Alleged fraud worth $60M uncovered at London Health Sciences Centre

CBC

3 days ago

An audit has uncovered a decade-long fraud at the region's largest hospital network with the London Health Sciences Centre (LHSC) filing two separate lawsuits implicating five former executives, a contractor and companies hired to do work.
The lawsuits total more than $60 million and allege that some executives knew about the scheme and did nothing to stop it. One of the lawsuits also links more than 90 "suspicious properties" worth almost $20M to three people involved in the alleged scheme, purchased after multi-million dollar contracts were awarded by the hospital.
London police are now investigating, said David Musyj, the supervisor brought in to oversee an overhaul of the struggling hospital, which is projected to have a $150M deficit.
"The Fraudulent Scheme was a calculated, multi-year campaign of deceit and theft, deliberately engineered to misappropriate public funds for personal and unlawful gain," the lawsuit that was filed Wednesday alleges.
Court documents show LHSC's former vice president responsible for facilities, Dipesh Patel, who was terminated in August 2024, awarded multiple contracts over the years to his "personal contact" Paresh Soni, who ran seven different companies. Former Director of Facilities Derek Lall, who reported directly to Patel, is also named in the lawsuit.
It's alleged the men were involved in what's described as actions that "flouted, circumvented, ignored and/or frustrated" the rules around procurement.
The hospital lost $50 million, officials allege, when contracts were awarded despite conflicts of interest, inappropriate bids and inflated invoices for work that was never done.
Executives complicit, lawsuit alleges
Additionally, three executives are being sued because they allegedly knew about the fraud in April 2022 and did nothing about it, according to a second lawsuit filed for $10 million.
The second lawsuit names Abhi Mukherjee, the hospital's chief financial officer from 2022 to 2024, Jackie Schleifer Taylor, who was the CEO from 2021 to 2024, and Brad Campbell, the hospital's corporate hospital administrative executive from 2022 to 2024.
Before being hired by the hospital, Campbell also worked for six years as a consultant for a company called Corpus Sanchez International Consultancy Inc., and was performing various executive roles for the hospital. Corpus Sanchez is also named in the lawsuit.
Among the allegations in the two lawsuits:
Patel abused his position of trust as a senior executive and colluded with others to falsify documents, make payments for no legitimate reasons, inflated invoices, and charged for work that was not performed, the documents allege.
Four people closely connected to Patel and nine companies operated by those people participated in the alleged fraud billed the hospital for window replacements, general contractor services and for diverting funds "for their own personal benefit."
Money made from the fraud was used to buy more than 95 properties in London, including single-family homes, apartment buildings and townhouses.
In April 2022, Schleifer Taylor was told about possible fraud in the facilities procurement and construction contracting departments, and told Campbell about it, but they didn't tell the board of directors, launch an investigation, or tell internal or external auditors.
Mukherjee was told about the possible fraud in December 2022 but and also didn't launch an investigation.
The executives allowed people implicated in the fraud to lead a review into rising construction costs, which led to a 2023 report that didn't address or even acknowledge the existence of the allegations.
"As we vigorously pursue these civil cases and continue our forensic audit, we have also provided these findings to London Police Service as they continue their investigation. At this time, any other staff involved in this misconduct are no longer employed at LHSC," Musyj wrote in an email to hospital staff Wednesday.
CBC News requested an interview with Musyj Wednesday but he was not available for interviews. The province told CBC News it will not comment while the matter is before the courts.
"I recognize this is a deeply disappointing moment. This is not who we are at LHSC and it's certainly not a reflection of our team," Musyj wrote.
Musyj also shared that a new whistleblower policy is in place, and reminded employees that they can provide confidential information.