In 2014, the TTC immediately began an investigation following a tip to its ‘Integrity Line’ that 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, i.e. orthotics, compression stockings and sleeves, was obtained or where receipt amounts were inflated. It was alleged, and now proven, that Healthy Fit and the employee making improper claims would then share the money paid out by Manulife Financial.

Adam Smith, the proprietor of Healthy Fit, was found guilty of two counts of fraud over $5,000 and was sentenced to two years in a federal penitentiary. Ten TTC employees were charged with fraud, with four pleading guilty to date, receiving a conditional discharge, one year probation, and community service. The TTC has so far collected more than $82,000 in restitution from these employees. Six other former employees remain before the courts.

The TTC is suing Manulife Financial, Smith and Healthy Fit for up to $5 million, alleging that Manulife Financial did not 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 maintains that Manulife breached its duties of care, which contributed to the losses suffered by the TTC and, ultimately, the public.

The TTC’s internal investigation continues. 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.

Since this investigation began, the TTC has publicly communicated updates on its extensive investigation. As such, it has seen a reduction in benefits claims costs of more than $7 million. Benefits fraud is a crime and one that can cost an employee their job and, potentially comes with a criminal record.