Three Toronto-area rehabilitation clinics have been convicted of auto insurance offenses resulting from co-operative investigations involving the Financial Services Commission of Ontario (FSCO), the Insurance Bureau of Canada, multiple insurers and police. The prosecutions have resulted in maximum fines of $100,000 per conviction.
These convictions stem from an investigation into a staged auto accident ring, dubbed “Project Whiplash” by Toronto Police. According to the Insurance Bureau of Canada, insurers paid out an estimated $4 million in fraudulent claims as a result of this scam.
Following is a summary of some of the convictions achieved to date:
- McCowan Rehabilitation Clinic was found guilty of two offences: knowingly making a false or misleading statement to an auto insurer to obtain payment for goods and services provided to an insured and engaging in unfair or deceptive acts or practices. The clinic was sentenced to the maximum fine (at the time of the offence) of $100,000 for each offence. In addition, a significant restitution order was imposed of $120,000.
- Physiotherapy Clinic faced similar charges. The registered company director at the time of the offence, Nishanthan Ponnuthurai, pleaded guilty on behalf of the clinic to making false statements, and the company was fined $100,000.
- North York Health and Rehabilitation has also been convicted of similar charges and remains before the courts for sentencing.
In addition to the convictions for the clinics, the following individuals were fined:
- Sipaskaran Sabaratnam, a principal of Ontario Rehabilitation Clinic, entered a plea of guilty to a charge of failing to take reasonable care to prevent the company from making false statements to an insurer. He was sentenced to a $10,000 fine, pursuant to the Insurance Act.
- Nishanthan Ponnuthurai, a principal of Physiotherapy Clinic, pleaded guilty to a charge of failing to take reasonable care to prevent the company from providing insurance claims forms to an insurer that were not in accordance with the Insurance Act and regulations. He was sentenced to a $9,000 fine.
- Jeyakanthan Thivendran, a principal of North York Health and Rehabilitation, pleaded guilty to a charge of failing to take reasonable care to prevent the company from providing insurance claims forms to an insurer that were not in accordance with the Insurance Act and regulations. He was fined $5,000.
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