Manulife Financial Corp. says it has reached a settlement with the Toronto Transit Commission (TTC) related to the Healthy Fit benefits fraud case.
Terms of the agreement were not disclosed.
Following a tip, the TTC began an investigation in 2014 that found that Healthy Fit, a health-care products and service provider, was issuing fake or inflated receipts.
Employees would submit the falsified claims to Manulife, the company’s insurance provider, collect the money, then share the payment with Healthy Fit.
The TTC had sued Manulife alleging the company did not have the appropriate fraud management controls in place, a claim the insurance company denied.
Manulife says it continues to strengthen and invest in its fraud program, which includes proactive efforts and prevention through its trusted provider network.
“Benefits fraud is a crime,” Manulife said in a release. “It has serious consequences, including criminal charges and even jail time, as seen in extreme cases like this. Fraudulent claims also impact the cost of providing benefits, which influences what employers can cover, and can hurt employees who are truly in need.”
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 in 2017.
The TTC said 223 employees were dismissed, or resigned or retired to avoid dismissal when the scandal broke. Ten transit employees were charged with fraud.