TTC suing Manulife for up to $5M over failure to spot employee fraud

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.

An investigation into the allegations of mass fraud are ongoing, but the TTC says so far 170 employees have been fired or resigned. Ten former employees are facing criminal charges in connection with the probe.

The TTC has filed a statement of claim in the Ontario Superior Court of Justice against Manulife. (Read full document below.)

The claim alleges Manulife, which provided group benefits for the TTC, represented itself as an industry leader in combating fraud and benefits abuse. It also claimed to have systems in place to detect irregularities and weed out employee fraud.

The TTC claims Manulife “breached its duties of care in this regard, and such breaches caused or contributed to the losses suffered by the TTC.”

Manulife has three weeks to respond to the statement of claim.

The TTC and Toronto police began probing allegations of benefits fraud in 2014.

Police allege Toronto orthotics store Healthy Fit provided fraudulent receipts and invoices to Manulife Financial, totalling more than $5 million. The insurance payouts were then allegedly shared with TTC employees.

Health Fit was the same establishment at the centre of a fraud investigation involving City of Toronto employees that resulted in $96,000 in false claims being made.

TTC Statement of Claim vs Manulife by CityNewsToronto on Scribd