Bid to ‘refreeze’ assets of family allegedly tied to fraud denied
Judge dismisses claim legal fees were paid using money gained illegally
An Ontario Superior Court judge has denied the province’s bid to “refreeze” the assets of the family tied to the alleged theft of $11 million in pandemic aid.
Justice Peter Cavanagh dismissed a motion by the Crown that claimed legal fees were being paid using money gained “by way of illegal activities.”
In court documents, the province alleges “some or all of” Sanjay Madan, his wife, Shalini, their adult sons Chinmaya and Ujjawal, and associate Vidhan Singh perpetrated “a massive fraud” to funnel COVID-19 relief cash to numerous bank accounts at branches of TD Bank, the Bank of Montreal, the Royal Bank of Canada, Tangerine and India’s ICICI Bank.
The government’s allegations against the Madans and Singh have not been proven in court.
Ontario Provincial Police are investigating, but no criminal charges have been laid.
Sanjay Madan was fired last November from his $176,608-ayear job as the Ministry of Education’s information technology leader on the Support for Families program, which gave per-child pandemic payments of $200 and $250.
Shalini Madan, who is in the process of separating from her husband, was dismissed last fall from her $132,513-a-year job as a Ministry of Government and Consumer Services computer manager. She is suing the government for wrongful dismissal.
Chinmaya and Ujjawal Madan voluntarily resigned from lower-level tech jobs at Queen’s Park last summer.
Shalini, Chinmaya and Ujjawal Madan have denied any wrongdoing, as has Singh.
In civil court testimony — which cannot be used against him in any potential criminal action because it is considered compelled speech — Sanjay Madan has acknowledged Support for Families was “a freeflowing program.”
He testified that he “relaxed” some security provisions to allow more payouts to be made into the same bank accounts.
“I thought there may be an opportunity to take the funds out … it looked like easy money for me,” Sanjay Madan said in January.
The province has frozen $28 million in Madan assets in Canada and India, limiting the family to about $500,000 for their legal defence. Because most of that money has been spent on lawyers’ fees, they have been trying to tap into other funds.
But after Shalini, Chinmaya, and Ujjawal Madan filed counterclaims against the government, Crown lawyers pushed a “motion to refreeze” their assets to further limit what they can spend.
In his ruling released last week, Cavanagh concluded the funds available to the family “will be insufficient to pay in full the legal costs that will be required to defend this litigation (as well as living expenses).”
The judge added Shalini Madan could not access the family’s frozen funds to pay her $20,000 tuition and related expenses at the University of Toronto, where she is pursuing a master’s degree in education.
“This is because the Madan defendants have failed to show that there are other non-proprietary funds available that will be sufficient to pay for their legal expenses and living expenses going forward after the money in the ... legal trust account is exhausted,” the judge wrote.
Cavanagh’s decision is a setback for the Crown, which has frozen some $12.4 million in Indian bank accounts. It has also prevented the family from selling an $8 million, 30-unit Waterloo apartment complex, a seven-bedroom house in North York valued at $2.57 million, and six Toronto condominiums worth about $3 million, among other assets.
The Crown alleges Sanjay Madan was the “ringleader” of a wider “conspiracy,” predating the pandemic, which saw millions in “secret commissions” paid in exchange for hiring contractors and subcontractors on government IT projects.
In January, he testified in civil court that he and Singh and four other associates — not his wife and sons — were involved in a business that hired computer consultants in the Ministry of Education. Singh has denied that.
The Star reported last month that in August 2020, Sanjay Madan, who owns two villas in Hyderabad, flew to India, where he bought and sold “more than $500,000” in gold.
He said he “suffered a loss” when he sold it the following month. “I was in a rush to come back to Canada because (the) OPP was knocking (on) my doors,” he said.