Former Montreal school board official recounts fallout from corruption charges

The defense for Caroline Mastantuono, former head of the international department at the Lester B. Pearson School Board, is seeking an absolute discharge after she pleaded guilty to fraud and embezzlement charges in May.

During Tuesday's sentencing arguments, her lawyer, Jonathan Gordon, extensively questioned her about her career. Mastantuono explained that she began managing the school board’s international department in 2003 and was promoted to director in 2013.

In June 2016, she was suspended for financial mismanagement and later fired, along with two of her children who also worked at the school board. By that time, the department had grown from seven students to nearly 800, generating millions in tuition fees.

"I was devastated," said Mastantuono, who was accompanied by her husband and three children in court. "I worked day and night and was proud of the job I'd done."

UPAC Charges Ended Private Business

After her dismissal, Mastantuono started Rising Phoenix International, a company focused on recruiting international students for private colleges. To cover the startup costs, she and her husband mortgaged their home.

By 2019, the business was thriving, and they opened M College in Montreal's LaSalle borough, offering programs from multimedia to early childhood education. Plans to expand included adding new courses and establishing a language school. They sought loans from various financial institutions.

However, in November 2020, Mastantuono and her daughter Christina were charged by Quebec’s anti-corruption unit, UPAC. The charges related to two schemes carried out between June 2014 and March 2016, according to the agreed statement of facts.

The first scheme involved forging tuition receipts to secure Quebec Acceptance Certificates (CAQs) for international students who didn’t meet financial requirements. Staff were instructed to forge 81 false receipts, amounting to over $1.6 million, allowing students to obtain CAQs.

Mastantuono's lawyer argued she did not benefit financially from this scheme, despite being portrayed as a "master fraudster." "Not one cent," Gordon told Quebec Court Judge Salvatore Mascia.

The second scheme involved embezzling funds through unauthorized payments to a recruitment agency owned by Naveen Kolan, a Toronto-based consultant with Edu Edge Inc. Kolan has pleaded guilty to breach of trust and will be sentenced on Dec. 20.

"We Lost Everything"

Throughout Mastantuono's testimony, her children wiped away tears. She described her shock when UPAC officers arrived at her home in 2020. "It was a disaster," she said, tearfully. "I was out of my mind with worry and so scared for my daughter."

The charges caused banks to withdraw their support from Rising Phoenix, and some private colleges they worked with threatened legal action. The COVID-19 pandemic further worsened the situation, as many international students were unable to get study permits, leaving them financially strained without tuition refunds.

In January 2022, Rising Phoenix was forced to close and seek creditor protection. "It was a dark year for our family," she said. "We lost everything."

To meet creditor obligations, Mastantuono and her family sold their cottage and two other properties, raising about $1 million. Unable to work in education, she went back to school and now works as a chef.

Gordon presented 22 letters of support from friends, family, and former colleagues, including Robert Mills, the former director general of Lester B. Pearson School Board.

Crown prosecutor Émilie Robert noted that the school board chose not to provide an impact statement during the proceedings. The prosecution is seeking a conditional discharge with 15 to 18 months of probation, including house arrest and a curfew.

Mastantuono, her daughter, and Kolan initially pleaded not guilty. The charges against Christina were dropped after Caroline’s guilty plea. The judge will announce Mastantuono's sentence on Nov. 22.