Region of Peel files $4M lawsuit alleging a former employee defrauded program meant to prevent homelessness & poverty

The Region of Peel is alleging breach of trust, civil fraud, conspiracy and unjust enrichment against a former employee and several clients in a $4 million lawsuit filed with the Ontario Superior Court earlier this week.

The lawsuit alleges a scheme was hatched to defraud a Region of Peel social assistance program which funded a homelessness prevention program used to assist Peel residents at risk of losing their housing.  

In a statement of claim, filed on February 4, the Region alleges Hamza Dualeh, a former employee and the main defendant named in the case alongside 19 other individuals involved, “intentionally engaged in the dishonest Fraudulent Scheme” while employed by the Region and that Dualeh allegedly “acted, without authorization or authority, in remitting the Overpayments, contrary to the duties owed to Peel Region, and abused the public’s trust reposed in him as an office holder without reasonable excuse or justification.”

The lawsuit claims that between April 2023 and December 2024, Dualeh, who was previously employed as a caseworker in the Region’s Human Services Department, initiated approximately 1,300 payments totalling more than $4.07 million from Peel’s Homelessness Prevention Fund (HPF) to the recipients who are also named as defendants in the case. The total amounts received by the individual recipients ranged from $10,500 to $474,155 and were deposited either by direct deposit e-transfer into their individual bank accounts on file or issued by cheque.

Dualeh was fired in January following an internal audit that revealed the misuse of municipal funds over the course of nearly two years. The $474,155 to a single recipient was issued over 150 payments from the HPF between May 2023 and December 2024, to Mohamud Shire, one of the 19 individuals identified in the lawsuit as an alleged recipient of fraudulent payments under Dualeh’s alleged scheme.  

The Region is also claiming it “has suffered clear and quantifiable damages” as a result of the alleged fraud. The statement adds the accused were “enriched by the stolen funds” and “continue to be unjustly enriched at Peel Region’s expense,” despite having no legal reason to receive the stolen funds, which the claim says were used to the defendants' own benefit. It notes that the complete details of the stolen funds and their whereabouts are unknown at this time. 

The allegations detailed in the claim have not been tested in court. The Pointer has not obtained any statement of defence and it is unclear if one has been filed yet. 

Along with $4 million in damages, the Region is also seeking $500,000 in aggravated and punitive awards, as well as special damages, including investigative costs. The details of what those charges will amount to will be provided prior to the case going to trial.

The Region is alleging the fraudulent scheme deliberately took money illegitimately from Peel’s HPF “for private unlawful gain, and on the ostensible basis of fictional rationales for disbursement” and that Dualeh knowingly “cloaked” the overpayments — an amount of money paid to an employee that they are not entitled to — in “fake rationales” provided to the Region that were related to the purposes of the Homelessness Prevention Fund. The lawsuit also alleges the recipients involved in the case participated and cooperated in the scheme “with knowledge of the unlawful means employed to route the Overpayments to their own use.” The lawsuit alleges the recipients’ conduct “was unlawful in furthering the Fraudulent Scheme” by knowingly requesting and receiving the money under false claims, converting it to their own use and taking steps to cover up the ruse.  
 

The Region of Peel has filed a lawsuit against a former employee alleging misuse of municipal funds intended to prevent homelessness, totalling over $4 million.

(The Pointer files) 

As a municipal corporation, the Region is responsible for several public services, including making decisions on emergency applications and ongoing eligibility for the Ontario Works (OW) social assistance benefits, as required under the Ontario Works Act, which provide financial assistance and employment supports to people in financial need — funds which are administered by the province. The Homelessness Prevention Fund is separate from OW but the Region uses its fund alongside the OW program to identify potential recipients for the HPF. 

Individual files are assigned to caseworkers who typically handle 180 to 230 cases at a given time, according to the statement of claim, and are responsible for ensuring recipients receive what they are entitled to under the monthly OW benefit, as well as other types of single-issue benefits. The Region also funds and maintains the HPF, which is available to OW recipients based on need and is intended to support individuals in times of desperate circumstances to preserve their housing, but recipients must provide evidence of the need.

The Region’s Ontario Works and Homelessness Prevention programs are meant to help Peel’s most vulnerable to provide financial assistance for food and shelter that individuals in these situations could not otherwise afford, in addition to drop-in support and other designated services for people living in precarious housing. 

According to the Region’s claim, caseworkers are required to seek review and approval of any HPF payments over $5,000 with their supervisor. But all payments issued during the 18-month period that was investigated were kept below that threshold, with each individual payment issued by Dualeh ranging from $300 to $4,500, with an average amount of roughly $3,600 per payment, allowing the former employee to remain under the radar. 

Dualeh was hired by the Region as a caseworker trainee on a full-time, permanent basis in July 2019. As a caseworker, Dualeh’s responsibilities included assessing employment, financial and social needs (such as health, housing and childcare) for recipients, issuing benefits under the Ontario Works Act, providing emergency support response services, resolving recipient disputes and complaints and providing referrals to community resources for long-term support. 

“Dualeh engaged in a planned and deliberate scheme to issue entitlement payments from the HPF, citing knowingly false reasons for the payments,” the lawsuit claims. “These fraudulent payments were made without a legitimate need,” it alleged, and “Dualeh would then indicate a fictitious reason for issuing the payment, such as ‘rental arrears.’”

Dualeh’s alleged wrongdoing was recently brought to light following two anonymous voicemails alleging that the regional employee was issuing overpayments to people on his caseload. The calls also indicated these payments were being split with the recipients of the funds. 

After several allegations were made in December, an internal investigation was launched on January 3 and by January 9, Dualeh was fired with cause.

Email: [email protected] 

Twitter: @mcpaigepeacock 

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