254 TTC employees dismissed in benefit fraud case, lawsuit settled
The TTC said it has settled a 2016 lawsuit they launched against Manulife in 2016.
According to the transit agency, the lawsuit was related to benefits fraud, and to date, 254 TTC employees have been dismissed — or have resigned or retired to avoid dismissal with an additional 14 disciplined. Nine former employees were convicted for their part in the fraud scheme.
Both the TTC and Manulife say the terms of the settlement are confidential. In a statement, the TTC said it “is pleased to see this matter resolved in a way that allows both companies to move forward with a renewed commitment to preventing benefits fraud and penalizing those who commit it.”
The TTC started looking into the matter following a tip to its “Integrity Line” in 2014.
The TTC and Manulife began a joint investigation after receiving whistleblower tips that alleged receipts were being provided to employees by Healthy Fit, a health care products and service provider, where claim reimbursements were being made, but where no product or service was obtained or where receipt amounts were inflated, according to the agency.
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“In 2015, Healthy Fit shut down in the wake of the fraud investigation. Since then, the TTC has saved almost $7 million a year in benefits paid for claims on orthotics, orthopedic shoes, compression stockings, and leg and arm braces,” said the TTC.
Two years later, in 2017, Adam Smith, the proprietor of Healthy Fit, was convicted of two counts of fraud over $5,000 and was sentenced to two years in a federal penitentiary.
In September of 2017, the TTC announced it would be suing Manulife Financial for up to $5 million as part of the benefits fraud scheme.
At the time, it claimed that Manulife Financial didn’t 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 alleged that Manulife breached its duties of care, which contributed to the losses suffered by the TTC and, thus, the public.
The TTC’s internal investigation continues.