The TTC is suing Manulife Financial for up to $5 million as part of its ongoing investigation into an alleged benefits fraud scheme.
According to the transit commission, 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 alleges that Manulife breached its duties of care, which contributed to the losses suffered by the TTC and, thus, the public.
To date, the TTC says that 170 employees have been dismissed, or have resigned or retired to avoid dismissal, and 10 former employees are facing criminal charges for their part in the insurance fraud which dates back to 2014.
That’s when the TTC began an investigation following a tip to its ‘Integrity Line’ that receipts that were being provided to employees by Healthy Fit, a health care products and service provider, were fraudulent. Claim reimbursements were being made, but no product or service (orthotics, compression stockings and sleeves) was obtained, and some cases saw receipt amounts inflated.
The TTC said that Healthy Fit and the employee making improper claims would then share the money paid out by Manulife Financial.
This week, Adam Smith, the proprietor of Healthy Fit, pleaded guilty to two counts of fraud over $5,000 and was sentenced to two years in prison. But the TTC said that its investigators are continuing to interview employees as part of its own investigation.
“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,” states the TTC in a press release.
Last year, the TTC saw a reduction in benefits claims costs of almost $5 million over 2015, reflecting the TTC’s continued success in bringing an end to improper benefits claims or fraud.
The TTC said that its statement of claim requests a response from Manulife within three weeks.