Once the train was on the track, millions of dollars began flowing into Champagne’s account at the Bank of Nova Scotia. “At that point I convinced myself that I was well worth the money,” he says. “I was saving DND $157 million a year, so I said, ‘Okay, I’m probably taking $10 million a year, that’s GST.’ I convinced myself I knew what was best for everybody. They would call it a God complex, I guess.” Pretty soon, the thirtysomething family man was living, if not quite like a god, then certainly like royalty.
A key problem for any thief is how to handle their loot in a way that will avoid detection. Here again, Champagne proved he wasn’t your typical embezzler. He decided the best way to hide his windfall was not to hide it at all. Over his years at DND, Champagne drove nice cars (he liked Corvettes). He took trips to Vegas and elsewhere on private jets. He moved into a palatial mansion in a gated community outside Ottawa. Built on two acres, with tennis courts, a pool and a private gym, the property was once appraised at over $1.4 million. He began making multi-million-dollar investments in Ottawa technology firms. He bought a vacation home in Florida, backing onto a golf course. In the late 1990s, he took the family on a trip to the Turks and Caicos islands, and fell in love with the place. Champagne claims he spent over $10 million flying tradesmen to Providenciales Island to build his seven-bedroom beachfront mansion. In 2001, he moved his family to the island, enrolled his kids in school, and spent most of the next three years commuting back and forth to his job in Ottawa, spending weekends in the Caribbean.
If anyone asked, he told them he’d made successful investments in the stock market, speculating on high-tech companies. It was the same story for everyone, including his wife and extended family. But few people asked questions.
“Somewhere along the line—and it wasn’t like an epiphany of a moment—I said, ‘I’m not going to pretend I’m hiding in some Bridlewood home and I don’t have any money,’ ” he says. “I didn’t hide my wealth from anyone. I didn’t rub it in anyone’s face at work, but most of them knew that I was well off.” Champagne was hiding all the evidence of his crime in plain view, and he figures that may have actually reduced suspicion.
“Because I was so blatant with it, you get less questions. Even with my wife, [she thought] I made great high-tech investments and I’m an extremely well-paid consultant in National Defence. That part is not that difficult to sell.”
The pressure of the job and the scheme, combined with his ever-inflating lifestyle, took a toll. Aside from the demands of running much of DND’s huge IT operation, there were far-flung investments and properties to maintain. And, of course, every March there was a whole lot of money to funnel into his bank account from desperate bureaucrats. Still, Champagne says he never really worried about getting caught. “I actually thought I was smarter than everybody anyway,” he says. “Nowhere did I say to myself, ‘Okay, I have $25 million, I should call it a day’—because, for one thing, I couldn’t think of an exit strategy from National Defence.”
There were moments, however, when certain people in the department would ask too many questions. They raised concerns about the annual rush of year-end spending, or they insisted on seeing a lot of Champagne’s paperwork. Those people made him uncomfortable, so he took matters into his own hands, using his connections in Ottawa’s high-tech industry. “These were people who didn’t understand the bigger picture, they were too bureaucratic, they were going to cause problems for the year-ends, etc. etc. They just didn’t . . . they didn’t get it,” he says. “So I had a couple of people moved, headhunted out of the Department of National Defence.”
That kind of meddling might provoke an attack of conscience in some, but Champagne never saw himself as a bad guy. “There were certainly nights where, looking in the mirror, you think ‘Jeez . . . what have you got yourself into?’ But to be honest, while you’re in the middle of all this, you feel like you’re saving the world. There’s no time to be saying, ‘Is this necessarily the right or wrong thing to do?’ I knew if I dropped the ball, I could face criminal charges. But in your mind you’re really thinking, ‘That’s not going to happen, because this could be a massive government scandal. Who would want that?’ ” So, the money train kept rolling merrily along. Until the day it came off the rails.
Paul Champagne knew how to beat an audit; he’d dealt with many of them over his time in government. But he could not deal with three at once.
“Around Christmas 2003, I got hit by a perfect storm,” he recalls. “Consulting Audit Canada was in the midst of a regular audit. Our own audit organization within National Defence was also auditing the maintenance contracts. Then Hewlett-Packard started doing an audit of their own maintenance contracts. They brought in KPMG, and I knew I could not control that one. I remember sitting in my den trying to control the flow of these three separate audits, saying, ‘I gotta figure an exit strategy pretty quickly here. This is not going to go well.’ I was called in eventually by my management within National Defence. At that point I knew it was over.”
