TORONTO – The Toronto Transit Commission says it has parted company with more than 200 people who had connections to a multimillion-dollar benefits scam.
The transit provider says 223 employees have been dismissed, resigned or taken early retirement to avoid dismissal after their participation in the scheme.
The TTC says four people have pleaded guilty to charges connected with the scam, while another six have active charges before the courts.
The TTC began an investigation in 2014 following a tip to its “integrity line” that a health-care provider was issuing fraudulent receipts.
The TTC has since found that a health-care products and service provider called Healthy Fit was issuing receipts for inflated amounts of for services that were never provided.
Employees would then submit the falsified claims to Manulife, the company’s insurance provider, collect the money, then share the payment with Healthy Fit.
Last year, the TTC announced it was suing Manulife for negligence for its alleged part in the scheme.
In a statement of claim, filed in the Ontario Superior Court of Justice, the TTC alleges Manulife Financial did not have appropriate fraud management controls in place nor were there systems in place to detect and analyze unusual trends or patterns that might indicate fraud or abuse.
It maintains that Manulife breached its duties of care, which contributed to losses suffered by the TTC.
The TTC says it is seeking up to $5 million in reimbursement and damages.
The allegations in the statement of claim have not been proven in court.
Manulife spokesman Sean Pasternak said the company is denying the allegations.
“We always act with integrity and diligence and believe these allegations are without merit,” Pasternak said in a statement.
“Manulife has robust fraud management practices, which it continues to strengthen and invest in. Benefits fraud is complex, layered and constantly evolving, and we continuously evolve our strategies and work with key stakeholders to meet this risk.”
In 2016, the TTC saw a reduction in benefit claim costs of almost $5 million over 2015, which the transit agency says reflects its continued success in bringing an end to improper benefits claims.
Adam Smith, the proprietor of Healthy Fit, pleaded guilty last year to two counts of fraud over $5,000 and was sentenced to two years in prison.