The TTC says it is now suing its former benefits provider Manulife for up to $5 million, alleging the company failed to detect a large fraud scheme that has resulted in one criminal conviction and the dismissal of 170 workers.
Ten current and former TTC employees, along with the owner of Healthy Fit -- an orthotics business with locations in the Wilson Heights area of Toronto and in Mississauga -- have been charged criminally in the scheme.
The Healthy Fit owner and some TTC employees allegedly agreed to submit benefits claims for orthotic devices that they were never actually provided.
The items claimed included compression stockings, sleeves and orthotics, as well as therapy services, the TTC says.
The orthotics business and the employees would split the insurance payments received for the phantom devices and claims for services that were never actually rendered, police allege.
An anonymous tipster blew the whistle on the scheme in 2014, the TTC says.
This week, the TTC said Healthy Fit’s owner, Adam Smith, pleaded guilty to two counts of fraud over $5,000 and was sentenced to two years in prison.
“In failing to prevent, or to detect in a timely way the fraudulent claim scheme, and in failing to prevent or minimize the losses to TTC which arose out of such scheme, Manulife breached the duties of care in tort and contract which it owed to TTC,” a statement of claim filed in Ontario Superior Court reads.
The statement of claim requires a response from Manulife in the next three weeks.
The TTC says it is also suing Adam Smith, seeking as much as $5 million.
One hundred and seventy TTC workers have been fired, forced to take retirement or ordered to resign in to avoid dismissal in relation to the scheme.
A 2016 report from the Toronto Auditor General suggested as many as 600 TTC workers may have been involved in the scheme.
