Ontario recovers $11M allegedly taken by senior civil servant accused of fraud

TORONTO — A former senior employee with the Ontario government has repaid more than $11 million in COVID-19 benefits the province alleges he took fraudulently, his lawyer said Friday.

The unproven civil claim named Sanjay Madan, who had a senior IT role and helped develop the computer application for applying and approving the benefit for families with children.

In a brief statement, Madan’s lawyer Christopher Du Vernet confirmed his client had made the repayment.

“In fact, the province has recovered in excess of the funds it presently alleges Mr. Madan took from the Families Support Program,” Du Vernet said. 

“However, it is also seeking its legal costs, interest and punitive damages, so the action continues.”

In its untested lawsuit filed last fall, the province alleged Madan, his wife and two adult children who all worked for the Ontario government in information technology defrauded the province of at least $11 million.

The civil claim, which also sought $2 million in punitive damages, accused them and others of illegally issuing and banking cheques under the program that aimed to defray the cost of children learning at home.

“The Madan family exploited their positions of employment with Ontario and unique access to the (program) and payment processing system,” the government alleged in the claim. “The plaintiff was uniquely vulnerable to Sanjay, particularly with respect to the integrity of the…application.”

Late Friday, the Ministry of the Attorney General said funds had “now been seized” pursuant to a judicial order and were being held by the court pending litigation of the province’s claims.

“The government takes these allegations seriously,” ministry spokesman Brian Gray said. “(It) has retained KPMG to conduct a thorough investigation, and that investigation is ongoing.”

Du Vernet said his client “deeply regrets” his actions and was awaiting results of medical opinions on his condition.

According to the lawsuit, Madan and his family opened more than 400 accounts at the Bank of Montreal between April and May. They then deposited around 10,000 cheques made out to fictitious applicants with thousands of non-existent children under the support program.

Most deposits were made over a four-week period starting on May 25, coinciding with a rule change that allowed more than five payments to be made to an applicant. The government alleges Madan either sparked the rule change or knew about it and took advantage.

In other court filings, Madan is said to have told the government that he could explain “all of this” and that he has “helped many families.”

The government had served notice it intended to seize any money the family allegedly obtained fraudulently and obtained a court order to have their bank accounts turned over to the court pending the outcome of the lawsuit.

The government also obtained a court order freezing the family’s assets, which included a list of properties in Toronto. The government said it will be in court next week to extend the freeze.   

Madan was fired in November.

This report by The Canadian Press was first published Jan. 22, 2021.

Colin Perkel, The Canadian Press