12/11/2012 09:26 EST | Updated 02/10/2013 05:12 EST

Former Vancouver city treasurer facing new fraud charges

A disgraced former treasurer for the City of Vancouver has been charged with defrauding a Richmond, B.C., company while he was serving house arrest for stealing more than $200,000 from taxpayers.

Sandy Maddalena will appear in Richmond Provincial Court in January, charged with defrauding Kirk Integrated Marketing from May 2004 to May 2006.

It was during that period, in June 2005, that a Vancouver Provincial Court judge spared Maddalena jail time after he was convicted of using his position as city treasurer to siphon money from public coffers.

While working as city treasurer, Maddalena wired $217,000 in city funds into his own investment accounts. The incident sparked questions about the city's hiring policies, because Maddalena secured the job as treasurer despite having declared personal bankruptcy three times.

He pleaded guilty to fraud over $5,000 in May 2005. At the time, Judge Catherine Bruce gave Maddalena an 18-month conditional sentence because he had a terminal illness.

“I am also mindful that as result of the terminal illness that you suffer from that your life expectancy is very limited,” Bruce said in her reasons for sentence.

“To place you in jail at this time would be tantamount to a death sentence, and in British Columbia, and in Canada, we do not give death sentences.”

But in her reasons for sentence, Judge Bruce noted that Maddalena wasn't driven to crime by personal circumstances, but rather for the "sole motive" of personal satisfaction and gain.

During the first 12 months of his conditional sentence, he was under house arrest, allowed outside his residence only for the purpose of traveling to and from work.

Still alive and facing new charges

More than seven years later, Maddalena is still alive — now on bail with conditions which forbid him from engaging in any activity in which he has access to other people's money.

The new charges were sworn in September. Although details are unavailable, in 2008 a Chilliwack Supreme Court judge ordered Maddalena to pay more than $260,000 in damages to the alleged victim, Kirk Integrated Marketing.

According to the company's statement of claim, Maddalena allegedly started working at Kirk Integrated Marketing six months after the City of Vancouver fired him in April 2001. He worked as an accounting clerk with special responsibilities for payroll from Oct. 29, 2001, to Aug. 31, 2006.

The company accused him of manipulating payroll records to change his pay to an amount far beyond his wage.

"This conduct was particularly reprehensible in that [Maddalena] perpetrated his fraudulent conduct to take the money of the [company] when he knew the [company] was most vulnerable, because the owner of [the company] had died and the wife of the owner of the [company] was grieving the loss of her husband and entrusted the defendant to honestly prepare the payroll."

In a statement of defence, Maddalena denied having done anything wrong. He was unavailable for comment on Monday.