the in­side story of a $6-mil­lion in­surance fraud ring at the ttc

For years, hun­dreds of TTC driv­ers scammed the em­ployee health care plan and pock­eted mil­lions. The true story of the fraud, the in­ves­ti­ga­tion, and the lives left in ru­ins

Toronto Life - - Front Page - by michael lista il­lus­tra­tions by michael by­ers

Work­ing for the ttC is a sturdy job, with good pay. Street­car, sub­way and bus driv­ers start at $26 an hour, get bumped to $29 af­ter a year, and by the end of year two make $34, which works out to about $70,000 a year. Many driv­ers, like a guy I’ll call Al­fonso (he asked me to dis­guise his real name for rea­sons that will be­come clear), are drawn to the work be­cause of the salary and the se­cu­rity. Al­fonso was born in the Caribbean in the early 1980s and moved to Scar­bor­ough when he was 12. By the time he was 26, he had a wife and a small condo, and they’d soon wel­come a baby girl. He gave up a job as a sup­ply chain man­age­ment spe­cial­ist in an of­fice block in Bramp­ton to be a bus driver for the TTC. Sunny and af­fa­ble, he loved driv­ing and talk­ing to peo­ple, and fig­ured the job suited him much bet­ter.

But like any job, there were draw­backs. New hires got the worst shifts, usu­ally nights, which threw their sleep pat­terns and fam­ily lives into dis­ar­ray. The TTC, the say­ing went, held its em­ploy­ees hostage for the first 10 years. Cam­eras mon­i­tored nearly every­thing they did, and Al­fonso was care­ful to obey the rules. If he found a $5 bill on the floor of his bus, he’d hold it up to the cam­era and drop it into the fare box in a kabuki of pro­pri­ety. The pres­sure to be on sched­ule was im­mense, and not just from the su­per­vi­sors, who hec­tored driv­ers for run­ning late, but also from pas­sen­gers, whose moods pal­pa­bly soured if a driver ran even two min­utes late. Many times a day, dis­grun­tled riders would swear at Al­fonso, give him the fin­ger or try to pro­voke him. Al­fonso never took the bait: he was rec­og­nized at least twice by his su­per­vi­sor when riders wrote in com­mend­ing him for his work.

What made the grief and grind more bear­able was a gen­er­ous ben­e­fits pack­age. Whereas most pri­vate sec­tor in­surance is worth around $2,000 per year, the TTC plan, which was ad­min­is­tered by Man­ulife, was worth nearly $10,000. Em­ploy­ees would pay up front and sub­mit their claims to Man­ulife, which would re­im­burse them, and then the TTC would re­im­burse Man­ulife and pay an ad­min­is­tra­tion fee. In other words, Toronto tax­pay­ers were ul­ti­mately fund­ing the plan. And it cov­ered a wide range of med­i­cal and ther­a­peu­tic ser­vices that OHIP didn’t: pre­scrip­tion drugs, mas­sages, semi-pri­vate hospi­tal rooms, laser eye surgery, al­co­hol and drug treat­ment, $300 to help em­ploy­ees quit smok­ing, $1,000 a year for hear­ing aids and their bat­ter­ies. It also pro­vided cov­er­age for com­pres­sion sleeves— which are pre­scribed for every­thing from deep vein throm­bo­sis to vari­cose veins—plus or­thotics and or­tho­pe­dic shoes. As long as a qual­i­fied doc­tor, sur­geon, chi­ro­prac­tor, chi­ropodist or po­di­a­trist wrote a pre­scrip­tion, ben­e­fi­cia­ries were en­ti­tled to a new set of com­pres­sion sleeves, or­thotics and or­tho­pe­dic shoes ev­ery year un­til re­tire­ment.

The plan was so ro­bust, so gen­er­ous, that many TTC em­ploy­ees grew to view it as an op­por­tu­nity to wring more money out of their em­ployer. Among those peo­ple, the name Adam Smith trav­elled like a speakeasy pass­word. Smith op­er­ated an or­thotics clinic called Healthy Fit, which sold or­tho­pe­dic de­vices, in­clud­ing knee, an­kle, wrist and el­bow braces; com­pres­sion arm sleeves and stock­ings; or­tho­pe­dic shoes; and or­thotics. But what made Smith’s op­er­a­tion dif­fer­ent was that when TTC em­ploy­ees bought stuff from him, they made money, too.

One day at work, Al­fonso no­ticed the shoes of a fel­low driver—black leather or­tho­pe­dic shoes that paired hand­somely with their navy blue uni­forms. Al­fonso asked where he’d bought them. “Go to Healthy Fit,” the col­league said. “Go see Adam. His deal is the best.”

A

dam Smith, who shares his name with the fa­ther of cap­i­tal­ism, is hand­some and tall, with a full head of auburn hair and a trim beard. He is play­ful, funny, self-dep­re­cat­ing—he’s a fan of Se­in­feld—and a de­voted fa­ther to his two chil­dren. Smith was mar­ried to an oc­cu­pa­tional ther­a­pist, and the cou­ple held a half-mil­lion-dol­lar mort­gage on their two-storey home in Mis­sis­sauga. The Smiths had owned and op­er­ated Healthy Fit since Septem­ber 2010. For a time, they op­er­ated a clinic in Mis­sis­sauga, but their flag­ship lo­ca­tion was at 333 Wil­son Av­enue, the type of con­crete med­i­cal arts build­ing that man­ages to be both bru­tal and gar­ish, with win­dows tinted rose gold and a mar­ble lobby crowned with a fil­i­gree chan­de­lier. The build­ing is down the street from the Toronto Tran­sit Com­mis­sion’s enor­mous Wil­son Yard, the hub that ser­vices the YongeUniver­sity line’s sub­way cars. Over time, TTC work­ers flocked there by the hun­dreds, and by 2011 Smith was re­port­ing his an­nual in­come as $192,285.

In 2014, Al­fonso de­cided to pay Healthy Fit a visit. He didn’t have any foot prob­lems, but he was us­ing his feet to do his job, and it said right there in his ben­e­fits brochure that or­tho­pe­dic shoes were cov­ered. He called the clinic, but be­fore the re­cep­tion­ist would sched­ule an ap­point­ment, Al­fonso had to say who had re­ferred him.

On the day of his ap­point­ment, Al­fonso took the el­e­va­tor up to Healthy Fit. Taped to the door, a piece of pa­per read, “Please Make Sure You Pay For Park­ing. Thank You Through the door, a young ad­min­is­tra­tive as­sis­tant sat be­neath a Healthy Fit sign. A man­nequin’s leg mod­el­ling a com­pres­sion sock sat on the counter, and a rack of or­tho­pe­dic shoes re­volved slowly next to it. Some pa­tients had brought their kids, who were play­ing in the wait­ing room. Every­thing looked so le­git­i­mate.

When Al­fonso’s name was called, he was ush­ered into an of­fice, where Smith launched into his pitch with­out even ask­ing Al­fonso what his symp­toms were. He tried to sell Al­fonso on or­thotics, then com­pres­sion sleeves, or­tho­pe­dic socks, a wrist­band and a knee brace. All Al­fonso re­ally wanted was the shoes. “My process works the same as ev­ery­body else’s,” Al­fonso re­calls Smith say­ing. “The only dif­fer­ence with me is that in­stead of giv­ing you one or two pairs of shoes, I’ll give you cash.”

“Cash is never re­ally a good thing,” Al­fonso thought, an alarm ring­ing in his head. But he’d been to a num­ber of ven­dors who sold prod­ucts cov­ered by his ben­e­fits, and each of­fered some in­cen­tive to un­der­cut com­peti­tors. He’d seen a door-todoor doc­tor who threw in Nikes and Tim­ber­lands with an or­thotics pur­chase, then sub­mit­ted claims on Al­fonso’s be­half.

With­out ask­ing about symp­toms, Smith be­gan to sell Al­fonso on or­thotics, com­pres­sion sleeves, wrist­bands and knee braces

No one ever called Al­fonso on it, and he fig­ured there was no real vic­tim. Plus, hun­dreds of other TTC em­ploy­ees were Smith’s clients. If Man­ulife was ap­prov­ing all the claims, he fig­ured, how could it be il­le­gal?

Al­fonso agreed to buy two sets of or­thotics and or­tho­pe­dic shoes, one for him­self, the other for his wife, who was also cov­ered un­der his plan. The chi­ropodist fit him right there on­site, ask­ing a few quick ques­tions and per­form­ing a cur­sory gait anal­y­sis. Al­fonso got the prod­ucts and paid Smith $1,500, which Smith said would cover the cost of all the items—though Al­fonso says he had no idea what the true value of those items re­ally was. He signed the forms and trusted Smith to fill out the rest. Man­ulife soon reimbursed Al­fonso for the $1,500, and a few days later, Smith e-trans­ferred Al­fonso $500 more.

S

mith’S SCheme was as risky as it was sim­ple. He was sell­ing equip­ment that his cus­tomers didn’t need, wouldn’t re­ceive or paid too much for, and then he’d split the prof­its with them, usu­ally 60 per cent for the TTC em­ployee, the rest for him. The scam re­quired the com­plic­ity of a vast net­work of stake­hold­ers—cor­rupt med­i­cal pro­fes­sion­als and as many as 725 tran­sit em­ploy­ees like Al­fonso. But Smith had a sys­tem to min­i­mize the chances of get­ting caught. Since cus­tomers had to be re­ferred, coun­try-club style, any­one walk­ing through the door was os­ten­si­bly aware that they were in it to­gether.

Smith had con­sid­ered the other an­gles, too. To make the pa­per trail ap­pear le­git­i­mate, he cre­ated fake re­ceipts, which he at­tached to the claim. If the pa­tient re­quired a pre­scrip­tion, Smith would send them to a num­ber of pre-ap­proved doc­tors and chi­ropodists. If cus­tomers couldn’t af­ford to pay up front— which was of­ten, es­pe­cially for high-vol­ume or­ders—Smith would hook them up with a fi­nanc­ing com­pany that could lend the money quickly.

That com­pany was called S&S Ex­ec­u­tive Ser­vices, and it was run by his fa­ther, David Smith—the S’s most likely stood for Smith and Smith. David was also in­volved in pro­vin­cial pol­i­tics as the chief fi­nan­cial of­fi­cer for the 2011 re-elec­tion cam­paign of Charles Sousa, now On­tario’s fi­nance min­is­ter. S&S’s main busi­ness was pro­vid­ing fi­nan­cial and mar­ket­ing sup­port to film and tele­vi­sion pro­duc­ers. But on the side, David loaned money to TTC em­ploy­ees to spend at his son’s clinic and would col­lect in­ter­est on it. He’d make his son’s clients sign prom­is­sory notes, so if they failed to re­pay the loan, S&S could start debt re­cov­ery pro­ceed­ings against them, and even gar­nish their wages.

Smith was far from a pi­o­neer in his craft. Health care fraud is epi­demic in Canada. Ac­cord­ing to the Cana­dian Health Care Anti-Fraud As­so­ci­a­tion, a watch­dog or­ga­ni­za­tion, for ev­ery $10

spent on heal­ing a pa­tient, one dol­lar is lost to cor­rup­tion. Cana­di­ans spend around $200 bil­lion ev­ery year on health care—70 per cent in the pub­lic sys­tem and 30 per cent in the pri­vate sec­tor. In­surance fraud, in other words, is a $20-bil­lion in­dus­try in Canada. And be­sides the im­me­di­ate fi­nan­cial loss, ben­e­fits fraud also in­flates in­surance pre­mi­ums as big com­pa­nies try to re­coup lost rev­enue.

Ben­e­fits fraud re­quires the par­tic­i­pa­tion of pa­tients—but not al­ways know­ingly. It’s all too com­mon for sketchy providers to prey on the ig­no­rance and naïveté of their cus­tomers. In 2011, a group of med­i­cal prac­ti­tion­ers in Mis­sis­sauga ex­ploited re­cently landed im­mi­grants who were un­fa­mil­iar with the Cana­dian health care sys­tem. They con­vinced new­com­ers to hand over their lo­gin in­for­ma­tion for their in­surer’s web­site, which al­lowed them to steal the re­im­burse­ments.

Other pa­tients are will­ing col­lab­o­ra­tors, and a fraud­ster’s schem­ing is bound only by his in­ven­tive­ness. Be­cause many in­surance plans pro­vide for un­lim­ited lenses, some un­scrupu­lous em­ploy­ees buy de­signer sun­glasses and then bill in­sur­ers for pre­scrip­tion glasses. Some scam­mers are brazen enough to bill in­surance com­pa­nies for the ser­vices of pros­ti­tutes in mas­sage par­lours, claim­ing to in­sur­ers that those treat­ments are ther­a­peu­tic.

In a 2013 U.S. sur­vey by the global man­age­ment con­sul­tancy Ac­cen­ture, nearly a quar­ter of re­spon­dents said it was ac­cept­able to com­mit in­surance fraud. Ten per cent said it was okay to sub­mit a fraud­u­lent claim for ser­vices that were never ren­dered. Smith’s scam, in other words, was all too typ­i­cal. He was en­abled in part by a reg­u­la­tory blind spot: in On­tario, man­u­fac­tur­ers of or­thotics don’t need gov­ern­ment ap­proval. In Que­bec, where gov­ern­ment ap­proval is re­quired, there are half as many or­thotics claims per capita.

Ex­ec­u­tives at the TTC had been aware of a prob­lem with their or­thotic and or­tho­pe­dic ben­e­fits claims since as early as the win­ter of 2007, three years be­fore Healthy Fit was founded. Man­age­ment ap­proached the tran­sit union’s Lo­cal 113 with con­cerns that or­thotic clin­ics were of­fer­ing TTC em­ploy­ees cash vouch­ers as kick­backs for their pa­tron­age. Union ex­ec­u­tives sug­gested that the TTC is­sue a warn­ing to their work­ers about such in­cen­tives.

Three years later, in early 2010, TTC man­age­ment called a meet­ing with the ex­ec­u­tive vice-pres­i­dent of the union, Manny Sforza. Ac­cord­ing to Sforza, they wanted to ad­dress em­ploy­ees’ use of or­thotic and or­tho­pe­dic ben­e­fits. They were con­cerned that a dis­pro­por­tion­ately high num­ber of em­ploy­ees were sub­mit­ting claims. (Those se­nior ex­ec­u­tives say they have no rec­ol­lec­tion of the meet­ing.) Sforza says he sug­gested they im­ple­ment a “pre­ferred providers” list of four or five vet­ted clin­ics, and that all trans­ac­tions be con­ducted elec­tron­i­cally. Ac­cord­ing to Sforza, the se­nior ex­ec­u­tives scut­tled the idea as anti–free mar­ket and in­stead in­structed him to tell his work­ers to “be cau­tious.” TTC ex­ec­u­tives also be­gan putting up posters at TTC of­fices re­mind­ing em­ploy­ees about in­surance fraud.

By 2013, lit­tle had changed, ex­cept for an anony­mous tip line called In­tegrity, which the TTC ex­ec­u­tive es­tab­lished to col­lect al­le­ga­tions of il­le­gal or un­eth­i­cal be­hav­iour by its em­ploy­ees. On April 2, 2014, at 1:13 p.m., a tip came through.

“I would like to re­port this par­tic­u­lar or­ga­ni­za­tion, which is called Healthy Fit,” the anony­mous whis­tle-blower said. “The di­rec­tor’s name is Adam Smith. Around 90 per cent of the TTC em­ploy­ees get their or­tho­pe­dic, cus­tom footwear through this or­ga­ni­za­tion. This clinic is fraud­u­lent.” Twelve days later, an­other tip came through in an email to Man­ulife. One of the whis­tle-blow­ers said that Adam Smith was an old hand at this sort of scam. He wasn’t the first or only per­pe­tra­tor, but he’d in­dus­tri­al­ized a busi­ness model that to that point had been op­er­ated mostly by mom-and-pop out­fits.

T

he in­veS­tiga­tive unit of the TTC whirled into ac­tion. A staff sergeant was ap­pointed to lead an in­ter­nal in­ves­ti­ga­tion into the al­le­ga­tions and reached out to the di­rec­tor of claims fraud risk man­age­ment at Man­ulife, and the two or­ga­ni­za­tions teamed up. But, as it turned out, Man­ulife had failed to record the names of the ven­dors on in­di­vid­ual claims. In other words, Healthy Fit’s name wasn’t on any of the fraud­u­lent claims. The TTC had 14,000 em­ploy­ees, and Man­ulife’s in­ves­ti­ga­tors couldn’t real­is­ti­cally go through all of their records to re­con­struct Healthy Fit’s chi­canery. One of the whis­tle-blow­ers had a smart idea: “The best way to catch Adam Smith is to pose as an em­ployee of the TTC and say you heard about the deal he of­fers to its work­ers.”

And so the Toronto Tran­sit Com­mis­sion and Man­ulife in­surance started plot­ting a sting. Man­ulife hired a pri­vate in­ves­ti­ga­tion firm, In­ves­ti­ga­tors Group, to in­fil­trate Healthy Fit. In­ves­ti­ga­tors Group, which spe­cial­izes in in­surance fraud, put three of their PIs on the case, and the in­ves­ti­ga­tors were given a crash course in how to pass as TTC em­ploy­ees. They were each given a uni­form, cre­den­tials, a badge and a ben­e­fits card. They learned the lingo, how to gos­sip and how to gripe.

One of the PIs was a 22-year-old Al­ba­nian-Cana­dian woman named Glo­ria Alla. Her cover story was that she was a driver who’d only been on the job since the win­ter. And though Alla

The un­der­cover in­ves­ti­ga­tors were given a crash course in pass­ing as TTC em­ploy­ees—the lingo, how to gos­sip and gripe

was us­ing her real name, she had all the fake pa­per­work she needed to pass as a TTC em­ployee.

Alla first went to Healthy Fit on July 11, 2014, but Smith was on va­ca­tion in Ed­mon­ton for his wife’s fam­ily re­union. A chi­ropodist named Dom­i­nador Tomines saw her and made a foam cast of her foot. On her way out, the re­cep­tion­ist said that Smith would give her a call when he came back, to let her know when the or­thotics were ready. Nearly two weeks later, he called.

“I don’t think we’ve met be­fore,” Smith cau­tiously probed. “You work for the TTC right?” “Yes,” Alla said. “I work for the TTC.” “Okay. Not a prob­lem. And you said you were re­ferred to us?” “Yes, one of my co-work­ers re­ferred me to you,” Alla said. “What’s her name?” Smith asked. “Not sure, to be hon­est. I met her on my route. She was on her way home and we were talk­ing about it. I think her name may have been May or Mary.”

“Okay,” Smith said. “Just see if you can find out the name of the per­son who re­ferred you.” Once she did that, she could come in and pick up her or­thotics.

Alla went back to Healthy Fit at the be­gin­ning of Au­gust, and once past re­cep­tion, she saw Smith walk in along­side a TTC em­ployee. He walked up to Alla and in­tro­duced him­self.

“Hi, I’m Adam,” Smith said. “I think we talked on the phone last week.” “Hi, I’m Glo­ria. Yes, we did.” “What ac­cent is that?” he asked, as he led her into a room. “Al­ba­nian.” “Who re­ferred you to me?” he asked her again. “I think her name was May. Mary? Maria….” “I see,” Smith said. He couldn’t have known, but his en­tire fu­ture turned on what he’d say next. He bit: “I’m just go­ing to write down ba­si­cally a menu of ser­vices that you have avail­able to you, and then you go for what­ever you want to go for,” he said. As he’d done with Al­fonso, Smith tried to sell her or­thotics, plus shoes she didn’t need and would never re­ceive. Try­ing to sell her the com­pres­sion socks, he said, “Okay, let me show off my beau­ti­ful legs here,” pulling up his pant leg. “I get these ugly spi­der veins. I don’t know if you get these yet.” He tried to sell her a knee brace. “They go for $1,800. If you get the knee brace, you also get around $900,” he said. “So it’s funny—some of your co-work­ers, friends of mine, they say: ‘Well, shit—I got two legs, so I can get two knee braces!’ ” Alla agreed to the brace and the socks, but for both she’d need a doc­tor to sign a pre­scrip­tion. “Can I go in to a walk-in clinic?” she asked. “Yes, you can,” he said, “but some­times it’s like the Soup Nazi—no socks for you! No sleeves for you! I do have a friend who’s also a doc­tor and can get you one.” His friend was a doc­tor who had a clinic in a base­ment unit on We­ston Road, and if she men­tioned Smith’s name, he could hook her up.

Smith pulled out the Man­ulife claim forms. “Okay, I have to put you to work a lit­tle bit,” he said. He wanted her hand­writ­ing on the claim form, not his. He sat be­side Alla and told her ex­actly what to write. “Your plan is 86678,” he told her, and she wrote it down. “And this is your badge num­ber,” he said, point­ing to the blank line on the form. “Okay,” she said, “let me check my card be­cause I can’t re­mem­ber it.”

“If you’re a new em­ployee it should start with a seven,” Smith told her.

But it didn’t. The TTC sergeant had given her badge num­ber 30945, the num­ber of some­one who would have been work­ing at the TTC for years, not a 22-year-old who’d been on the job only seven months. “Okay. Hmm. This is it, right?” she asked, hand­ing her badge to Smith.

“It is…” Smith said, tak­ing a closer look. “How come your num­ber is so low?” he asked. “How long have you been work­ing with the TTC?” “I just started around De­cem­ber, Jan­uary.” Smith went quiet for al­most a minute. It didn’t make any sense. Who was this woman? Who had re­ferred her? He was some­where way off, not a say­ing a word. Fi­nally he asked: “Who did you say re­ferred you again?” “May, Mary, Maria…some­thing like that.” “Okay,” he said. He would trust her. He told Alla to sign her name. Then he could file the claim for her, and they’d both be a lit­tle bit richer.

“If any­one asks you,” he added as he left for an­other client, “you have to say I gave you the shoes.”

A

lla Soon re­ferred a sec­ond col­league, who cor­rob­o­rated her re­port, and the Toronto Po­lice Ser­vice be­gan a par­al­lel in­ves­ti­ga­tion, tipped off by the TTC. They sicced Canada’s fi­nan­cial in­tel­li­gence agency, FINTRAC (which is short for the Fi­nan­cial Trans­ac­tions and Re­ports Anal­y­sis Cen­tre of Canada) on Healthy Fit. FINTRAC has a man­date to de­tect, pre­vent and de­ter money laun­der­ing and the fi­nanc­ing of ter­ror­ism. Their in­ves­ti­ga­tors can ob­tain the power to ac­cess crim­i­nal back­ground data­bases and ar­rest records. They pored over the fi­nan­cial records of Healthy Fit, plus those of Smith, his wife and S&S Ex­ec­u­tive Ser­vices.

Smith’s prob­lem was that he was too good at his scam. All told, as much as $6.9 mil­lion in TTC claims had flowed through Healthy Fit’s bank ac­count, most of it bo­gus. He was sit­ting on a moun­tain of dough, but he couldn’t eas­ily live off it. Ev­ery time

the Healthy Fit ac­count swelled close to $130,000, he’d trans­fer some of the money into his wife’s ac­count, and then with­draw the re­main­ing tens of thou­sands of dol­lars as cash. But Canada tight­ened its anti–money laun­der­ing rules af­ter 9/11, mak­ing it harder for crim­i­nals to use the cash pro­ceeds of their crimes to live lav­ishly. To­day, pur­chases for $10,000 or more can­not be made in cash with­out the sales­per­son sub­mit­ting a no­tice to FINTRAC. Even de­posit­ing $10,000 or more into a bank ac­count raises red flags.

So Smith needed to move the cash in ways he thought were safe. He bought $76,840 worth of di­a­monds from a GTA-based dealer—di­a­monds are a favoured fi­nan­cial unit among money laun­der­ers, be­cause they’re light and por­ta­ble, and don’t come with se­rial num­bers. In one in­stance, he moved $100,000 to his wife us­ing a com­pany that was owned by his ac­coun­tant’s part­ner, to pay down their first mort­gage on their house be­fore se­cur­ing a sec­ond, cheaper one. In a se­ries of ad­di­tional trans­ac­tions, he trans­ferred $300,000 the same way. Un­be­knownst to the Smiths, FINTRAC in­ves­ti­ga­tors were watch­ing their ev­ery move.

On July 21, 2015, po­lice ar­rested Smith on his way into the of­fice, hand­cuffed him and trans­ported him for pro­cess­ing, and ar­rested and charged his two re­cep­tion­ists, although those charges were later with­drawn. Po­lice searched the clinic, seiz­ing hun­dreds of un­claimed med­i­cal de­vices, doc­u­ments and other ev­i­dence.

The Crown charged Smith with one count of fraud over $5,000 and laun­der­ing the pro­ceeds of crime, then later added con­spir­acy to com­mit an in­dictable of­fence and an­other fraud over $5,000 charge. When Smith made bail, one of the con­di­tions was that he wasn’t al­lowed to deal with any as­set worth more than $1,000 with­out no­ti­fy­ing po­lice.

Of the 725 TTC em­ploy­ees who used Healthy Fit, the po­lice pur­sued charges against those with the most com­pelling ev­i­dence and the high­est num­ber of claims sub­mit­ted. Ten for­mer TTC em­ploy­ees are fac­ing crim­i­nal charges. In to­tal, 216 TTC em­ploy­ees have been fired, or have re­signed or re­tired early to avoid be­ing fired. Sources close to the in­ves­ti­ga­tion sug­gest that city em­ploy­ees from other di­vi­sions pa­tron­ized Healthy Fit, too.

While Smith’s case worked its way through the courts, his fam­ily suf­fered fi­nan­cial dis­as­ter. When Healthy Fit closed, they lost their source of in­come. In late Septem­ber, as the sum­mer broke and the city eased into au­tumn, Smith made a deal with the Crown, plead­ing guilty to the two counts of fraud over $5,000, though the amount of money he’d helped steal was at least 1,000 times that. The TTC also sued Smith and his wife in civil court, and the court or­dered that all of his fam­ily’s as­sets and prop­erty, in­clud­ing the house, be seized or frozen. The TTC then sued Man­ulife, their in­ves­tiga­tive part­ner, claim­ing that it was neg­li­gent in not catch­ing a scam like Smith’s sooner. That case is still be­fore the courts. Man­ulife de­nies the al­le­ga­tions, say­ing they are with­out merit. No charges were ever brought against Smith’s fa­ther, David.

Smith’s on-site chi­ropodist, Tomines, ad­mit­ted his guilt in a pro­fes­sional dis­ci­plinary hear­ing, claim­ing re­spon­si­bil­ity for over $1 mil­lion worth of mainly TTC claims, which, at $100 a pre­scrip­tion, net­ted Tomines $200,000. He had his cer­tifi­cate of reg­is­tra­tion re­voked. The ad­ju­di­ca­tor stated in his find­ing: “You have brought dis­credit to the pro­fes­sion, and to your­self. Pub­lic con­fi­dence in this pro­fes­sion has been put in jeop­ardy.”

At Smith’s sen­tenc­ing, his lawyer ar­gued that his busi­ness had started as a le­git­i­mate en­ter­prise, but that cor­rup­tion set in like a slow, in­sid­i­ous rot, and that Man­ulife’s neg­li­gence en­cour­aged, even em­bold­ened Smith and his TTC clients to be more crooked than they ever might have been. Smith’s lawyer ar­gued that it was the sys­tem that was to blame, not just his client—aided and abet­ted by the en­ti­tled, ag­grieved, of­ten obliv­i­ous TTC work­ers, the in­surance staff asleep at the switch, the doc­tors who wrote the pre­scrip­tions. The TTC work­ers’ union made a sim­i­lar ar­gu­ment in ar­bi­tra­tions, stat­ing that their lead­ers had tried to warn man­age­ment back in 2007 but were re­buffed. It’s an un­set­tling thought—that Smith him­self, and his in­nu­mer­able cus­tomers, saw in his ap­par­ent im­punity his le­git­i­macy and be­haved ac­cord­ingly.

Smith pleaded guilty and was sen­tenced to two years in a fed­eral pen­i­ten­tiary, plus three years of pro­ba­tion, and last fall he left his bank­rupt fam­ily, put on his jump­suit and went be­hind bars at Beaver Creek in Graven­hurst.

As for Al­fonso, who was so hope­ful about driv­ing and so afraid of be­ing ac­cused of steal­ing a $5 bill, when his su­per­vi­sor met him unan­nounced on his route in the sum­mer of 2016, he fig­ured he was be­ing given an­other com­men­da­tion for his good work. In­stead, he was told he was un­der in­ves­ti­ga­tion for hav­ing pock­eted $500 from Healthy Fit. He tes­ti­fied be­fore TTC in­ves­ti­ga­tors that he had no idea that Healthy Fit was a scam; weeks later, he was fired. Not long af­ter he told his wife he’d been fired, she left him. His daugh­ter was only three. I be­lieve Al­fonso when he says he thought he did noth­ing wrong by be­ing a cus­tomer of Healthy Fit—that $500 was just the free mar­ket at work, and be­sides, no one around him was get­ting in trou­ble for it.

Al­fonso needed a new job, and he turned again to his love for the open road—which might yet make him happy—and the peo­ple who travel it. The same day he was fired from the TTC, he signed up to drive for Uber. ∫

As much as $6.9 mil­lion in claims orig­i­nated from Healthy Fit. Sources sug­gest that the TTC wasn’t the only pub­lic ser­vice in­volved

Adam Smith’s scam re­quired the com­plic­ity of a vast net­work of med­i­cal of­fi­cials and more than 700 TTC work­ers. Since clients had to be re­ferred, any­one walk­ing through the door was os­ten­si­bly aware that they were in it to­gether

Po­lice ar­rested Smith out­side his of­fice at Bathurst and Wil­son in July 2015

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