The Hayhow Trial - Day 2

Below is another report from Kitchener's The Record...thanks, Brian Caldwell, for continuing to report!

The extent of the Hayhow's expenditures, as outlined in the article, reminded me of something we families found out from the Trustee in Bankruptcy shortly after Imagine's bankruptcy, about how Sue Hayhow's extravagant lifestyle carried over into her work as the head of Imagine Adoption:  That when she travelled to Ethiopia to work with staff there and to spend time in orphanages, etc, she purchased first class/business class airfare at agency expense, and stayed at the most expensive, five-star hotel in Addis (in fact, my recollection is that she rented, often for weeks at a time, one of the private, three-floor villas on the hotel compound, complete with private swimming pool, gym, and butler service).  We visited that hotel for an hour or so when we were there, to exchange money and observe the hotel in all of its reputed splendour (it is an amazingly luxurious hotel and spectacular), but we were sickened when we saw that surrounding the hotel's compound was a massive wall; totally impoverished families made their homes using the exterior of that hotel wall as a wall of their home, to which they somehow attached pieces of plastic and canvas to provide shelter.  The juxtaposition of such squalor beside such grandeur was difficult to see.  Walking through the hotel gates was like walking from a barren dessert into an oasis of gold.  And this is where Sue Hayhow stayed when she traveled, at a cost of many thousands of dollars (compared to $40-60/night where the five of us stayed, including breakfast).  While she was being filmed caring for the poorest in the world, while she was being interviewed by television programs about Imagine's work there with the poorest of the poor, while children in the adoption agency's transition home were being fed one Mr. Noodle packet/day, she was provided for in the grandest of style and luxury in a walled compound.  And although the cost of these accommodations (often for weeks at a time while she was in Ethiopia) was likely a legit business expense, the utter inappropriateness of it speaks to the character of the husband-wife team currently on trial.

Anyway, the information that came out at trial today actually makes me feel physically ill.   Imagine Adoption took in millions of dollars from families waiting to adopt and in just 2.5 years, this is how some of it was spent.  I have few more words on the subject tonight.  

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Here's the link to today's article:  Credit Card Charges at Imagine Adoption totalled $850,000

Have a read:

Credit charges at Imagine Adoption totalled $850,000

By  Brian Caldwell

KITCHENER — A former couple who ran an international adoption agency charged about $850,000 to corporate credit cards in the 2 ½ years before it went bankrupt.

The expenses of Rick and Susan Hayhow were outlined at their fraud trial Wednesday by a forensic accountant who poured over financial records for police during an 18-month probe of Imagine Adoption.

Scott McBride could not say, however, if all the charges were for legitimate business purposes or not.

That left jurors with just a glimpse of the spending habits of the Hayhows, who broke up a few months before the nonprofit Cambridge agency collapsed five years ago.

Columns of figures projected on a screen in Kitchener court showed an agency card in the name of Rick Hayhow, the chief financial officer, racked up almost $500,000 in purchases from early 2007 to mid 2009.

Included were $57,000 for airfare, $40,000 for other travel expenses and $21,000 at restaurants.

The travel amount included $5,600 spent at a Disney Resort. Almost $2,000 was charged at the Air Canada Centre in Toronto, including $683 for seats for an unspecified event and $37 on souvenirs.

An agency card in the name of Susan Hayhow, the executive director, was used for just over $350,000 in purchases during the same period.

There were $100,000 in charges for airfares and $150,000 for other travel expenses, including $55,000 for hotels.

A charge of $13,000 was listed under Maple Leaf Sports, while purchases totalling more than $6,000 were made at high-end clothing store Holt Renfrew.

Crown prosecutor David Foulds went quickly over the credit card expenditures while questioning McBride, and jurors got virtually no explanation of them.

Other evidence showed the credit card bills were paid through various agency bank accounts, plus about $36,000 from personal accounts held by the Hayhows.

Rick Hayhow, 49, and Susan Hayhow, 48, pleaded not guilty to eight fraud counts involving hundreds of thousands of dollars in alleged personal expenses.

Six of the counts involve payments made with agency cheques for renovations at the couple's old stone home on Roseview Avenue in Cambridge and the purchase of a $3,000 horse.

Evidence on those counts Wednesday included an employee who testified the Hayhows paid $13,000 with an agency cheque for two fences and a backyard pergola.

The trial has heard two companies that renovated the house also did extensive work at Imagine's offices.

Defence lawyer Michael Lacy, who represents Susan Hayhow, has repeatedly suggested that his client directed the home improvements, while Rick Hayhow paid for them.

Lacy put it to one witness that Susan Hayhow was in Africa when the suspect agency cheque for fencing was made out.

An umbrella organization for three related agencies, Imagine grew rapidly and took in millions of dollars in fees from families hoping to adopt children from overseas, primarily Ethiopia.

As outlined by McBride, its finances were a confusing web of transfers between numerous bank accounts held by the three agencies.

The bankruptcy shocked more than 400 clients across the country who had spent up to $20,000 or more and were at various stages of the lengthy adoption process.

The trial is expected to last at least another week.

bcaldwell@therecord.com