Anti-rackets squad probes alleged theft of COVID-19 relief funds
Seven Ontario Provincial Police detectives are now investigating the alleged $11-million theft of provincial COVID-19 relief funds.
“We’re conducting a criminal investigation into allegations of a major fraud,” Det. Staff Sgt. Sean Chatland, head of the probe, said Wednesday.
“The allegations are serious,” said Chatland, who investigates economic and identity crime and corruption for the OPP anti-rackets branch. “We’re still fairly early on. We’ve been investigating for a couple of months,” he said, stressing it “is going to take some time.”
As revealed by the Star, a Toronto couple and their two adult sons, who all worked as Ontario government computer specialists, are alleged to have been involved in the theft of more than $11 million in pandemic aid.
Documents filed with the Ontario Superior Court say “some or all of” Sanjay Madan, Shalini Madan, their sons Chinmaya Madan and Ujjawal Madan, and associate Vidhan Singh, allegedly perpetrated “a massive fraud” to siphon cash to hundreds of bank accounts.
The allegations in the government’s statement of claim have not been proven in court. In that statement, the province alleges “damages for fraud, theft, conversion and conspiracy in an amount estimated to be at least $11 million.”
Through his lawyer, Christopher Du Verney, Sanjay Madan has not had any comment on the allegations.
Shalini Madan and Chinmaya Madan have not returned calls or emails and the Star has been unable to reach Singh, a Richmond Hill resident.
But in a brief interview on Tuesday, Ujjawal Madan said he was aware of the allegations involving the family.
“I cannot comment at this time. It’s not a good time,” said the Georgia Institute of Technology master’s student.
Premier Doug Ford said the alleged fraud “is totally unacceptable.”
“I wish I could go full steam on this one, but I can’t. It’s in front of the courts. My hands are tied on this one. Ask me after the decision has been made and I’ll open up on a scale like you’ve never seen,” Ford said.
But the premier insisted “there’s enough oversight” of the billions of dollars in COVID-19 cash flowing from the treasury.
Ontario auditor general Bonnie Lysyk, who tabled a report on the government’s coronavirus response Wednesday, evaded a question on why her audit failed to mention the fraud allegations. “We are tabling three reports after this one and one of them is called COVID expenditures,” said Lysyk, who did not indicate if she was even aware of the alleged theft.
NDP MPP Sara Singh (Brampton Centre) said “it’s appalling that funds meant to help Ontarians during the pandemic were allegedly stolen before they could reach needy families.” “The Ontario government must undertake every effort to recover any missing money and to ensure proper oversight,” said Singh.
Three weeks ago, the government filed a civil action to obtain a court injunction to freeze Madan family assets. It alleges money was stolen from the emergency $300-million relief program between April and June. The funds were mostly supposed to go to families of children and youth with special needs. Parents were given the $200 and $250 payments to help defray the costs of at-home learning in the pandemic.
Sanjay Madan was a director in the Ministry of Education’s iAccess Solutions Branch and the information technology leader of the government’s online Support for Families program (SFFP). He was fired with cause from his $176,608-a-year job this month.
The government’s factum alleges he knew “how it worked, its strengths, its vulnerabilities and any deficiencies” in the program’s ability to verify the identities of people seeking help. After the program was launched in April, “over 400 new accounts at the Bank of Montreal were opened in the names of the Madan respondents,” the government’s court action alleges.
“Over $2.5 million in Support for Families payments were then deposited into those BMO accounts. The BMO payments alone would be equivalent of payments to a family of more than 10,000 children,” the court documents say.
“It is likely that similar payments were made into accounts at other banks. At TD there are over 30,000 payments totalling approximately $8 million with the same or similar characteristics and payment patterns … ” it continues.
The unusual banking activity raised suspicions with the authorities.
Shalini Madan, who earned $132,513 last year, is the manager of E-Ministries Support at the Ministry of Government and Consumer Services. She was suspended with pay on Aug. 11.
Chinmaya Madan, their elder son, worked as a technical product manager at the Ministry of Government and Consumer Services for three years. He resigned after being suspended with pay on Aug. 11 and his LinkedIn profile indicates he is now at Microsoft in Seattle.
Ujjawal Madan, their younger son, was a contract employee with the Ministry of Education’s iAccess Solutions Branch. His father allegedly hired him last year “despite a clear direction not to from his superior,” who was concerned about a potential conflict of interest.
Also named in the province’s action is Vidhan Singh, the sole signing officer for a company called Wang & Associates Professional Corp. that lists his Richmond Hill home as its headquarters.
A firm called Intellisources Inc., of which Sanjay Madan is the sole director, is alleged to have received 20 Support for Families payments to its Bank of Montreal account.
Investigators are also examining Newgen Solutions, of which Shalini Madan is an officer, and 10583570 Canada Ltd., a corporation that lists the Madans’ Toronto home as its head office.
According to the court documents, “Sanjay Madan directed a change to a payment rule within the computer application” to override the government’s limit on five electronic fund transfers into a single bank account.
He told an underling “this change was ‘highly confidential and only known by directors and above’ that the change was requested by” Education Minister Stephen Lecce’s office “to address complaints from Children’s Aid Societies.”
However, Lecce’s office “made no such request,” the court documents say.
There were allegedly 10,283 deposits made into the family’s Bank of Montreal accounts, including $693,650 for Sanjay, $690,950 for Shalini, $615,200 for Chinmaya, $596,700 for Ujjawal and $4,950 for Intellisources Inc.
Asked in July about the payments, Sanjay Madan did not claim there was “some sort of error or technical glitch on the government’s part, but rather … offered various incredible explanations or justifications for the payments and … suggested that the funds be returned,” the documents say.
In a six-page affidavit on Nov. 6, Sanjay Madan said he cannot mount a legal defence because his assets are frozen, including $1,031,407, net proceeds of the sale of a North York house he sold on Sept. 29.