation in 1986, fired Merkel in 2018, several months before the brazen payroll scam came to light.

The massive scam at the 50 employee shop came into focus in February, 2019 when a worker complained about tax return discrepancies.

Orcutt’s investigation showed the employee was credited for an additional 80 hours of work, while the direct deposit for the pay period had been changed to Merkel’s personal bank account.

“After I phoned the police I wasn’t allowed to talk about it for some time. It sickened me, I went home those nights, I was disgusted, I was hurt, I felt like I had been used,” Orcutt said, who emphasized she struggles with significant trust issues.

Merkel was arrested on Aug. 1, 2019, the same year the mill shut down.

Merkel was accused of selling mill inventory on the side for cash — allegations which didn’t result in charges.

Crown prosecutor Brett Webber told court Merkel has three prior convictions for similar workplace scams dating back to 2001 in Port Alberni.

On May 15, 2009 four days after receiving her second non-custodial sentence for theft over $5,000, Merkel was arrested for suspected impaired driving.

Webber said during the traffic stop a Mountie noticed suspicious financial documents in Merkel’s car, leading to a conviction for fraud over $5,000 and possession of stolen property.

Merkel defrauded her then employer out of $10,050 while working as a bookkeeper and was sentenced to nine months in jail.

Webber is lobbying for a two year provincial jail sentence for Merkel followed by 18 months probation with numerous conditions.

He is strongly opposed to Merkel’s lawyer suggesting another non-custodial sentence is appropriate punishment.

“It’s a concern of the Crown given her track record that a (conditional sentence order) is being asked for again, or sort of other variation that isn’t imprisonment,” Webber told court.

Merkel’s pre-sentence report explained she had no excuse for her actions and accepted responsibility. Merkel rationalized her behaviour as need money to pay for bills, her children’s sports and stemming from stress and a lack of sleep.

“She was noted in the report to admitting to being engaged in self-sabatoged behaviour during her time at Errington Cedar and that jail didn’t seem like such a bad place as it was an escape from her perceived stress of life,” Webber said, who stated the offender has failed to demonstrate serious remorse for her actions.

Psychiatrist reports cited concerns Merkel lacked remorse and insight into her offending and is at a medium-to-high risk to re-offend.

Webber said there’s no evidence to the defence’s claim Merkel prescribed use of Oxycodine at the time impacted her offending.

Defence lawyer Babak Zargarian told court Merkel was previously diagnosed with depression and lacked proper coping skills to handle a prior sexual assault and previous partners who were abusive.

“One year of counselling was not enough, there needs to be ongoing years of serious counselling. That can be addressed with a (non-custodial sentence) for two years and a probation order for three years after that,” Zargarian argued.

He said Merkel is remorseful and intends to pay back the money she defrauded.

Zargarian said his client lost her jobs with a forestry company and at a restaurant after her guilty plea was publicized, hampering her efforts to pay restitution.

He said Merkel signalled a desire to change careers with the intention of pursuing a job involving her First-Aid training.

Merkel declined to comment when asked by the judge if she had anything to say.

Justice David Crerar reserved his sentence for a later date.

The maximum penalty for fraud over $5,000 is 14 years in prison with the sentencing range varying wildly.

The Crown dropped a second charge against Merkel of theft over $5,000.

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On Twitter: @reporterholmes

by Ian Holmes

‘It sickened me’: victim of $70K payroll scam at Errington sawmill speaks out

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