Ontario Construction News staff writer
Two Deloitte LLP partners have been hit with heavy fines and professional sanctions by the Chartered Professional Accountants of Ontario (CPA Ontario) for “professional misconduct” in their audits of the collapsed construction giant Bondfield Construction Company Limited (BCCL).
In a decision and order effective Feb. 12, a CPA Ontario discipline committee panel ordered Felice Iorio to pay a $100,000 fine and $345,000 in costs, while Steve Kostich was fined $50,000 and ordered to pay $313,900 in costs.
The sanctions follow a long-running investigation into the audits of Bondfield between 2013 and 2016. Bondfield, once one of Ontario’s most prominent institutional contractors, collapsed into insolvency in 2019, leading to the largest surety claim in Canadian history—a $1-billion facility provided by Zurich Insurance.
According to the CPA Ontario reasons for decision, the partners failed to perform their duties with “due care” and failed to maintain “professional skepticism” in the face of significant fraud indicators.
The tribunal found that when Iorio accepted the Bondfield engagement in 2014, he failed to take sufficient steps to address allegations of suspected fraud and other audit risks that had been raised by the company’s predecessor auditor.
The audit failures centered on a massive false-invoicing scheme that siphoned more than $80 million out of Bondfield and its affiliate, Forman International Ltd., between 2011 and 2017. Subsequent forensic investigations revealed the company had paid tens of millions to entities that provided no actual services or equipment.
The panel concluded that Iorio and Kostich failed to obtain “sufficient and appropriate audit evidence” to reduce audit risk to an acceptably low level. Iorio served as the lead engagement partner for the 2013 and 2014 audits, while Kostich took over the role for the 2015 and 2016 cycles.
Central to the misconduct was the auditors’ handling of payments to subcontractors that forensic investigators later determined were shell companies. The CPA Ontario documents note that the auditors accepted management’s explanations for these payments without adequate verification, despite red flags regarding the legitimacy of the vendors and the nature of the work performed.
The fallout from Bondfield’s collapse has already resulted in criminal convictions. In late 2025, former Bondfield president John Aquino was convicted of fraud in relation to the siphoning scheme. The Supreme Court of Canada also recently ruled that Aquino’s fraudulent intent could be “attributed” to the corporation, allowing creditors to seek recovery of the diverted funds.
The disciplinary actions against Felice Iorio and Steve Kostich by CPA Ontario follow separate enforcement by the national watchdog, the Canadian Public Accountability Board (CPAB), which previously sanctioned partners Trevor Nakka and Jo-Anne Gignac for failures in the 2017 and 2018 audits. In total, the regulatory fallout has seen four individual Deloitte partners penalized for their roles in overlooking the massive fraud.
In its decision, the CPA Ontario panel emphasized that the magnitude of the audit failures and the high public profile of the Bondfield collapse necessitated significant financial penalties to “protect the public and maintain the reputation of the profession.”
Deloitte, which has already settled separate allegations regarding the backdating of audit documents in this case for $1.59 million, stated it has implemented “enhanced quality control” measures following the Bondfield matter.
If either Iorio or Kostich fails to pay the fines and costs within 90 days, their memberships in CPA Ontario will be revoked.
With files from CPA Ontario Disciplinary Records and the Canadian Public Accountability Board. The Globe and Mail originally reported this story.
