$11M taken in alleged fraud not recovered: Crown

The Ontario government has yet to recover the more than $11 million in COVID-19 relief money a senior provincial employee is alleged to have embezzled, a judge heard on Friday.

In comments to Superior Court, government lawyer Christopher Wayland said it was wrong to say the money was back in the province's hands.

"There has been some discussion, not among counsel but elsewhere, to the effect that all of the money that we say has been taken pursuant to the fraud has been 'repaid into the provincial coffers'," Wayland told Justice Peter Cavanagh.

"What has happened here is that there's some significant account of money that has been frozen and paid into the court. The money being paid into court is not the same thing as paid into the provincial coffers."

The government alleges in an unproven civil action that Sanjay Madan, his wife and two adult children defrauded the province of at least $11 million. Madan, who had a senior IT role and helped develop a computer application related to a COVID-19 relief benefit, was fired in November. His wife and two sons all worked for the province in information technology.

The civil claim accuses them and others of illegally issuing and banking cheques under the program that aimed to defray the cost of children learning at home.

Madan's lawyer, Christopher Du Vernet, has previously said the money had been repaid.

"The province has recovered in excess of the funds it presently alleges Mr. Madan took from the Families Support Program,'' Du Vernet has told The Canadian Press.

Du Vernet has also said his client deeply regretted his actions.

According to the lawsuit, Madan, who also goes by Sadanand Madan, and his family opened more than 400 accounts at the Bank of Montreal between April and May. They then deposited around 10,000 cheques made out to fictitious applicants with thousands of non-existent children under the support program.

Madan's wife and children have said in sworn affidavits they knew nothing of his purported wrongdoing, saying they were victims and that his alleged actions were totally out of character.

Wayland said the courts will eventually have to decide if the money goes into the provincial coffers — as the government argues it should — or if it potentially goes back to the Madans.

"We will be arguing at that time that we've made out a case of fraud and the money should go into the provincial coffers," Wayland said.

Friday's hearing was to extend a previous freeze on the family's known assets and to now freeze all assets worldwide — with allowances for their legal and living expenses. Court documents indicate Madan has millions of dollars worth of cash and property.

Court heard the Crown was still actively investigating and was not aware of exactly how much money might have been taken.

"We are certainly not in a position to represent to the court that we can take anyone at their word when they tell us, 'Dont worry, everything has been recovered'," Wayland said.

No criminal charges have been laid in the case.