The Toronto Transit Commission is suing its benefits provider Manulife
for not catching fraudulent claims in a scheme involving more than 150 TTC employees.
The lawsuit is worth up to $5 million.
breached its duties of care, which contributed to the losses suffered by the TTC and, thus, the public," the TTC said in a press release.
The multi-million dollar scam was exposed in 2015, when the TTC– acting on a tip made to the agency’s Integrity Line – learned about false medical claims being submitted by a company called Healthy Fit.
The tip alleged that receipts were being provided to employees by Healthy Fit, where claim reimbursements were made but where no product or service – orthotics, compression stockings and sleeves – was obtained or where receipt amounts were inflated.
Healthy Fit and the employee making the claims then shared the money paid out by Manulife
, TTC’s insurer at the time.
The police, which conducted a parallel probe into the scam, said that between 2011 and 2015, the owner and an employee of Healthy Fit "counselled and conspired with" multiple TTC employees, who submitted over $5 million in claims to Manulife
In some cases, invoices were filed for no products at all and the insurance payments were split with customers, according to police.
Earlier this week, the proprietor of Healthy Fit pleaded guilty to two counts of fraud over $5,000 and was sentenced to two years in prison.
Ten TTC employees have also been criminally charged for their role in the scam. Nine of them have left the company while one remains employed with it, albeit on medical leave.
One hundred seventy employees have been dismissed or “resigned or retired to avoid dismissal,” the TTC said – and investigators are still interviewing workers.
"Where evidence shows the TTC's benefits plan was billed inappropriately, demands for repayment are made and employees face discipline, up to and including dismissal," the TTC said in its news release.
The TTC said that since revelation of the scam, it had been successful bringing an end to improper benefits claims or outright fraud. In 2016, the TTC saw a reduction in benefits claims costs of almost $5 million over 2015.
The TTC anticipates more employee dismissals as it continues its investigation into this serious matter: the theft of public money.
“Integrity, accountability and transparency will continue to guide TTC management in all that it does,” the agency said in a release.
has three weeks to provide a response to the TTC's statement of claim.
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