In June 2001, John William Hand admitted to defrauding the Atlantic Canada Opportunities Agency (ACOA) of more than $75,000, by submitting false invoices to the federal agency.

Ten months later - while he was still on probation for those crimes - police now believe he turned his attention to another level of government.

In documents filed with provincial court, police allege Hand began defrauding the House of Assembly in April 2002. That alleged fraud continued for four years.

The Royal Newfoundland Constabulary (RNC) recently charged Hand, 68, with fraud over $5,000, frauds on the government and breach of probation.

The charges are in conjunction with the House of Assembly spending scandal.

See POLICE, page A2

Hand is linked to three companies Auditor General John Noseworthy reported as receiving $2.7 million in questionable payments from the legislature.

According to the RNC, Hand is owner/operator of Zodiac Agencies, and is associated with Cedar Scents International and JAS Enterprises.

In a report issued three years ago, Noseworthy questioned the legitimacy of nearly $2.7 million in payments made to those three companies for "low-value novelty items such as lapel pins, fridge magnets and key chains."

RNC investigators arrested Hand last week. He was released to appear in court on Dec. 16.

Hand is the sixth person to face charges in relation to the spending scandal. Four politicians were charged with corruption. Three of them pleaded guilty.

Progressive Conservative Ed Byrne was sentenced to two years less a day for fraud and bribery. Byrne served just more than four months before being released this summer.

In October, Liberal Wally Andersen was sentenced to 15 months for forgery. He is currently incarcerated, but could be out by Christmas.

New Democrat Randy Collins - who pleaded guilty to fraud and bribery - will be sentenced next month.

And a provincial court judge is now pondering the fate of former Liberal cabinet minister Jim Walsh, who pleaded not guilty. Walsh's lengthy trial wrapped up this week.

Meanwhile, the key bureaucrat at the centre of the scandal - the legislature's former financial director, Bill Murray - faces corruption charges.

Murray is accused of taking kickbacks to run through false constituency allowance claims.

Police claim Hand bribed a public official as part of the alleged scheme.

Hand's 2001 fraud conviction relates to his time as president of another company - Intercraft Inc., which eventually became known as Trepassey Manufacturing Co. Ltd.

In the early 1990s, ACOA established a community development fund in Trepassey to aid fishermen displaced by the cod moratorium.

According to court documents, Hand's company got ACOA cash targeted at helping those fishermen and plant workers.

A November 1994 story published in The Express weekly newspaper indicated that 25 new jobs would be created by Hand's Trepassey plant. The plant was set up to produce pen and pencil holders, plaques, and cedar boxes and gift items Hand had previously sold for an American company.

"Their boxes sold so well that they couldn't keep up with the orders," Hand is quoted as saying in that 1994 story. "We had trouble getting orders filled during peak seasons, so we decided we could do the work here and obtained manufacturing rights to do so."

But around the same time, Hand was submitting false invoices to ACOA for equipment he did not receive.

Hand later admitted to instead redirecting some of the equipment elsewhere. He also invoiced ACOA for five assembly tables he never bought.

In 2000, Hand was charged with two counts of fraud over $1,000, following an investigation by the RCMP commercial crime section.

According to an agreed statement of facts filed at provincial court in June 2001, Hand admitted to defrauding ACOA of more than $75,000.

He later received a conditional sentence of 7-1/2 months, along with two years probation.

But less than a year after admitting to those crimes, police now allege, Hand began defrauding the provincial government.

rantle@thetelegram.com