Company destroyed by Kelowna woman who embezzled $840,000

Kelowna businessman Scott Musgrove put years of hard work and effort into the small company he hoped would one day be something much bigger.

His firm, Nexus Dock and Marina, employed a dozen people and, like all companies, had good and bad years. But by spring 2019 the firm was close to bankruptcy and he called for some independent advice.

The advisor couldn’t understand why a firm doing so many sales could be losing so much money.

The expert delved into the company’s books and uncovered a sophisticated and well-thought-out scheme where company money was transferred to fictitious clients and ended up in the bank account of the company’s bookkeeper, Lorna May Eng.

On Oct. 29, Musgrove stood in a Kelowna courtroom and relayed the intense impact the theft had had.

“She was someone we trusted deeply,” Musgrove said. “That trust was violated in a devastating way.”

From 2015 to 2019, Eng stole roughly $840,000 from the small firm. In 2020, the company sold its assets at a loss and closed up. A dozen people lost their jobs.

Musgrove said the embezzlement had a profound financial and emotional impact on his life and his business.

“The betrayal by someone I trusted so deeply affected my ability to trust others in business,” he said. “What happened did not just destroy a company. It damaged relationships, reputations and a sense of security I once had.”

Having that destroyed by someone he trusted was the most painful experience of his life, he said.

“Beyond the financial loss, the emotional toll has been immense. I spent years dealing with the aftermath, trying to understand how this could happen, working through the legal and financial consequences,” he said.

Eng was a widowed mother in her early 40s when the company hired her in 2013. She has no criminal record or known history of fraud. She had control over the company’s purse strings and wrote cheques, paid invoices and maintained the records.

Crown prosecutor Jessica Saris said Eng’s scheme was complex and lengthy, and she attempted to conceal what she did. On occasion she wrote company cheques and paid them into her own bank account.

“Ms. Eng refuses to accept any responsibility for her actions, has no insight into the gravity and seriousness of her crimes, and shows no remorse for the impact her actions have had on the victims in this case,” the Crown said.

Eng’s defence at trial was that the math was wrong, but a jury rejected it.

After the fraud was discovered, Nexus Dock and Marina sued Eng.

At the time, she was living in a $725,000 Kelowna property which she said had a $500,000 mortgage on it. In 2021, it went into foreclosure.

In an effort to recoup some of the losses, the company got a lien on the property. In one court filing, Eng argued against it, saying she needed $85,000 to pay her lawyer for her criminal case.

Little was heard about Eng’s life, only that she moved from Calgary in 2013 and was widowed. She will be 52 years old next month and is a grandmother.

While it wasn’t discussed in court, she appears to have remarried in Las Vegas in 2018 to a man called Gregory Stephen Bogardis.

It’s unclear what Eng did with the $840,000 she stole, and a report submitted to the court said she had no history of substance use or gambling.

However, the court heard that more than $300,000 was transferred into her account at a casino.

In addressing the court, Eng said she was deeply sorry for what she had done, but gave no explanation as to why.

Remarkably, Musgrove said he forgave her.

The Crown sought six years’ jail, while the defence argued for three.

Justice Steven Wilson will decide at a later date.