Family involved in theft of $11M of COVID-19 relief funds, Ontario government claims

A Toronto couple and their two adult sons, who all worked as Ontario government computer specialists, are alleged to have been involved in the theft of more than $11 million in COVID-19 relief funds, the Star has learned.

According to documents filed with the Ontario Superior Court, some or all of" Sanjay Madan, Shalini Madan, their sons Chinmaya Madan and Ujjawal Madan, and their associate Vidhan Singh, allegedly perpetrated a massive fraud" by funneling millions of dollars in pandemic payments to a slew of bank accounts.

While the Ontario Provincial Police Anti-Rackets Branch is investigating, no criminal charges have been laid.

The allegations have not been proven in court.

In a statement of claim, the government alleges damages for fraud, theft, conversion, and conspiracy in an amount estimated to be at least $11 million."

Sanjay Madan's lawyer Christopher Du Vernet told the Star that he had not been given instructions from his client to speak to the media about the case.

Shalini Madan and Chinmaya Madan did not return calls or emails and the Star could not reach Singh, who lives in Richmond Hill.

But in a brief interview, Ujjawal Madan said he was aware of the government's case involving the family.

I cannot comment at this time. It's not a good time," he said politely.

The civil action was filed on Nov. 6 so the provincial government could secure a court injunction to freeze assets after it appeared millions had gone missing between April and June.

Sanjay Madan, who earned $176,608 last year, worked as a director in the Ministry of Education's iAccess Solutions Branch and was the information technology leader of the government's online Support for Families program (SFFP), which dispensed more than $300 million to parents in the spring.

Sanjay was the IT leader ... and as such had in-depth knowledge of the SFFP IT application, including how it worked, its strengths, its vulnerabilities, and any deficiencies in (the Ministry of Education's) ability to verify applicants' identities and information provided by them," the Ministry of the Attorney General's court submission contends.

He was suspended with pay on Aug. 10 pending the outcome of an investigation by auditors KPMG before being terminated with cause earlier this month.

The government's 25-page factum says after the emergency aid program was launched in April, over 400 new accounts at the Bank of Montreal were opened in the names of the Madan respondents."

Over $2.5 million in Support for Families payments were then deposited into those BMO accounts. The BMO payments alone would be equivalent of payments to a family of more than 10,000 children," the court documents say.

The respondent Vidhan Singh, who is likely known to Sanjay Madan, received $42,500 in Support for Families payments, equivalent to having over 200 children," the factum continues.

It is likely that similar payments were made into accounts at other banks. At TD there are over 30,000 payments totalling approximately $8 million with the same or similar characteristics and payment patterns as the SFFP payments made into the Madan BMO accounts," the filings say.

Authorities were alerted by the unusual banking activity.

It is estimated that more than $11 million in Support for Families payments were fraudulently deposited into accounts controlled by the interested party respondents."

The program, which paid parents $200 per child under the age of 12 and $250 per child or youth with special needs under the age of 21, was designed to help defray the costs of at-home learning early in the pandemic.

Money was just being shovelled out the door with little or no accountability," an insider told the Star.

This (more than $11 million alleged theft) could be the tip of the iceberg," said the source, speaking confidentially in order to discuss matters that have yet to be proven in court.

Indeed, it was initially thought that about $100,000 was missing.

Shalini Madan, who earned $132,513 last year, is the manager of E-Ministries Support at the Ministry of Government and Consumer Services.

She was suspended with pay on Aug. 11 - one day after her husband - pending the KPMG probe.

Chinmaya Madan, their elder son, worked for three years as a technical product manager at the Ministry of Government and Consumer Services. After being suspended with pay on Aug. 11, he resigned. His LinkedIn profile said he now works at Microsoft in Seattle.

Ujjawal Madan, another son, was a contract employee with the Ministry of Education's iAccess Solutions Branch.

Ujjawal reported to an individual in iAccess who in turn reported to Sanjay. His contract was to last through August 2020, but he left in early August 2020 to return to school" at the Georgia Institute of Technology in Atlanta, the court records say.

Sanjay hired Ujjawal into Sanjay's cluster' approximately one year ago, despite a clear direction not to from his superior," the records say, noting the supervisor warned it would give rise to a clear conflict of interest."

The Madan sons' salaries were not published on the government's annual Sunshine List" of people earning at least $100,000 a year.

Also named in the government's action is Vidhan Singh, who is the sole signing officer for a company called Wang & Associates Professional Corporation.

As well, a firm called Intellisources Inc., of which Sanjay Madan is the sole director, is alleged to have received 20 Support for Families payments to its Bank of Montreal account.

The government is also looking into Newgen Solutions, of which Shalini Madan is an officer, and 10583570 Canada Ltd., a corporation that lists the Madan family home as its head office.

According to the court documents, KPMG determined that Sanjay Madan directed a change to a payment rule within the computer application" that allowed for more than five electronic fund transfer (EFT) payments into a single bank account.

The government had limited payments to five per household.

On May 29, 2020, the payment rule was relaxed' by a subordinate ... on Sanjay's direction," the court documents say.

Sanjay Madan assured his underling this change was highly confidential and only known by directors and above' that the change was requested by" Education Minister Stephen Lecce's office and that it was designed to address complaints from Children's Aid Societies."

But Lecce's office made no such request" and Sanjay Madan's bosses were not aware of any such edict, the court documents say.

As a result of Sanjay's rule change, an applicant could request that five EFTs be made into a single account on each of May 25, 2020, and June 1, 8 and 15, 2020, resulting in a total of 20 EFTs being deposited into that account, without such request being automatically stopped from proceeding to payment."

Some 10,283 deposits were allegedly made into the family's Bank of Montreal accounts, including $693,650 for Sanjay, $690,950 for Shalini, $615,200 for Chinmaya, $596,700 for Ujjawal, and $4,950 for Intellisources Inc.

The government alleges approximately 95 per cent" of the payments were for $250, meaning they were supposed to go to families of special needs children and youth.

When Sanjay Madan was asked about the unusual payments in July, he did not suggest there was some sort of error or technical glitch on the government's part, but rather ... offered various incredible explanations or justifications for the payments and ... suggested that the funds be returned."

At the same time, he claimed that he owns properties and that his eligible tenants directed SFFP payments to him in partial satisfaction of their rent. However, given that the SFFP is a one-time payment per child, the total payments into the Madan BMO accounts are equivalent to benefits for over 10,000 children."

The documents allege Sanjay Madan also advised that he has an explanation for all of this' and that he has helped hundreds of families,' or words to that effect."

In a separate six-page affidavit filed to the court on Nov. 6 in order to gain access to some of his funds, he said he has not yet filed a statement of defence due to a cash crunch.

The government injunction prohibits me from dealing with any of my assets ... all of my assets are frozen," said Sanjay Madan, who won an IT World Canada manager of the year" award for enterprise in 2013 for his work modernizing the Ontario Student Assistance Program's application system.

Included in the cash he cannot access is $1,031,407, the net proceeds of the sale of a North York house he sold on Sept. 29 just before the injunction was filed.

I have not been able to pay any bills since that time, and my family's food supply is running low. If I do not obtain access to my funds, I will have no money to pay my bills or buy food," he said.

If the ... motion is not granted, I will have no funds with which to retain either civil or criminal counsel, and will be unable to do so. I will also have no money for my monthly bills or for food. My son's tuition fees and living expenses for Masters program at Georgia Tech ... must be paid by the second week of December 2020 or he will not be able to continue in the program, thereby putting his future prospects at risk."

Robert Benzie is the Star's Queen's Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie