The former director of the MaRS Collaboration Centre is facing fraud charges and allegations from Toronto police he used his position to defraud MaRS and others of nearly $1 million.

Police announced in a news release Thursday morning that Allen Gelberg, 61, of Thornhill, had been arrested on Wednesday and charged with eight counts of fraud over $5,000, defrauding the public of over $5,000, possession of the proceeds of crime and laundering the proceeds of crime.

Police identified Gelberg (pictured above in a photo released by the Toronto Police Service) as the registered owner of the sole proprietorship known as Rediscover Niagara, and alleged that "he used his position with MaRS Discovery District to defraud his employer, as well as several service providers, including companies which facilitated catering, equipment rentals and service staff, of over $970,000."

MaRS Discovery District released a statement later confirming the allegations that "a former employee with responsibility for procurement and delivery of event services was involved in apparent fraudulent activities, using his position at MaRS to divert funds related to event activities at MaRS to the employee's personal use."

The statement said improprieties were brought to light by "external sources" and that "MaRS took immediate and appropriate action to suspend the employee and initiate an investigation."

That included engaging a forensic investigation firm "to assist with identifying and quantifying the misappropriated funds," the statement says. "A forensic report has been provided to the police, and MaRS is working with its insurance firm to recover some of the diverted funds. The individual in question is no longer an employee of MaRS."

According to Gelberg's LinkedIn page, he held the director position with MaRS from August 2005 to December 2014.

"As an organization that receives public and philanthropic funding, MaRS is committed to its fiduciary responsibilities," the statement says. "We continually strive to strengthen our internal control processes. Consistent with best practice, MaRS has implemented an ethics reporting system 'whistleblower line' to avoid another such incident in the future."

It's the second recent fraud case involving Ontario public funds to come to light. Last month, the Ontario Provincial Police charged a former director with the Ministry of Government and Consumer Services, Shabbir Evershine, with fraud, breach of trust and conspiracy, for allegedly hiring a "phantom" IT consultant, believed to be himself, and charging the government for work not done.

Heard: MaRS former director arrested on fraud charges

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