Latest news with #DerekLall
CTV News
5 days ago
- Business
- CTV News
LHSC alleges fraud cost hospital $60 million— expert suggests what might have gone wrong
Allegations of a decade-long fraud contained in a pair of lawsuits filed by the London Health Sciences Centre (LHSC) have many Londoners questioning why concerns didn't come to light sooner. During the period in question (2013-2024), the hospital's leadership structure included a CEO and team of executives overseen by a Board of Directors. Western University political scientist Martin Horak believes governance issues at public institutions often have a common solution, 'The remedies to that really are transparency and accountability.' 'There's often a tendency in big bureaucracies to accumulate power or accumulate resources, and that can create an environment where governance can go wrong,' Horak adds. 'Situations where people can begin, and the organization can begin pursuing their own interests.' In a statement of claim, LHSC is first seeking $50 million in damages, plus an additional $1.5 million in punitive damages, against former executive Dipesh Patel, Derek Lall and Neel Modi, as well as director of BH Contractors Paresh Soni and construction firms BH Contractors and GBI Construction. The hospital alleges the group conspired to manipulate procurement processes, submit fraudulent documents, inflate invoices and improperly award contracts to companies with undisclosed conflicts of interest; actions LHSC believes amount to civil fraud, breach of fiduciary duty and unjust enrichment. In their second statement of claim, London Health Sciences Centre is also suing three former executives and a consulting firm for $10 million, alleging they ignored or concealed evidence of fraud that may have cost the hospital millions of dollars. LHSC filed a statement of claim in Ontario Superior Court, accusing former CEO Jackie Schleifer Taylor, former CFO Abhijeet Mukherjee, former executive Bradley Campbell and consulting firm Corpus Sanchez International, of breach of fiduciary duty, negligence and willful misconduct. None of the allegations made in the statements of claim have been tested in court, however, public reaction suggests a potential impact on the level of trust Londoners will place in future hospital governance. 'When trust is undermined, it does take a while for it to be restored. It's a complicated process,' admits Horak. In September 2024, the entire LHSC Board of Directors voluntarily resigned. Provincially-appointed Supervisor David Musyj is temporarily leading the hospital and reporting directly to Ontario's Health Minister. Horak warns against over-tightening rules in response to a governance shortfall. He says other public institutions have responded by implementing overly complex, time consuming and costly processes that ultimately hinder an organization long into the future. 'It's not so much about keeping organizations like that on a tight leash, it's about making sure that those organizations are open and transparent about what they're doing and how they're doing it.' Statements of Defence have not yet been filed by any of the individuals being sued by LHSC.
CTV News
09-07-2025
- Business
- CTV News
BREAKING: London, Ont. hospital sues former staff, contractors for $50M in alleged fraud
(L-R) Dipesh Patel, Paresh Soni, Derek Lall, Neel Modi, are all named in a fraud lawsuit by London Health Sciences Centre. London Health Sciences Centre (LHSC) is suing several former employees and contractors, alleging a fraudulent scheme that defrauded the hospital of tens of millions of dollars over more than a decade. In a statement of claim filed in court, LHSC is seeking $50-million in damages, plus an additional $1.5-million in punitive damages, against former executive Dipesh Patel, Derek Lall, and Neel Modi, as well as contractor Paresh Soni and construction firms BH Contractors and GBI Construction. The hospital alleges the group conspired to manipulate procurement processes, submit fraudulent documents, inflate invoices, and improperly award contracts to companies with undisclosed conflicts of interest, actions LHSC believes amount to civil fraud, breach of fiduciary duty, and unjust enrichment. Patel, who served as a senior executive overseeing facilities management between 2013 and 2024, is accused of being a central figure in the scheme. According to LHSC, Patel helped direct millions of dollars in contracts to companies linked to Soni, a close associate, without disclosing the conflict of interest. Patel was terminated in August 2024. Between 2015 and 2024, BH Contractors, which LHSC claims was controlled by Soni, received nearly $30-million in payments, including over $21 million for a window replacement project at University Hospital. LHSC alleges the bid for that project was irregular and non-compliant, and that BH inflated costs by about $10 million above independent estimates. In a separate instance, GBI Construction, also linked to Soni, allegedly invoiced LHSC more than $330,000 for services tied to an allegedly fictitious system. Between 2013 and 2024, LHCS alleges GBI received more than $11 million from the hospital. The hospital alleges the defendants used aliases and forged documents to secure contracts, including submitting falsified insurance and safety certifications. For example, in 2022, BH Contractors renewed its vendor-of-record status with documents allegedly signed by 'Paul Smith,' an alias LHSC says was used by Soni. The statement of claim also outlines what is believed to be suspicious real estate activity. Patel is said to have acquired or controlled at least 22 properties, 17 of which were purchased after BH won the University Hospital window contract. According to the statement of claim, Soni is linked to at least 43 properties valued at nearly $14 million, most acquired after GBI secured long-term contracts with LHSC. Modi and Lall, both former LHSC employees who reported to Patel, were also terminated — Modi for cause in February 2025 and Lall retroactively in April of the same year, due to their alleged involvement in the scheme. LHSC terminated its agreements with GBI and BH Contractors in September 2024 and June 2025, respectively. The hospital says it uncovered the alleged fraud in late 2024 during a probe into irregularities in procurement. The claim stated that full details of the alleged damages will be provided before trial but estimates current losses at approximately $50 million. The allegations have not yet been tested in court. LHSC sues ex-executives over alleged cover-up of fraud scheme London Health Sciences Centre is also suing three former executives and a consulting firm for $10 million, alleging they ignored or concealed evidence of fraud that may have cost the hospital millions of dollars. LHSC filed a statement of claim in Ontario Superior Court, accusing former CEO Jackie Schleifer Taylor, former CFO Abhijeet Mukherjee, former executive Bradley Campbell, and consulting firm Corpus Sanchez International, of breach of fiduciary duty, negligence, and willful misconduct. The lawsuit claims the defendants failed to act after being made aware of a confidential report in 2022 that raised concerns about possible fraud in hospital procurement and construction contracts. LHSC alleges the executives didn't inform the board, internal auditors, or external audit firm Ernst & Young about the allegations. Instead, the statement claims, the accused allowed staff implicated in the report to oversee an internal cost review that made no mention of the suspected wrongdoing. The hospital further alleges that Schleifer Taylor and Mukherjee signed audit representations falsely affirming there were no known issues of fraud, in breach of professional and legal standards. The defendants are jointly and severally liable, according to the claim, and the hospital is seeking to recover employment compensation paid to them, plus $100,000 in punitive damages. None of the allegations have been proven in court, and no statements of defense have been filed.
