The Town of Norman Wells has filed a civil lawsuit against its former senior administrative officer, its former mayor and the former mayor's numbered company, alleging fraud.

"We're alleging that (former SAO) Catherine Mallon inappropriately converted the town's assets for her own use in excess of $1.25 million," says Mayor Frank Pope.
"We're alleging that (former mayor) Nathan Watson participated in Mallon's fraudulent scheme."

Mallon stepped down from her position last November.

In a statement provided to News/North by Watson, he called the lawsuit a "deliberate, malicious attack" by the town's "old guard."

"I simply did not do what I was accused of and believe that the facts, once known in their entirety, will reveal it," he stated.

Pope says no prior members of council are being considered responsible for the situation, nor are any other staff past or present implicated in the alleged crimes.

The Town of Norman Wells announced the lawsuit, as well as the results of a forensic audit that spurred it, at a packed public meeting on May 8.

Pope says there was some concern about the short notice between the announcement of the meeting, which went out the day before the event, but that it was the town's priority to get the information out to the townspeople, in person, before it hit the news.

Information would have become public after the suit was filed that day.

'Very important'
"It's very important that we deal with facts backed by investigation rather than dealing in rumour."

The town asked the GNWT Department of Municipal and Community Affairs (MACA) to conduct a forensic audit after its interim SAO noticed "abnormalities" with Mallon's T4 tax slips, which put her salary for 2016 at more than $500,000, "for a person who should be making $150,00 to $200,000," says Pope.

The audit looked into Mallon's payroll, purchasing and other activities, some of which involve use of the municipality's credit cards.

"The forensic audit results are substantive enough to warrant the filing of a civil suit for alleged fraud."

For his part, Watson says that his administration was scrutinized heavily by MACA around the time of the administration's dissolution, including in an in-depth, third-party municipal review contracted by the department. He says no indications of wrongdoing arose at this time.

Watson and his council were removed from their roles by MACA in October 2017 amid conflict of interest and improper procedure allegations. MACA appointed an administrator to manage the town for a year while making changes to bolster its rules and regulations.

Pope and his council were elected last fall, returning the reins of municipal government to town council.

News/North was unable to reach Mallon for comment by press time.