53 more employees leave TTC because of benefits fraud

Brings to 223 total number of workers involved since investigation began in 2014

53 more employees leave TTC because of benefits fraud
Since this investigation began, the TTC said it has seen a reduction in benefits claims costs of more than $7 million. Sarah Dobson

An additional 53 employees of the Toronto Transit Commission (TTC) have been dismissed, resigned or retired to avoid dismissal as part of the commission’s ongoing benefits fraud investigation.

That brings to 223 the total number of employees thus far involved after the TTC began an investigation in 2014 following a tip to its “Integrity Line” that receipts were being provided to employees by Healthy Fit, a health-care products and service provider where claim reimbursements were being made, but no product or service — meaning orthotics, compression stockings and sleeves — was obtained or receipt amounts were inflated.

Healthy Fit and the employee making improper claims would then share the money paid out by Manulife Financial, according to the TTC.

Adam Smith, the proprietor of Healthy Fit, was found guilty of two counts of fraud over $5,000 and sentenced to two years in a federal penitentiary. Ten TTC employees were charged with fraud, with four pleading guilty to date, receiving a conditional discharge, one-year probation, and community service. The TTC said it has so far collected more than $82,000 in restitution from these employees, and six other former employees remain before the courts.

The TTC is also suing Manulife Financial, Smith and Healthy Fit for up to $5 million, alleging that Manulife 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. The TTC said Manulife breached its duties of care, which contributed to the losses suffered by the TTC.

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.''

Since this investigation began, the TTC said it has seen a reduction in benefits claims costs of more than $7 million.

— With files from CP

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