Economy

TTC suing Manulife over its role in multi-million dollar benefits scam

TTC suing Manulife over its role in multi-million dollar benefits scam”

The transit service announced Thursday it was proceeding with a claim in Ontario Superior Court of Justice originally filed past year.

The TTC is suing Manulife Financial for up to $5 million for failing to spot and stop a large-scale scheme that saw employees allegedly bilk the transit agency with phony benefits claims.

"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.

An investigation into the allegations of mass fraud are ongoing, but the TTC says so far 170 employees have been fired or resigned.

Police allege 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.

The transit service says its annual benefit costs for 2016 were down nearly $5 million from the previous year.

Beverly Romeo-Beehler earlier this year called on the city to toughen fraud-protection mechanisms and said that, since Manulife is no longer administering the benefits plans, and is not obliged to co-operate with her probes, she had abandoned plans for an audit focused on dental claims.

Adam Smith, the proprietor of Healthy Fit, pleaded guilty this week to two counts of fraud over $5,000 and was sentenced to two years in prison.

"Manulife employed incompetent managers, employees and contractors in connection with administration and operation of the systems and procedures so that such systems and procedures were inadequate in all of the circumstances for the goal of preventing and detecting fraud", the claim alleges.

"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 statement of claim alleges the TTC has suffered losses due to "negligence and breach of contract" by Manulife.

TTC investigators continue to interview employees.



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