Ghosts in the Villa: How an identity theft scheme funnelled $1.2 million out of Hamilton’s Villa Italia retirement home

The banquet was vintage Pat Mostacci.

Held in the opulence of the Michelangelo Event and Conference Centre in Hamilton, the spring 2017 event was attended by the city's glitterati, leaders of the local Italian community and even the mayor.

There, with his typical cherubic smile, Mostacci held court at the celebration of his hard-won battle over leukemia. While the spotlight was on Mostacci, well known for his two chairmanships of the annual Festitalia event and his long tenure as executive director of Villa Italia retirement home, he made sure this celebration of life" was also about those who had stood with him during his gruelling cancer treatments.

It was a glitzy thank you as much as it was a victory lap.

The festivities were in keeping with Mostacci's public life, built on a reputation of being a fun-loving and caring champion of charitable causes and an influencer in the city's Italian community.

What no one in attendance knew was that away from the cameras and microphones, a series of events were unfolding that would unravel Mostacci's reputation and leave his life in tatters. He is now accused of being the architect of a nearly decade-long fraud and identity theft scheme that bled at least $1.2 million from Villa Italia, including during the COVID-19 pandemic.

A Spectator investigation that reviewed Villa Italia employee data, a third-party audit of the home's payroll along with bank records and court documents, found there were at least three ghost employees" on the home's payroll.

Paycheques for these fake employees were deposited into a secret bank account in Mostacci's name twice a month - an account that was a clearing house for thousands of dollars every week.

Where most of the cash went remains a mystery, for dead men tell no tales.

In April, shortly after the retirement home's board of directors discovered the ghosts in the villa, Mostacci suddenly died at the age of 53. His cause of death has not been disclosed and his passing has left the home, his family and Hamilton's Italian community with more questions than answers.

Who really was Pasquale (Pat) Mostacci?

Beware the devil hiding in plain sight

When Brenda Thomas's nursing career careened to an end, she was unable to tell anyone how she felt about it.

The daughter of Jamaican immigrants, Thomas had made a life in Brampton caring for those who couldn't care for themselves. Nursing provided her with a living, allowed her to raise a family and buy a home.

But in 2008, a car crash became the terminal point of her professional career.

She survived the collision, but the brain trauma caused a form of aphasia, a condition where a person cannot speak effectively. She knew what she wanted to say, but couldn't find the right words.

Even now, it happens sometimes. I have to really think about the words I want to use," she said from the front porch of her Brampton home. You know, I might want to say rain' but it comes out as water falling from the sky.' But that was really it for me. After that happened, I couldn't work."

While Thomas pushed through the Sisyphean task of recovery and learning to talk again, she had no idea her nursing career continued unabated just 70 kilometres away in Hamilton.

At least it did on paper.

On Feb. 28, 2008, while Thomas was healing in Brampton, Villa Italia employee records show she started working at the home. Although these records use her name, address and social insurance number, Thomas had never heard of Villa Italia until contacted by The Spectator.

Built on Hamilton Mountain in 2003 and billed as a place where seniors can enjoy peace of mind living with a Mediterranean flair," Villa Italia is the signature community project of The Sons of Italy Charitable Corporation, a non-profit arm of the century-old Hamilton service club The Order Sons and Daughters of Italy.

One of the city's largest retirement homes, with space for up to 130 residents in 123 suites, Villa Italia depends on funds from donors and fees from residents to run its operations.

According to Revenue Canada, the Upper Paradise Road home spends around $4.79 million annually, with about half of it going to salaries for its 29 full-time, and 73 part-time staff. This is against $4.9 million in revenues, leaving the home with scant resources to hire more staff, construct new buildings or enhance its services.

Mostacci, the son of an Italian immigrant who made a living as a professional wrestler, was hired as the home's executive director in 2004. It was a good job, paying more than $130,000 a year.

I'm open. I can be exciting and fun," he told The Spectator in a 2010 interview. Because we are dealing with vulnerable people, we need them to feel comfortable. It's a big change in their lives."

Leaning into the Sons of Italy's mission of promoting Italian culture, Mostacci would ensure Villa Italia lived up to its name, treating residents to food, music and events from the old country.

And he was fun. In 2014, he donned a Hamilton Tiger-Cats jersey for a shower in ice water as part of the ALS ice bucket awareness campaign. Mostacci would sing with Italian musical groups who performed at Villa Italia and would arrive at holiday parties dressed in a suit patterned after ugly Christmas sweaters.

Mostacci's influence extended beyond the retirement home. He joined the board of directors of Festitalia, Hamilton's 47-year-old annual Italian festival, serving as its board chair in 2018 and 2019. He donated both time and money to local charities and was a board member for RYGIEL Supports for Community Living, which helps people with developmental disabilities.

My roots are deep in Hamilton and my commitment to the Italian and broader community is my focus. With the passion and determination of my fellow board members, preserving the culture is our driving motivation," Mostacci wrote on Facebook after becoming chair of the board in 2018, touting his family's Italian roots and his childhood spent at cultural festivals in Gage Park where he once won a spaghetti-eating contest.

As festival chair, Mostacci was everywhere, glad-handing, giving speeches and posing for photos. He was also part of a Hamilton consortium" that travelled to Parliament Hill in 2019 for the proclamation of the national Italian Heritage Month.

His love of Italian culture even reached city hall. Mayor Fred Eisenberger often attended cultural events wearing a traditional Italian mayor's sash made for him by Mostacci's mother.

He made an immeasurable contribution to the Italian-Canadian community in Hamilton," said the Festitalia in memoriam message on the organization's Instagram page after Mostacci's death on April 2.

Mostacci projected his image on his personal Facebook page which he filled with posts about Italian community events and expressions of his Catholic faith, urging his followers to pray for the weary and the heartbroken and to be wary of doers of evil deeds.

We are living in a time when Satan doesn't even hide anymore and the world still can't see him," Mostacci posted on Nov. 28, 2021, referring to the Biblical verse of 1 Peter 5:8 which warns that the devil prowls around like a roaring lion looking for someone to devour."

Mostacci's stalwart battle against cancer, which became fodder for a Hamilton Health Sciences promotional video, won him more community admiration, culminating his 2017 victory celebration.

Despite his fun-loving persona, life at Villa Italia was not always cheery.

Between 2014 and 2019, Ontario's Retirement Homes Regulatory authority found violations of provincial rules on 10 occasions, with many of those violations centred on administrative failures to develop care and emergency plans or publicly post inspection reports.

On two occasions, the regulatory body found the home failed to protect residents from abuse.

Like all retirement homes, the cash-strapped Villa Italia grappled with the COVID-19 pandemic, but escaped 2020 and 2021 comparatively well with 20 total infections of residents in two outbreaks. The home suffered one COVID death.

Nevertheless, on New Year's Eve 2020, Hamilton's public health department found a laundry list of COVID-19 violations at Villa Italia, including inadequate PPE training for staff, poor hand hygiene protocols and improper use of disinfectants.

The Sons of Italy board of directors had other concerns, as well. Villa Italia's vacancy rate was rising, reaching nearly 25 per cent in 2021, well above the 10 per cent norm in Ontario. Fewer residents meant increased financial stress for the home.

As the year drew to a close, the board had a direct task for Mostacci.

Fix it.

The poltergeist in the payroll

While the board was focused on the financial consequences of its declining vacancy rate, they were unaware of the money steadily draining out of their accounts every two weeks for employees who had never set foot in Villa Italia.

So when Mostacci was fired on Jan. 4, 2022, they had no idea who Brenda Thomas was. Nor were they aware her phantom career at the villa ended some 30 minutes after they showed Mostacci the door.

Around 12:30 p.m. the day Mostacci was fired, the administrator account PMOSTACCI@SOIHCC" remotely signed in to the home's payroll system and began to make dozens of changes over several hours to the employee accounts of Thomas and a Grimsby nurse named Ena Cillis.

Logs of that day's activity in the payroll system, obtained by The Spectator, show PMOSTACCI@SOIHCC changed the records of Thomas and Cillis to say they had quit. The date of their exit was backdated 24 hours to Jan. 3, 2022.

Cillis had no idea she quit a job at Villa Italia she never had.

I don't know who that is," said Cillis, an 84-year-old retired palliative care nurse, when asked about Mostacci. They really said I worked there?"

The Villa Italia employee records show Cillis' start date as Nov. 14, 2007 and, like Thomas, earned more than $570,000 from 2015 to 2022. Although Cillis did work in Hamilton, she was already retired by 2007, she says. Moreover, Cillis and Thomas say they do not know each other nor the third ghost, a woman listed as living in Ancaster, who The Spectator has been unable to locate.

The board began to negotiate a settlement with Mostacci in January, but word of his firing had already spread through Hamilton's Italian community. Mostacci resigned from the Festitalia board on Jan. 5.

Sons of Italy board chair Rob Skaljin received harassing phone calls. The villa's sign was vandalized.

The board was still trying to chart a new course of action when Mostacci's interim replacement came to them with a curiosity: Two employees that no one seemed to know had not picked up their Jan. 7 paystubs.

If the alterations to the payroll were an attempt to conceal the fake employee records, it came too late to prevent the paycheques for Thomas and Cillis from being processed and deposited.

The ghosts in the villa had been discovered.

The phantom paper trail

When it came to the paystubs, all roads at Villa Italia led to Pat Mostacci's office.

For at least seven years, the routine, according to Sons of Italy board chair Skaljin's affidavit and a March KPMG investigation into the home's records, did not vary. Based on testimony from the villa's now-former business manager Debra Pollak, both documents say a sealed envelope containing the paystubs would be delivered unopened to Mostacci.

Behind a closed door, Mostacci would open the envelope, remove the paystubs and then emerge to give the paystubs to a receptionist who would distribute them to employees.

Paystubs, which are automatically generated by payroll software, do not typically require additional review from a senior manager. There would be only one reason for Mostacci to have sole access to them.

To conceal any apparent ghost employees, one would need to obtain the paystubs for such employees prior to their distribution," says the KPMG report.

It is unusual for a single manager to have complete control over payroll. The Sons of Italy, citing ongoing litigation, would not answer questions about what kind of oversight was in place for Villa Italia payroll, nor what changes have been implemented since then.

In an email to The Spectator, Pollak said she had nothing to do with the Villa Italia payroll.

I had no access or authority over the payroll system and was not involved in any way," wrote Pollak, who was fired from the home in mid-June for reasons neither she nor the board have disclosed.

It was not until after Mostacci was fired that the ghost paystubs were found because the interim executive director just gave the unopened envelope to the receptionist for distribution.

Digital doppelgangers and vanishing money

Neither Ena Cillis nor Brenda Thomas know how their personal details were obtained by Villa Italia. They say they never provided any of that information to anyone at the home, including Mostacci.

A spokesperson for Ontario's College of Nurses said there have not been any data breaches of their records in the last 10 years, but experts say there are many ways for criminals to obtain someone's personal information.

Every time we purchase something online, or engage in the online economy and social media, we are all emitting a digital exhaust that has all kinds of information about us," said University of Toronto faculty of information professor Andrew Clement.

Social media user preferences and activity are tracked by platform algorithms - data which is sold by legal information brokers - and hackers attack personal computers to access online banking information. And there have been several high-profile data breaches of companies that retain terabytes of personal information, such as the extensive 2017 hack of the American credit bureau Equifax. That breach impacted at least 19,000 Canadians.

Identity thefts linked to scams happen every year. Scammers are able to acquire personal information, including SINs, through a variety of means, such as phishing scams, data leaks and external breaches. Information from these breaches can be collected and combined to allow someone to impersonate someone online or over the phone," said a Canada Revenue Agency spokesperson in an emailed statement.

According to the Canadian Anti-Fraud Centre, a federal repository of information on frauds and scams, some 106,945 Canadians were the victims of fraud in 2021, resulting in a collective loss of $381 million.

Identity theft has been on the rise in Canada for years. According to Statistics Canada, the rate of identity theft climbed from just under three cases per 100,000 citizens in 2011 to 19.2 in 2020.

Unless meaningful action is taken to better protect the personal information of Canadians, Clement said that rate will continue to rise.

Despite the rising tide of identity theft-related crime in Canada, Jeff Horncastle of the anti-fraud centre said he had never before heard of stolen identities being used to forge fake employee records.

The shadow bank account

No one at Villa Italia knew the home was paying ghost employees for at least seven years. There were four routine audits of the company's payroll system in that span, but they found nothing out of the ordinary. Those audits never had cause to examine the ghost employee information.

But a closer inspection of the specific details of the ghost records reveals the anatomy of the fraud. Despite the ghost employees living in three different municipalities - Brampton, Grimsby and Ancaster - their paycheques were deposited into the same TD bank account housed in branch 191 on Upper James Street in Hamilton, a few kilometres walking distance from Mostacci's home.

That account is in the name of Pat Mostacci. According to court records, it was one of three accounts he controlled, the other two being RBC accounts, one of which he shared with his wife Gloria Mostacci.

A review of the TD bank account's records obtained by The Spectator found that money was going out of the account as fast as it was coming in. Each week, thousands of dollars were transferred to one of eight credit cards. Thousands of dollars were also moved through email bank transfers and ATM withdrawals.

From 2015 to 2022, more than $650,000 were transferred to the credit cards, and nearly $450,000 was withdrawn in cash from the TD branch and ATM machines.

However, the bank records only indicate the type of credit card, but no specific details about the transactions, including purchases or withdrawals. The records also do not show where the transferred money was going.

The transfers were almost always over $1,000 in round numbers, such as $1,500 or $3,000. There are also a handful of smaller transactions, paying bills for a Roger's cellphone and local utilities. On two occasions, the records show someone went into the branch to make deposits of coins of more than $720 each.

The records show that over time, the ghosts were earning increasingly larger sums of money. The biweekly paycheques for the Cillis and Thomas ghosts started at around $2,300 in 2015 and grew to $4,000 by 2022. As a result, those two ghosts were earning around $73,000 annually in 2015, but by 2019, that shot up to over $105,000.

Villa Italia payroll information shows that in addition to regular pay increases, the ghosts were being paid for overtime, working statutory holidays, retroactive pay and holiday pay. In 2015, for instance, Cillis was paid more than $13,000 in overtime.

The records also show the ghosts were not paying any taxes, with all provincial and federal deductions listed as blocked," in what KPMG said was an apparent attempt to hide the ghosts from the eyes of the Canada Revenue Agency.

To conceal any apparent ghost employees one would need to suppress the source deductions that would have otherwise been remitted to the CRA," the KPMG report says.

In an emailed statement to The Spectator, a CRA spokesperson said they cannot comment on any current or past investigation and would not say if the Crown agency was aware of the Villa Italia payroll scheme.

Both Cillis and Thomas say CRA is telling them they owe large amounts of unpaid taxes, but it is unclear if this is connected to the Villa Italia fraud.

Between 2015 and 2022, Villa Italia issued paycheques in the names of Cillis and Thomas worth more than $570,000 each. The third ghost, listed as having started work at the home in 2010, received paycheques from 2015 to 2016, was paid around $54,000.

In total, the scheme brought in at least $1.2 million. However, records obtained by The Spectator, including a March 2022 KPMG investigation of the home's payroll records, only date back to 2015. It is not clear if the scheme was in operation as far back as 2007 and 2008 when Cillis and Thomas were listed as having started work for Villa Italia. If so, the total loss to the home could be more than $2 million.

It is not clear how this money was used - there are no obvious public displays of ostentatious wealth or an exotic lifestyle.

Ontario property records show Mostacci and his wife own one property - their two-storey home on Hazelton Avenue in Hamilton. The home has a large, octagonal swimming pool and shed in the backyard. Financial records show Mostacci got a loan in 2020 for 2017 Nissan Murano, an SUV worth more than $35,000.

The activity on the secret bank account does appear to directly coincide with activities Mostacci posted about, including a tropical family vacation in October 2021. However, $3,700 was withdrawn at an ATM on Nov. 2 and 3, 2021 just before Mostacci went to see the Montreal Canadiens play the New York Islanders at the Bell Centre in Montreal on Nov. 4.

Secrets taken to the grave

Mr. Mostacci is shocked and vehemently denies the very serious allegations that are being implied in your email below," wrote Mostacci's lawyer, Kellie Gray of the Oakville firm O'Connor MacLeod Hanna in a March 11 email to Villa Italia's lawyers, a few weeks before Mostacci's death.

The home, having discovered the ghosts, wanted answers from its former leader. And it wanted its money.

It launched court action, acquiring an order to freeze many of Mostacci's assets, including his upscale family home in Hamilton, to prevent them from being sold.

Gray asked Villa Italia for more time for Mostacci - who was then in Ottawa for what she said was medical appointments - to respond. If legal action proceeded without that extension, we will be seeking our costs on the highest scale available, as well as moral, aggravated and punitive damages in addition to other legal claims and relief that may be available to him for, among other things, wrongful dismissal and defamation of character."

The home sent Gray a copy of the KPMG report, but the back and forth between the lawyers appear to end. Within a week, Mostacci, a diabetic, fell seriously ill.

On April 2, 2022, he died without having provided an explanation for what happened at Villa Italia.

His wife, Gloria Mostacci, says while she is aware of allegations levelled at her late husband, she has no knowledge what he may have done at Villa Italia.

Pat Mostacci handled the family finances with Gloria having very little involvement. Gloria was completely unaware of any alleged improper activity on the part of her late husband," says an emailed statement from her lawyer to The Spectator. To this point, Villa Italia has not provided any evidence indicating participation in or complicity by Gloria in any alleged wrongful conduct by her late husband. Despite that, Villa Italia has obtained court orders over all assets including assets owned by Gloria, which orders are causing Gloria and her children significant financial hardship. Villa Italia has not yet agreed to release Gloria's assets so that she can deal with them unencumbered."

The Sons of Italy civil case against Mostacci's estate is ongoing, said board chair Rob Skaljin in an emailed statement, and for that reason he would not discuss specifics.

My affidavit evidence speaks for itself, and would like to see further evidence to come out in that forum," Skaljin's statement says. On behalf of the SOI Charitable Corporation, let me just say that we are all gravely saddened by this. We continue to investigate the full extent of the damages and pursue the recovery of the monies taken from the organization."

The Sons of Italy civil case against Mostacci's estate is ongoing.

Hamilton police told The Spectator they have not been made aware of any issues at Villa Italia and Mostacci.

Those who once sung Mostacci's praises in the community, including Mayor Eisenberger and Festitalia, declined to comment when asked about the ghosts at the villa. The festival spokesperson would not comment when asked if it was reviewing its own accounts from the years Mostacci was a board member.

However, Debra Pollak - the home's former business manager, who worked beside Mostacci for most of his time as Villa Italia's executive director - came to his defence.

The Pat Mostacci I knew, was a wonderful, kind, compassionate man. He dedicated almost two decades of his life to Villa Italia, and he thought of the residents and staff as part of his extended family," she wrote in an email. He was a proud supporter of our community, and he touched the lives of many in a very positive way."

In his final months, Mostacci gave no indication of the turmoil that had engulfed his life. His last public Facebook post was on Jan. 17, two weeks after he had been fired, changing his profile picture to Maui, the smiling, tattooed South Pacific demigod in the Disney animated film Moana."

On that page, filled with Catholic prayers and calls to social action, Mostacci quoted the Christian writer John Pavlovitz about what happens after death.

My carefully crafted image, the one I worked so hard to shape for others here, will be left to them to complete anyway," the August 2021 post says. The sterling reputation I once struggled so greatly to maintain will be of little concern for me anymore."

Grant LaFleche is an investigative reporter with The Spectator. Reach him via email: glafleche@torstar.ca