Another former resident, he said, received compensation for an assault by an employee, even though records showed that the man no longer worked at the school on the date of the alleged attack.

''It was like going to buy the lottery ticket when you already know the numbers,'' Mr. McKinnon said of the payment system, on which he calculates that 14,500 claims have been made. ''Fourteen thousand five hundred claims that went undetected over 40 years?'' he said. ''It doesn't make any sense.''

In recent years two former Shelburne employees committed suicide on learning that they had been accused of sexual abuse. After newspapers reported the suicide of one, William Belliveau, about 20 other former residents filed claims against him. Later, Royal Canadian Mounted Police investigators cleared Mr. Belliveau of the original charge.

In defense of the program, Anne Derrick, a lawyer for 450 former residents, said that a compassionate program had been ''turned on its head'' by critics.

''I do believe there was a significant amount of abusive activity,'' she said, referring to violence at the reform schools. ''But you are talking, in some cases, about what happened 50 years ago. There are no records. There are no witnesses.''

She acknowledged that ''there is undoubtedly a certain amount of fraud,'' but questioned why the accused were angry, noting that ''the money is not coming out of their pockets.''

To some the controversy revolves around applying late 1990's standards to 1960's behavior.

''A lot of the physical abuse was just the kind of smacking around that the person got at home,'' said Terry Turple, a former Shelburne resident who is now a house painter in Halifax and who declined offers to file a suit. ''People getting whacked around was more or less an everyday thing there. We more or less accepted it. We were bad kids in reform school.''