Ontario claims $75M stolen in ‘kickback schemes’ run by alleged ringleader of COVID-19 fraud

The Ontario government is alleging that as much as $75 million in taxpayers’ money was stolen as part of elaborate “kickback schemes” in the awarding of computer contracts.

In a dramatic expansion of the province’s civil case against the ex-bureaucrat accused in the alleged $11-million theft of COVID-19 relief funds, the Crown claims at least nine others are involved in a separate “conspiracy” dating back more than a decade .

“The plaintiff (the Ontario government) paid out approximately $40 million pursuant to FFSCs (fee-for-service contracts) resulting from the kickback schemes. The secret commissions totaled approximately $35 million,” government lawyers say in Ontario Superior Court civil filings.

“As a result of the conspiracy, the plaintiff suffered damages in the amount of $75 million,” the submission says.

That is over and above the $11 million allegedly taken from the Support for Families program, which gave Ontario parents $200 per child under age 12, and $250 per child and youth under 21 with special needs, to offset online educational expenses early in the pandemic.

In court filings on that matter, the government alleges Sanjay Madan, spouse Shalini Madan, their adult sons Chinmaya and Ujjawal, and associate Vidhan Singh funneled cash to thousands of Bank of Montreal, Royal Bank of Canada, TD, Tangerine, and India’s ICICI bank accounts in 2020.

Sanjay and Shalini were then fired from their government information technology jobs and are currently on trial for criminal charges. Sanjay is charged with two counts of fraud and two counts of breach of trust.

He and Shalini are charged with possession of stolen property and laundering the proceeds of crime. Shalini, Chinmaya and Ujjawal have all denied any involvement in the alleged $11-million theft. Chinmaya and Ujjawal have not been charged criminally.

Singh was charged with money laundering, fraud, and possession of stolen property, and Manish Gambhir was charged with possession of stolen property and possession of an identity document related — or purported to relate — to another person. In the criminal matter, Singh and Gambhir have denied any wrongdoing. Gambhir is not named in the civil action.

As the separate criminal trial proceeds, the civil case has widened against Sanjay and Singh — but not Shalini or their sons.

In new filings, the government alleges some or all of Singh as well as Manik Walia, Shikha Walia, Sandeep Singal, Koteswara Chittaluri, Shalinder Chopra, Igor Vaisman, Jitendra Mehta, Babita Mehta and Rajiv Kataray “conspired” with Sanjay “in the payment or improper kickbacks/secret commissions.”

Also named are 22 computer consultancy firms and numbered companies run by or linked to the 11 of them.

All 11 deny any wrongdoing, and are in the process of filing statements of defence. None of the Crown’s allegations has been proven in court.

“The kickback scheme defendants, or some of them, conspired and agreed together … to fraudulently cause … the plaintiff (the Ontario government) to enter into contracts with certain VORs (vendors of record) that … resulted in the payment of improper kickbacks/secret commissions … to Sanjay Madan and/or to companies he directly or indirectly controlled,” the court documents say.

On Wednesday, Sanjay’s lawyer, Christopher Du Vernet, said his client denies any such conspiracy ever existed and questioned the wisdom of the government’s expanded claim because there was an open bidding process.

“If all these contracts were as bad as the Ontario government now says, why didn’t the many staff who reviewed, approved, and audited them at the time say a word?” said Du Vernet, noting the “math makes no sense” because only $40 million was paid out for work that was completed.

“The Ontario government wants almost twice what it says it paid out,” the lawyer said.

“Not only that, but it also wants back every penny that it paid to hundreds of consultants who labored for it for 10 whole years without complaint. Either the government can’t count, or this litigation is an overreaching, ill-conceived cash grab,” he said.

“The Crown got the work it paid for; it paid a price it considered to be fair; two government committees approved each and every contract beforehand; and government auditors concluded they represented good value for money after they were done.”

Du Vernet said the expanded claim suggests the government is admitting “its own officials were asleep at the switch for an entire decade.”

The province’s lawyer, Christopher Wayland, has maintained Sanjay was “ringleader” of a sophisticated scheme that operated for years.

“It’s not just the fraud with respect to the Support for Families program, but also kickbacks with respect to the engagement of fee-for-services consultants,” Wayland told civil court last year.

While denying any wrongdoing in the alleged procurement conspiracy, Sanjay, the former Ministry of Education information technology leader on the Support for Families program, has spoken candidly about that pandemic measure.

In January 2021 civil court testimony — which may not be used against him in the criminal action if it violates his Charter-protected rights against self-incrimination — he said he “relaxed” computer security to enable more payments to be made to the same bank accounts.

Under oath, Sanjay said Support for Families was “a free-flowing program” with “a lot of loopholes.”

“I thought there may be an opportunity to take the funds out … it looked like easy money for me.”

Some $28 million in Madan family assets in Canada and India remain frozen under a government-obtained court injunction.

That includes about $12.4 million in Indian bank accounts, an $8-million Waterloo apartment complex, a seven-bedroom house in North York previously valued at $2.57 million, and six Toronto condominiums worth around $3 million.

When government-retained auditors from KPMG searched Sanjay’s computer at Queen’s Park, they discovered a Panamanian driver’s license and a permanent resident’s card in his name as well as a company registered to him there.

Panama is a tax haven that does not have an extradition treaty with Canada.

Court records also say Sanjay purchased two villas in Hyderabad, India, in 2013 and two pleasure boats in 2017 and 2018.

Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie


Conversations are opinions of our readers and are subject to the Code of Conduct. The Star does not endorse these opinions.


Leave a Comment