I spent four days in the Surrey Provincial Court watching a case unfold that raises troubling questions about financial oversight in municipal governments. Alicia Raquel Morales-Yépez, a former Surrey City Hall finance clerk, faces criminal charges for allegedly stealing approximately $2.5 million over six years while processing cash payments from residents.
The accusations against Morales-Yépez reveal a stunning breach of public trust. According to Crown prosecutor Kevin Marks, between 2016 and 2022, the finance clerk allegedly orchestrated a sophisticated scheme where she would accept cash payments for property taxes and other city services, provide legitimate receipts to residents, but then delete the transactions from the system and pocket the money.
“The evidence suggests a calculated pattern of deception,” Marks told the court on Tuesday. “Ms. Morales-Yépez allegedly exploited her position of trust and her knowledge of the financial systems to systematically divert public funds for personal gain.”
Court documents I reviewed show that the investigation began in January 2022 when a routine internal audit flagged unusual patterns in transaction records. City financial controller Wei Li testified that the audit revealed suspicious transaction deletions occurring consistently during Morales-Yépez’s shifts.
“We discovered that certain transaction numbers were missing from the sequence,” Li explained during cross-examination. “When we cross-referenced the deleted transactions with staff schedules, a concerning pattern emerged.”
Surrey RCMP’s Economic Crime Unit conducted a lengthy investigation that included forensic accounting analysis of city records, surveillance footage from cashier stations, and financial records from Morales-Yépez’s personal accounts. Detective Sarah Grewal testified that investigators traced large cash deposits to Morales-Yépez’s accounts that corresponded with days she processed high volumes of deleted transactions.
What makes this case particularly troubling is how long the alleged scheme continued undetected. Defense attorney Martin Chen questioned the city’s financial controls during cross-examination of city officials.
“How could millions of dollars disappear without anyone noticing for six years?” Chen asked Surrey’s finance director, Peter Lemieux. “Doesn’t the city reconcile its accounts daily?”
Lemieux acknowledged that the city has since overhauled its financial oversight procedures. “We’ve implemented additional verification protocols, reduced cash handling, and increased transaction auditing frequency,” he testified. “The alleged fraud exposed vulnerabilities in our systems that have now been addressed.”
The case has sparked concerns about financial controls in other municipalities. I spoke with Michael Ross, a forensic accountant with the Canadian Association of Municipal Administrators, who explained that cash handling remains a vulnerability for many local governments.
“Many municipalities still accept significant cash payments for taxes and services,” Ross told me outside the courthouse. “Without robust verification systems and regular independent audits, similar schemes can go undetected for years. The public should be asking tough questions about financial safeguards in their local governments.”
For Surrey residents, the case represents more than just financial loss. Several taxpayers I interviewed expressed feelings of betrayal that their tax dollars were allegedly stolen by someone entrusted to protect public funds.
“I always paid my property taxes in cash because I liked getting that receipt in person,” said Marion Cheng, a Surrey homeowner for 32 years. “To think someone might have pocketed that money instead of it going to city services is infuriating.”
The case also raises questions about employee screening and oversight. Court heard that Morales-Yépez had worked for the city for over eight years and had no prior criminal record. Colleagues described her as professional and knowledgeable about financial systems.
According to the prosecution, Morales-Yépez allegedly used the embezzled funds to finance a lifestyle beyond her approximately $65,000 annual salary, including luxury vehicles and frequent international travel. Financial records entered as evidence showed cash deposits to various accounts totaling over $200,000 in some years.
The Canadian Association of Certified Fraud Examiners estimates that organizations typically lose 5% of revenue to fraud each year. Municipal governments are particularly vulnerable due to their handling of large cash transactions and sometimes outdated financial controls.
The trial continues next week with more testimony from financial investigators and city officials. If convicted, Morales-Yépez faces up to 14 years imprisonment on charges of fraud over $5,000, breach of trust, and falsifying documents.
For Surrey’s 580,000 residents, this case serves as a sobering reminder of the importance of transparency and accountability in local government. City council has promised a full review of financial procedures and will publish the findings later this year.
As this case moves through the courts, municipalities across Canada would be wise to examine their own financial safeguards. The alleged Surrey fraud demonstrates that even trusted employees require proper oversight, especially when handling public money.
