Manitoba First Nation sues former chief, alleging 'kickbacks,' diversion of funds and other 'corrupt practices'

Peguis number one carry amelia moore nation is suing former chief john glenn w. H. Hudson o'er allegations he failed to act in the best interest of the band and financially benefitted from breaches of duty — including claims that he enriched himself, his family and supporters.

In a 29-page statement of claim filed Friday with Manitoba’s Court of King’s Bench, the First Nation alleges Hudson “engaged in corrupt practices,” made unauthorized transfers of funds, awarded contracts to companies he benefitted from, treated the First Nation’s assets “as if they were his own” and engaged in “risky financing and real estate transactions” during his 14 years as the chief as well as a shareholder and director of several Peguis corporations.

The allegations have not been proven in court. No statement of defence has been filed.

Hudson served as chief of Peguis, Manitoba’s most populous First Nation, from 2007 to 2015 and again from 2017 to 2023, when he lost to current Chief Stan Bird in an election Hudson continues to contest before the courts.

Hudson said the claims in the lawsuit are frivolous and intended to influence the outcome of the next Peguis election.

In its statement of claim, Peguis is seeking unspecified compensation for Hudson’s alleged breaches of trust and duty and asked the court to trace any money, property or other benefits that were received as a result.

“The Nation suffered substantial financial losses, reputational harm and erosion of governance integrity,” reads the statement of claim.

“The corruption that the defendant engaged in … continues to have lasting negative impacts on the Nation.”

Peguis alleges in its claim Hudson used his band-issued credit card to make “numerous cash gifts” to band members and encouraged members to charge the band for gas purchased at the Mi Ki Nak Gas Station. The gas purchases amounted to $700,000 in the 2021-22 fiscal year, the claim states.

According to the claim, Hudson repeatedly invoiced Peguis for “home furniture, vehicles, personal telecommunications and personal legal fees” for himself, his family and associates.

The band also states in its claim that Hudson received honoraria for attending third-party events without disclosing the income to the band, diverted a $30,000 grant — intended to build a monument for residential school survivors — to himself “in or around 2023,” and diverted at least $250,000 from the Percy E. Moore Hospital “to cover the Nation’s cashflow shortages” on at least three occasions in 2022 or 2023.

According to the claim, Hudson directed, influenced or caused the band to approve the use of $22 million in treaty land entitlement funds in 2013 to invest in property at Assiniboia Downs in Winnipeg without disclosing he was a director of a company that was paid $935,000 “for purportedly arranging financing” for the purchase.

The claim also states Hudson did not act in the band’s best interest when Peguis First Nation’s real estate trust used $10 million of treaty land entitlement funds in 2021 to purchase the Meadows Golf Course in East St. Paul, placed band adviser Andrew Marquess “in total control of the development” and then sold most of the land to Marquess in 2024.

Peguis also alleges in its claim Hudson did not act in the band’s best interest when the Peguis real estate trust purchased land on Wellington Crescent in Winnipeg for $350,000 “for addition to reserve” and then sold it to a third party for profit.

According to the statement of claim, Hudson breached his duty to the band “by unilaterally awarding, or causing the Nation to award, construction contracts to companies in which he had a financial or business interest.” The statement alleges Peguis contracted Ayshkum Engineering Inc., which Hudson co-founded and served as a director, “for at least $20 million” during his tenure as chief.

The statement of claim alleges Hudson received “kickbacks” as part of this and other contracts, through cash “in the guise of ‘consulting fees,’ lavish dinners, gift cards, hockey tickets and other forms of compensation.”

The claim also alleges Hudson did not act in the band’s best interest when Peguis took $95 million worth of loans with private lender Bridging Finance Inc. At a rate of prime plus 11 per cent in 2017 and directed $10 million from those loans in 2018 to a cannabis venture without disclosing his interest in the venture.

Overall, Peguis alleges in its claim that Hudson “fostered an environment in which loyalty was rewarded, and procedures and independent oversight were discouraged and disregarded.

“Individuals who raised concerns were either fired, constructively dismissed or shuffled to different positions.”

The band alleges that Hudson’s conduct “was not isolated or inadvertent but formed part of a sustained pattern of governance failure, misuse of authority, and disregard for fiduciary obligations, resulting in foreseeable and substantial harm to the Nation.”

In a Facebook post on Saturday, Hudson said he will defend himself and his family against what he called “frivolous claims” from current Peguis Chief Stan Bird.

Hudson said via text message on Monday the claims are part “a negative campaign” against him focused on the outcome of the next Peguis First Nation election.

“As First Nations leadership, we need to focus on the positive outcomes for our people rather [than] tearing opportunities down and pursuing defamation of character,” Hudson said via text.

In a Facebook video address on Friday, Bird said Peguis's council did not take the decision to launch a claim against a former band chief lightly.

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