10 TTC employees charged with fraud in alleged $5M insurance scheme

TORONTO _ The Toronto Transit Commission says one current and nine former employees are facing criminal charges in connection with an alleged multimillion-dollar insurance scheme.

The TTC announced the charges Thursday as part of an ongoing investigation by the police and the public transit agency into false health benefit claims.

To date, the TTC says 150 employees have been fired, retired or resigned to avoid dismissal as a result of the investigation, which started in 2014.

All 10 people charged face one count of fraud over $5,000. Of the 10, one is an employee on medical leave.

The allegations centre around Healthy Fit, a Toronto orthotics store, which allegedly provided some or no products that were invoiced to Manulife Financial, the TTC’s insurance provider at the time.

It’s alleged that Healthy Fit then shared the insurance payments with TTC workers involved in a $5-million scheme.

The TTC says it anticipates more employee dismissals as it continues its investigation.

“The TTC has insurance to protect itself against financial loss due to benefits fraud,” the transit agency said in a statement.  “Nevertheless, restitution is being sought from anyone who made an improper claim against the TTC’s benefits plan.”

Hamilton-Niagara RCMP Make Arrest in Synthetic Identity Fraud

The Hamilton-Niagara Regional Detachment of the Royal Canadian Mounted Police (RCMP) – Financial Crime Section have arrested and charged 48 year old Naeem AKHTAR from Markham, Ontario with Fraud and Money Laundering. The value of the fraud is presently estimated at this time to exceed $3 million dollars.

The scheme involved over one hundred false identities used to obtain credit cards and other loans from Canadian financial institutions. Known as a make-up, pump-up, run-up scheme, the suspect created an elaborate network of false identities and shell companies. The fake identities used included false Ontario driver’s licenses or actual Province of Ontario driver’s licenses created using fake foreign passports, fake Social Insurance Cards or false Canadian Permanent Resident cards.  This differed from traditional identity theft in that the personas created did not exist at all, which poses a threat to the Government of Canada’s systems and programs as well the integrity of Canada’s financial institutions.

Credit was created using the fake identities with falsified employment records and paystubs from the shell companies controlled by AKHTAR. The credit was increased by patiently accepting credit increases over the years. The shell companies were used to launder the proceeds of the crime by creating false invoicing for the fraudulent credit cards.

The scheme was further complicated by the use of postal mail forwarding services.  Through this AKHTAR was able to provide dozens of seemingly unrelated and innocuous addresses on credit applications but the mail would actually be redirected to rental mailboxes controlled by him.    AKHTAR is scheduled to appear in court on August 15th, 2017 in Newmarket, Ontario.

This investigation was assisted by proactive work from the anti-money laundering and corporate security units at Canadian Tire Bank, Canadian Imperial Bank of Commerce, The Bank of Montreal, TD Bank, Royal Bank, Scotiabank, and the Ontario Ministry of Transportation. The RCMP would also like to thank the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for its collaboration in this investigation.

“The creation and use of synthetic identities by criminals to enrich themselves is a threat to all Canadians and poses a significant risk to Canadian government programs and financial institutions. This investigation is an example of the effective partnership between the RCMP, FINTRAC and Canadian Financial Institutions. The RCMP is committed to working together with our partners to combat this type of fraudulent activity by criminals who only seek to enrich themselves at the expense of Canadians” said Inspector Todd Gilmore, Southwest District Commander.

The investigation is ongoing.

Website: RCMP in Ontario
Twitter: @RCMPONT
Facebook: RCMP.Ontario

SOURCE Royal Canadian Mounted Police

ACL Survey Finds Government Agencies Underperform on Fraud Detection & Reporting

Source: PRNewswire

Less than one third in public sector say the majority of fraud is ever detected

Government agencies performed significantly worse than the business sector on fraud detection and mitigation, according to a new survey. Less than one third of government respondents said the majority of fraud is detected and less than half said fraud that is detected ever gets reported, compared to 42 percent and 60 percent of respondents from the commercial sector, respectively.

The 2017 Fraud Survey from ACL, a risk management software provider helping governments and companies around the world stamp out fraud, polled more than 500 audit, compliance and risk management professionals on anti-fraud practices.

“Fraud in government agencies is estimated to cost taxpayers more than $136 billion each year1, and that’s just from improper payments,” commented Dan Zitting, chief product officer at ACL. “While both the public and private sector need to enhance their anti-fraud practices, the relative underperformance by government agencies should be a major concern of elected officials and their constituents.”

The survey also found that less than 30 percent of anti-fraud recommendations are fully acted upon by government agencies, compared to about 40 percent in the business sector. Both government and business respondents said the primary reasons for the failure to take action is lack of time/resources or approvals. However, this leading reason fraud is allowed to go unchecked was reported by less than a quarter of respondents (21 percent) in corporate firms, compared to nearly 40 percent of public sector professionals.

“Having worked with a number of government agencies to help them stop fraud, we were surprised by the differences in fraud management found between government and business,” said Scott Robinson, director, public sector, ACL. “It is clear that the public sector remains highly susceptible to fraud, and that many agencies are neglecting to take the necessary action to fulfill the public’s trust.”

1,700 names and phone numbers also stolen in data breach

Read more

2 men charged, 3rd sought in $10M fraud ring bust

By News Staff | City News

Toronto police have arrested two men, and are looking for a third, after they allegedly broke up a massive GTA fraud ring.

Police allege the trio used identity theft and fraud to fund a lavish lifestyle that included $10,000 crocodile shoes and $150,000 watches.

But the flashy clothing was just the tip of the iceberg: they allegedly stole $10 million from Canadians, Canadian institutions, and people living abroad.

The investigation began last summer. In the probe, police allegedly seized “37 fraudulently-obtained credit cards, hundreds of pieces of presumably stolen mail, and a series of notebooks containing the handwritten identity information of approximately 5,000 GTA residents.”

The details in the mail and in those notebooks was the starting point for the investigation, dubbed Project Royal. The Royal Canadian Mounted Police, the Competition Bureau of Canada, the Ontario Ministry of Government and Consumer Services, the Ontario Ministry of Finance, the U.S. Federal Trade Commission, and the U.S. Postal Inspection Service were all involved.

Adedayo Ogundana, 45, also known as Oladipupo Ogund, of Toronto, was arrested on Dec. 13, 2016. He’s charged with two counts of fraud over $5,000; 10 counts of fraud under $5,000; possession of property obtained by crime over $5,000; and possession of proceeds of crime.

He will appear in court on Thursday.

Adekunle Johnson Omitiran, 37, of Toronto, surrendered to police on April 27. He is charged with fraud over $5,000; four counts of fraud under $5,000; two counts of identity theft; trafficking identity information; possession of credit card obtained by crime; possession of proceeds of crime; possession of proceeds of crime; and fail to comply with probation.

He will appear in court on Friday.

Police believe the Omitiran had ties to people with “legitimate” access to identity information. Those people, police allege, sold information to Omitiran. Police are trying to track down those people.

A warrant has been issued for Duro Akintola, 44, also known as Michie Noah, of Toronto.

Emmanuel Salako, 47, of Toronto, also known as Gee Salaq, has been indicted by the United States Postal Inspection Service in Chicago under the name George Salako. He is wanted in the U.S.

Nova Scotia investment scam mastermind ordered to pay victims $1.1 million

By Aly Thomson


HALIFAX _ The Nova Scotia financial manager behind an investment scam “paid a hard price for his greed,” a judge said as she ordered him to pay back about 200 investors he bilked out of $1.1 million.

Quintin Sponagle of Upper Vaughan, N.S., pleaded guilty to fraud in December.

The charge involved 201 people who invested more than $4 million through Jabez Financial Services Inc. a Windsor, N.S., company registered in Panama. Sponagle has admitted he was responsible for $1.1 million that was not invested.

He used that money to buy cars, recreational vehicles and property and for international travel, cash withdrawals and other personal expenses, Judge Anne Derrick said in a new decision.

Derrick said he used other people’s hard-earned money to “feather his own nest,” and ordered Sponagle to pay the victims $1.1 million in restitution.

“Mr. Sponagle betrayed his investors and whatever moral code he may have had, primarily so he could live the good life and enjoy material benefits that otherwise would presumably have been beyond his means,” said Derrick.

“The fact that no restitution has been made by Mr. Sponagle in the over 10 years since his fraud was … means that these many victims have had their trust betrayed and have suffered harm, in some cases irreparable harm, to their future plans, to the security they were counting on for their retirements, and to their health, well-being and happiness.”

Derrick also accepted a joint recommendation from Crown and defence lawyers to sentence Sponagle to a year’s probation and time-served in jail.

Sponagle spent 19 months in Panama’s La Joya Penitentiary described by the judge in this case as “one of the world’s worst prisons.”

“He has paid a hard price for his greed,” she said of his time imprisoned in Panama.

Sponagle was brought back to Nova Scotia in November 2014 and released on bail a month later after posting a $45,000 surety.

The judge said victim impact statements revealed Sponagle’s actions affected the investors emotionally, mentally and physically, and shook their trust in others.

Many victims were from Sponagle’s “immediate social group,” she said.

“I have no doubt that Mr. Sponagle was seen by his hapless investors as an upstanding fellow citizen who provided no reason for anyone to mistrust him,” the judge said. “Mr. Sponagle used the trust he had been accorded by vulnerable and naive victims for his personal benefit.”

In October 2011, the Nova Scotia Securities Commission found Sponagle and Trevor Hill engaged in unfair practices, solicited investments without being registered in Panama or Canada, and failed to file a prospectus before distributing securities.

The commission concluded that between April and September 2006, the pair traded securities after receiving $4.1 million from 137 residents of Nova Scotia and 52 residents of other provinces.

“Mr. Sponagle spent investors’ money on himself, and indulged friends, relatives and business associates including Mr. Hill and his family,” the commission said in a statement dated Oct. 20, 2011.

The commission said the pair’s actions amounted to a “deceptive and dishonest ruse, designed to extract money from trusting and unsuspecting Canadian investors. It was in the nature of a ‘Ponzi scheme.”

It said Sponagle was the “mastermind of this scam,” and it banned both men from becoming or acting as a director or officer of any publicly traded company, or acting as an investment fund manager or promoter.

They were also ordered to each pay a $500,000 fine the maximum penalty at the time.

Auditors recovered about $2 million from Sponagle’s accounts, but only a portion was returned to investors, once financial fees were covered.

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