Missing $11M was flagged by bank, documents show,
Province unaware $11M missing until bank raised issue, documents show
The Ontario government failed to detect that $11 million had allegedly been stolen from the Support for Families COVID-19 relief fund until being alerted by a bank two months later, court documents show.
In a revelation that comes as the deadline to apply for the renamed Support for Learners payouts passed Monday, it has emerged the province was apparently unaware of any problem with the previous program until the Bank of Montreal flagged suspicious activity.
The pandemic fund gives Ontario parents $200 per child under age 12, and $250 per child and youth under 21 with special needs to offset online educational expenses.
Originally launched last April as Support for Families, it was renamed Support for Learners in November following claims of “a massive fraud” allegedly perpetrated by a family of Ontario government computer specialists and their friend.
In documents filed with the Ontario Superior Court, the province alleges last spring, “some or all of” Sanjay Madan, his spouse, Shalini Madan, their adult sons, Chinmaya and Ujjawal Madan, and associate Vidhan Singh funneled millions in Support for Families payments to thousands of bank accounts.
Initially, it was believed that those were limited to TD and Bank of Montreal accounts, but new documents filed in court show payments also went to Royal Bank of Canada and Tangerine accounts as well as at India’s ICICI Bank.
Sanjay Madan, the information technology leader on the program’s computer application, was fired in November from his $176,608-a-year Ministry of Education job.
The government’s claims have not been proven in court and no criminal charges have been laid. Seven Ontario Provincial Police detectives are investigating.
After Madan’s testimony during cross-examination for the civil case last month, the government amended its statement of claim, alleging he was the kingpin of a sophisticated “kickback” scheme that stole at least $30 million before the pandemic.
On Jan. 8, Madan said he and Singh and four other associates — not his wife and sons, who have denied any wrongdoing — were involved in a scheme over the past decade that hired computer consultants in the Ministry of Education.
Court documents allege Madan, Singh and their colleagues received millions in “secret commissions” in exchange for hiring contractors and subcontractors on ministry IT projects.
Singh said he ran a recruiting company that placed “IT contractors” in the Ministry of Education, but he declined to respond to questions about any specifics during testimony on Jan. 11.
A court injunction has frozen about $28 million in the Madan family’s assets, including $12.4 million in Indian bank accounts, a 30-unit Waterloo student housing complex recently listed for sale for $8 million, a seven-bedroom house in North York valued at $2.57 million, six Toronto condominiums worth about $3 million, and more than $1 million in proceeds from the sale of a four-bedroom house.
Madan holds Canadian and Indian passports and has permanent residency status in the tax haven of Panama, which has no extradition treaty with Canada. He also owns two villas in Hyderabad, India.
According to the latest documents filed in court, his thousands of bank accounts allegedly received payments for between 43,000 and 54,000 kids.
Most were the $250 payments earmarked for special needs children and youth.
“The majority of the … payments into the Madan accounts were made over a four-week period, starting on May 25, 2020 and ending the week of June 22, 2020,” the court documents say.
“In August, 2020, BMO (Bank of Montreal) alerted MOE (Ministry of Education) of abuse of the SFFP (Support for Families program), involving BMO clients by which Ontario may have been defrauded,” the documents continue.
That suggests no one at the ministry noticed the problem for about two months.
Under oath on Jan. 8, Madan said Support for Families was “a free-flowing program.”
“There were a lot of possible applications coming in because people …discovered that there were a lot of loopholes,” he told the civil court.
“I thought there may be an opportunity to take the funds out … it looked like easy money for me,” Madan said.