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(LEVI LANDRY / iNFOnews.ca)

A Shuswap First Nation is taking three men to court over alleged logging fraud that siphoned millions away from four Secwepemc communities.

Skwlax te Secwepemculecw (Little Shuswap Indian Band) claims in a notice of claim a logging agreement dating back nearly 20 years should have resulted in an even split of the profits between the four communities. Instead, they were "captured" by three men who allegedly constructed scheme that cut the bands out of millions in logging revenue.

Skwlax names Michael and Edward LeBourdais, both of Whispering Pines First Nation as defendants in the lawsuit, claiming they conspired with West Vancouver businessman Kevin James Ainsworth in 2008.

Michael was chief of Whispering Pines at the time and Edward was a band councillor, but he is now serving his second term as chief.

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According to Skwlax, the three men schemed to convince the other First Nations to enter the contract, only to sell the contract to another party. Their own company then became the subcontractor, effectively cutting the bands out of the revenue.

Nearly $14 million "moved through" one of the companies by 2017. Of that, around $1 million went to Whispering Pines directly and $232,222 was divided between the four First Nations as per the agreement.

Just $58,055 was split among each community.

How much was allegedly used for personal gains isn't clear, but Skwlax is seeking unspecified damages from the three men and their company, along with an order that the money be traced and accounted for.

It also names the province as a defendant, claiming it breached its fiduciary duty by failing to "prevent an exploitative bargain."

Last week, all three responded in court to deny any fraudulent business dealings or unjust enrichment.

Michael was "instrumental" in forming the joint agreement between High Bar, Whispering Pines and Shuswap Indian bands, along with Skwlax, according to its notice of claim filed in December.

Believing it unlikely the province would award a logging contract to Whispering Pines alone, he created a company to jointly represent the four First Nations and evenly split revenue from pine beetle-killed timber.

"The province's intended purpose... was to generate significant economic revenue and employment opportunities for the bands. Instead, revenues and opportunities were captured by (the defendants) and siphoned away from any band benefit," the notice of claim reads.

Though they were awarded a license in the Kamloops area in 2009, work didn't start until three years later.

Through two separate companies, an improper sale of the timber license and a subcontracting agreement with Ledcor, around 500,000 cubic metres of timber was harvested over four years, according to Skwlax.

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The province has not responded in court.

Michael and Edward LeBourdais said the operation was expensive, which explained the low revenue, adding that accounting documents were available to the First Nations. They went on to say they were acting as representatives of Whispering Pines, not individuals, during the logging deal. Ainsworth said he funded the First Nations company through his own investments for three years before logging started, without receiving a salary, going on to deny any wrongdoing once logging began.

All three said the matter is beyond the legal limitation period and should be dismissed.

None of the claims have been proven.

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