{"id":17543,"date":"2019-11-15T09:15:15","date_gmt":"2019-11-15T14:15:15","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/toronto-transit-commission-settles-benefits-fraud-lawsuit-138921"},"modified":"2019-11-15T09:15:15","modified_gmt":"2019-11-15T14:15:15","slug":"toronto-transit-commission-settles-benefits-fraud-lawsuit","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/11\/15\/toronto-transit-commission-settles-benefits-fraud-lawsuit\/","title":{"rendered":"Toronto Transit Commission settles benefits fraud lawsuit"},"content":{"rendered":"
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Staff<\/span> | November 15, 2019<\/p>\n

The Toronto Transit Commission has settled a 2016 lawsuit against its insurer for the alleged failure to detect a benefits fraud scheme involving orthotics store Healthy Fit Inc.<\/p>\n

To date, 10 people \u2014 nine former TTC employees and Healthy Fit owner Adam Smith \u2014 have been convicted in relation to the scheme. More than 250 TTC employees resigned or retired to avoid dismissal, or were dismissed outright, while an additional 14 were disciplined.<\/p>\n

\u201cWhile terms of the settlement are confidential, the TTC 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,\u201d the TTC said in a press release.<\/p>\n

Read: TTC benefits case: Store owner sentenced to two years, Manulife facing lawsuit<\/a><\/strong><\/p>\n

In 2016, the TTC sued its insurer Manulife Financial Corp. for allegedly not having appropriate fraud controls in place to detect unusual trends or patterns, seeking up to $5 million in damages for negligence, negligent misrepresentation and breach of contract for all losses incurred by the TTC.<\/p>\n

The benefits fraud scheme involved Healthy Fit issuing receipts to TTC employees for either inflated amounts or without delivering a product or service. The orthotics store would then split the insurance payments with the customers. The TTC launched an investigation into the store in 2014 after receiving a tip on its integrity line. Toronto Police eventually charged 10 TTC employees for fraud over $5,000. Smith pled guilty in Sept. 2017 to two counts of fraud over $5,000 and was sentenced to two years in jail.<\/p>\n

In July 2017, the Toronto Police Service also said Smith had similarly defrauded the City of Toronto in a scheme involving several city employees who submitted $96,000 worth of claims to Manulife.<\/p>\n

Read: Toronto benefits fraud probe takes a turn as new charges laid over city claims<\/a><\/strong><\/p>\n

According to the agreed statement read at Smith\u2019s sentencing hearing, Manulife paid out approximately $5.6 million in claims from TTC employees related to Healthy Fit between January 2012 and July 2015.<\/p>\n

A 2016 report<\/a> from the city\u2019s auditor general said up to 600 TTC employees were under investigation for their involvement.<\/p>\n

In the year following Healthy Fit\u2019s closure, the TTC saw a reduction in benefits claims cost of almost $5 million. It has also saved almost $7 million per year in benefits paid for claims on orthotics, orthopaedic shoes, compression stockings and leg and arm braces.<\/p>\n

Read: TTC fraud update: More than 220 employees fired or have resigned, retired<\/a><\/strong><\/p>\n

In a press release, Manulife said it\u2019s continuing to strengthen and invest in its benefits fraud detection program. \u201cBenefits fraud is a crime. It has serious consequences, including criminal charges and even jail time, as seen in extreme cases like this,\u201d the insurer said. \u201cFraudulent claims also impact the cost of providing benefits, which influences what employers can cover, and can hurt employees who are truly in need.\u201d<\/p>\n

The TTC said its internal investigation is ongoing. \u201cWhere evidence shows the TTC\u2019s benefits plan was billed inappropriately, demands for repayment are made and employees face discipline, up to and including dismissal.\u201d<\/p>\n

Read: Insurers stepping up fight against benefits fraud with analytics, big data<\/a><\/strong><\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Staff | November 15, 2019 The Toronto Transit Commission has settled a 2016 lawsuit against its insurer for the alleged failure to detect a benefits fraud scheme involving orthotics store Healthy Fit Inc. To date, 10 people \u2014 nine former...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17543"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=17543"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17543\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=17543"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=17543"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=17543"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}