Tip management company controversy followed Kamloops gratuity fraud lawsuit

The BC restaurant giant taking three Kamloops men to court over $500,000 in allegedly stolen tip money is also claiming the company tasked with managing those funds lost millions it held in trust.

Northland Properties filed a lawsuit against the tip management company XTM, claiming the company lost more than $2 million of tip funds pooled for its various restaurant locations.

XTM runs the same software used at a Kamloops Denny’s location, where Northland accused three former employees of fraudulently stealing more than $500,000 in tips, depositing the money into their own accounts.

Whether the two lawsuits are related beyond the tip management software isn’t clear and a Northland Properties spokesperson refused to be interviewed until the case is heard in court.

“What I can confirm is that all impacted employees were fully protected and did not experience any financial loss. The company has absorbed all losses related to this issue,” a company spokesperson said in an emailed statement.

According to the claim against XTM Inc., which also lists its CEO Marilyn Schaffer as a defendant, Northland Restaurant Group is the company’s largest client in the country.

Restaurants across BC used the company’s software to manage tips and last month they lost access to their funds which XTM held in trust accounts. Financial claims from restaurant companies range from a few thousand to more than $1 million.

BC RCMP has since launched an investigation, as did the Bank of Canada which also stepped in last week to order XTM to stop payments with its retail customers.

Neither of Northland’s lawsuits have been heard in court and the claims haven’t been proven.

In the Kamloops Denny’s case, defendant and former employee Rob Weihe did respond in court to deny all accusations of wrongdoing and fraud.

The Northland Properties operates several chains across the country, including Denny’s, Moxies and Sharkclub.