Those being sued say they're being unfairly targeted and have done nothing wrong.
The CNIB — an organization that helps visually impaired Canadians — operates lottery booths in stores across Atlantic Canada under a contract with the Atlantic Lottery Corporation, selling ALC products. The charity hires subcontractors to operate the booths.
One of those being sued is Ed House, who ran a CNIB booth at the Walmart in Truro, N.S., for 18 months. The CNIB claims he was responsible for $29,000 in missing funds.
House said he applied for the job after seeing an ad in the newspaper. He said CNIB Atlantic retail gaming manager Paul McCarthy told him he had the "perfect" criteria to run the booth. He was given four days training and then took over.
House said his booth was checked regularly, with McCarthy doing an on-site audit every four to six weeks. House would do his own audit every two weeks and send a copy to McCarthy.
"Right up until the stuff hit the fan, that's the way it went. They were always perfect. Great. Doing a fine job. Carry on," House said about the response to the audits.
'It's pure harassment'
House said there were no problems identified until September 2013, when he was told there was a "shortage" in the account.
In the following weeks, he said, he received conflicting reports on how significant the shortage was.
"It originally started around $3,000," House said. "It went up from $3,000, up to $12,000, down to $7,000, $16,000, went to what they're showing now."
On Nov. 18, McCarthy and two senior CNIB managers from Toronto — manager of gaming operations Corey Taylor and national director of social gaming Steve Kirkland — arrived at his booth, did an audit and shut it down, saying there was a shortage of $29,000. House said he urged them to look harder to find the problem.
"It's pure harassment," he said.
"I kept telling them, 'Guys, you've got to keep checking, it's in your system somewhere.' There's a flaw in there."
Managers implicated in court documents
House said he doesn't know where the money went, but that he didn't take it.
"When they closed me down, the last thing I said to them the day I left, I said, 'I know I did nothing wrong and I'll tell you it is going to come back to bite you because you definitely have got a problem,'" said House.
The three others being sued are in Nova Scotia, New Brunswick and Prince Edward Island. They all deny any wrongdoing.
The Prince Edward Island lottery operator who was sued believes the fault lies with several CNIB managers who "were negligent in the handling of revenue generated at the Summerside store," according to court documents filed in her case.
Her lawyers also suggested CNIB's managers "had converted CNIB monies generated at the Summerside store to their own personal use and were unjustly enriched in the process."
CNIB statement of claim
In a statement of claim, the charity said House is responsible for any and all product and/or cash shortages. It said the "misappropriation of cash and/or products at the CNIB Lottery Centre constituted conversion, breach of contract, breach of fiduciary duty and negligence."
House, whose contract ran from May 17, 2012, to May 17, 2013, said he had asked McCarthy, his manager, to renew the contract, but was told that wasn't necessary.
McCarthy, who is no longer employed by the CNIB, declined CBC's request for an interview.
Truro police investigation
The CNIB filed a theft complaint with the Truro Police Service in November 2013.
Chief Dave MacNeil said officers conducted a thorough investigation and included a polygraph test — which House passed. No charges were laid and MacNeil said the results of the investigation were forwarded to CNIB's head office in February 2014.
"There were no other suspects, no other persons of interest and the investigation was concluded," said MacNeil.
Despite being informed by police that House was not a suspect, CNIB pursued legal action against him. In October 2014, it filed a suit in small claims court against House, seeking $25,000.
House missed the court date, and, as a result, CNIB has a judgment of $26,000 against him.
He said he can't afford a lawyer, but is going back to small claims court later this month in hopes of having the judgment overturned.
"I'm going to show them the police report stating … that as far as they're concerned, I'm totally truthful and definitely didn't do it. I understand they told it to the CNIB this way, that I did not take the money and I have no idea where it went," said House.
"I'm just going with the old saying: if you tell the truth, nobody can hurt you."
Lottery booth operators are not considered employees. Instead, they're independent contractors.
Under their contracts, they agree to "accept full responsibility and liability for any and all products and/or cash shortages" and to "repay to the CNIB in full any costs associated with or damages incurred relating to such product and/or cash shortage."
House and the other operators told CBC News they were required to make several deposits every week to an account managed by the CNIB. They were not authorized to withdraw funds.
The Atlantic Lottery Corporation said it is monitoring the matter between CNIB and its independent contractors. In an email, it said: "Atlantic Lottery was not involved in the decision and is not a party to and is not involved in the litigation process."