2 trailers, 1 boat: Docs. reveal ‘very comfortable’ lifestyle of Ont. youth home operator

Three days before his Grade 8 graduation, Liam Smith received devastating news – his mother had died in a car accident.

“To have mom back and be living all the time with my brother … I would do anything to have that,” said Smith, who was just 13 when his mom died.

With his father out of the picture, he attempted to live with his extended family but ran into problems. He said relatives couldn’t or didn’t want to take care of him.

At 15, he entered Ontario’s child welfare system and was eventually placed in a group home run by Connor Homes. The company is owned by a family in eastern Ontario that also operates luxury vacation rentals.

“It felt like you weren’t worth anything when you were in there,” said Smith, who spent two years in its care and is now 22. “They’re making a bunch of money, but we were given $70 a week on groceries per kid.”

An earlier Global and APTN investigation revealed allegations of rundown living conditions that Smith and other kids faced inside some Connor Homes residences, like crumbling homes and limited food or clothing budgets.

It also showed the key players behind the company, Bob Connor and his son Sean, have amassed real estate assets under their own names and through their companies estimated to be in excess of $10 million. Some of these properties are part of a luxury vacation rental business, which includes a private island.

The investigation has now uncovered court documents outlining how one of the principals behind Connor Homes appeared to live “a very comfortable lifestyle” – five international vacations in less than a year, a BMW and a motor boat – while declaring a modest income of $36,000.

Ontario child welfare

Liam Smith, 22, spoke with Global News/APTN about his time in Ontario's child-welfare system.

(Global News)

Former residents and workers say the owners paid more attention to revenue streams than property maintenance or providing adequate resources for its youth.

“You knew that (the owners) had the money but it wasn’t in the home(s),” said a former Connor Homes worker, whom Global News and APTN are not identifying because of fear of reprisal.

“The kids didn’t see that money.”

Smith described living in a residence in need of repairs, little money for food or activities, and punitive rules that exacerbated his mental health issues.  Privacy concerns for the children in care prevent Global News/APTN from identifying the locations of the homes.

He said kids were given a score for completing daily tasks like making their beds: Fail to get enough points and freedoms could be restricted. Often this was caused by having a “bad mental health week,” Smith said.

READ MORE: Inside Ontario group homes where kids were called ‘paychecks’

In one instance, the company prevented him from going on a rare visit with his brother to the zoo because he hadn’t earned enough “points,” Smith said.

But the boredom – no activities or access to WiFi, and few trips outside the home – was the biggest problem, he said.

“While in Connor Homes, I tried to commit suicide three times,” said Smith.

“There was just nothing ever to do. You’re so bored.

“I (didn’t) even want to wait (three years) till I’m out of care. I’d rather just go now, like, screw this. That’s what’s going on in your head.”

The Global News/APTN investigation also uncovered a tangled network of numbered companies the Connor family used to manage its real estate assets and youth homes.

Founded in the 1970s, the company at one time had more than 130 beds across the province in roughly 40 group and foster homes.

It now operates just three group homes with space for up to 20 kids. Connor Homes surrendered its foster-care agency licence on May 5, 2022 after a legal battle with the province.

Global News/APTN obtained divorce documents from 2011-2013 between Sean Connor and his former wife of more than 10 years, which included summaries of his personal and business tax information.

His ex-wife alleged his family earned “significant revenues” from the child welfare business and Sean Connor engaged in “extremely aggressive accounting techniques” and “derives significant undeclared cash payments from it as well.”

In the divorce filings, Connor declared $36,000 in income – half a household income of $72,000 that he income-split with his wife for tax purposes. Yet, the documents show this was inconsistent with an allegedly lavish lifestyle.

The documents also reveal a sophisticated layering of numbered companies that allowed both Bob and Sean Connor to receive payments from the contracts intended to care for kids.

Bob Connor is president and co-owner of 1392644 Ontario Inc., also known as Connor Homes, which provides licensed residential care to kids in the child welfare system.

Ontario group home

Bob Connor (left) and his son Sean (right) are the owners and operators of Connor Homes.

(Facebook/Global News)

A separate company, 511825 Ontario Inc., exists to hold his portfolio of real estate assets, including several residences used as group homes and at least four properties used as luxury vacation rentals or bed and breakfasts near Campbellford, Ont.

His son, Sean, is the president of 1324455 Ontario Inc. With no government licences to operate group homes or a foster care agency himself, Sean Connor had only one client: his father’s company.

Acting as a middle man, 1324455 Ontario Inc. managed some of the foster homes in eastern Ontario for Connor Homes. This subcontracting arrangement was in effect as of 2013, according to the documents, but likely changed as Connor Homes surrendered its foster care licence in 2022.

Corporate financial statements for 1324455 Ontario Inc. show between $516,000 and $770,000 in annual operating expenses from 2007 to 2009 – costs incurred while Sean Connor was acting as a subcontractor for Connor Homes’ foster care agency.

Connor’s ex-wife alleged that in each of those years, around $300,000 of those operating expenses were “inaccurate, created or inflated claims” or “indirect benefits” that he derived from the company.

In “tax summaries” he prepared for his accountant that were also submitted in the divorce proceedings, Sean Connor listed expenses including $20,000 for a boat purchase, over $12,000 in payments for two camping trailers and $67,000 in hotel and entertainment/restaurant costs over three years.

READ MORE: Kids restrained over 2000 times in one year in Ontario’s child-welfare system

His former wife also alleged that from October 2010 to September 2011, Sean Connor took nine vacations to destinations such as Barbados, Costa Rica and Cuba – as well as two trips to France.

The documents allege Connor owned three homes, two cars – a Jeep Wrangler and BMW Z3 – in addition to the boat and two camping trailers.

Forensic accountants who reviewed the documents say that some of the deductions raise significant red flags and that auditors from the Canada Revenue Agency would disallow a number of these expenses.

“There’s no reason to report a personal boat on a personal tax return,” said Matt McGuire, a forensic accountant and internationally recognized expert in anti-money laundering. “Neither should he have given them the trailer numbers or the like.

“These are all not deductible expenses.”

With two companies taking a cut of the public funding, it raises questions as to whether fewer dollars reached kids in care.

A Global News/APTN analysis of 2018 budget documents showed children’s aid societies spent an average of $173 a day for every child they placed in a foster home operated by a company like Connor Homes – funds meant to cover food, clothing, activities and wages.

READ MORE: A closer look at Ontario’s child-welfare system where kids are ‘commodities’

But a contract from Connor Homes from that year shows foster parents received $58 a day to care for each child.

“You contrast (the Connor family) lifestyle against the amount of money that they’re paying people to actually look after these children; it’s relatively a pittance,” McGuire said.

The tax summaries for Sean Connor indicated he claimed $30,000 on advertising expenses from 2007 to 2009. Over the same period, he claimed another $38,000 on restaurants and hotels despite his father being his only client.

Sean Connor declined repeated requests for an interview and did not respond to a detailed list of questions about his business deductions for this story.

He denied his ex-wife’s allegations that he engaged in “aggressive accounting techniques” to enrich himself, according to one of his own sworn affidavits.

In that document, he said his trips were often based on “last minute deals” or his parents paid for the cost, and several vehicles were used for business purposes.

Connor said one trailer was sometimes used in place of “hotels” during business trips, with him working and taking conference calls inside it, his affidavit said. The other was rented out to Connor Homes.

He also defended the hotel and entertainment costs, as well as the $30,000 spent on advertising, as being necessary to promote his business to the government and children’s aid societies, according to the affidavit.

“I absolutely deny these allegations,” Connor said. “I have a chartered accountant prepare my taxes and I presume that she operates under accepted accounting practices.”

He argued in the affidavit that the list of business and personal tax deductions he submitted in the court documents was in some cases “inaccurate” and not all items listed were declared as personal or business expenses when his accountant actually prepared and filed his tax returns.

Connor also said that if a business expense he attempted to claim was deemed incorrect by his accountant, he would pay that expense back to the company.

“The fact is that expenses incurred are legitimate expenses and my accountant determines which are appropriate business versus personal expenses,” he said in the affidavit.

However, during the divorce proceedings, Sean Connor and his ex-wife ultimately agreed to determine child and spousal support based on an estimated salary of $200,000, not the $36,000 he declared on his taxes after income-splitting with his wife.

Sean Connor denied his ex-wife’s allegation that he “derives significant undeclared cash payments” from his business.

“I am extremely insulted by this statement in (my ex-wife’s) Affidavit, which she makes without any substantive evidence whatsoever.”

The allegations contained in the documents follow previous reporting by Global News and APTN, which highlighted the crumbling conditions at Connor Homes and revelations the same family owns a fleet of vacation property rentals.

Interviews with more than two dozen former workers, images from inside the homes, inspections reports and court filings revealed homes in need of repairs and allegations the company was cutting costs to the detriment of the kids’ needs.

“(Connor Homes tried) saving money wherever they could, even if it was cutting corners,” said a former worker whom Global News has agreed not to identify for fear of reprisal.

“Two of the three homes that I worked at were terrible in terms of living conditions,” the former worker said. “I always thought that there was a good amount of money that was available to these kids, but it just never seemed to really get there.”

Smith said the lack of money for activities often led to kids being bored, which in turn led to problems. He said he was physically restrained by staff more than “50 times.”

Restraints are supposed to be a last resort – used only when children are at imminent risk of injuring themselves or others, according to the province.

“I can’t count how many times just standing in the office ended up, like, in a restraint, just because we were bored,” he said.

“It makes you wonder why (the Connor family) even have group homes in the first place,” Smith said. “What’s the motive behind it? Is it him making money, or does he care and want to create a home for kids?”

Connor Homes

Images are shown from inside youth residences owned by Connor Homes in eastern Ontario.

(Supplied)

When reached by reporters at one of his vacation rental properties in eastern Ontario, Bob Connor refused to come to the door. His son Sean also declined interview requests and would not answer specific questions related to allegations about care inside the company’s homes, citing “confidentiality” concerns.

In a subsequent statement to Global News, Sean Connor said the children in the company’s care are “supported with a treatment plan, weekly check-ins, and wrap-around support from a multidisciplinary team including a social worker, psychotherapist, psychologist, and therapist.”

“Our assessment process was created by Connor Homes and received approval from the Ministry,” he said, adding that their “funding was reviewed and audited annually.”

“Connor Homes’ operations ultimately strive to exceed the legislated minimum regulatory standards,” he said. “For over 40 years, Connor Homes’ Foster Care licence was consistently renewed by the Ministry without any conditions.”

READ MORE: Inspection reports reveal disturbing conditions inside Ontario group homes

But Smith and workers at the home said the Ministry of Children, Community and Social Services (MCCSS) needs to be taking a harder look at what goes on in private group homes.

Minister Merilee Fullerton’s office declined repeated requests for an interview.

A spokesperson for the MCCSS said in a statement the ministry is “enhancing oversight and accountability” in the child welfare system.

The province said it has changed its guidelines to increase the number of youth and staff interviews conducted for foster-care licensing inspections.

Child welfare experts and kids who’ve lived in private group homes, however, say the Ontario government should be looking to change “the entire system” and take profits out of caring for kids.

“It takes a village to raise a child, but I don’t think there was a village there for us,” Smith said.

— with additional files from Elizabeth Sargeant and Rajpreet Sahota

If you would like to share your experience working or living in the child-welfare system, please reach out to us at investigate@globalnews.ca

 

© 2022 Global News, a division of Corus Entertainment Inc.

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