Easy Money

Sanjay Madan’s job was to distribute pandemic payments to Ontario families. He found an ingenious way to take millions for himself. Inside the scam that revealed chaos and a culture of fraud at Queen’s Park

Sanjay Madan had an important job, and he was proud of it: director of the Ministry of Education’s iAccess Solutions Branch, just two rungs below the deputy minister. He oversaw a team of 150, mostly coders and analysts, who created software programs for various departments in the provincial government, a tech-savvy squad who could turn some politician’s idea into a functioning digital platform. Among his team’s projects was an effort to modernize the online function of the province’s student loans program, OSAP, work for which Madan received an industry award in 2010.

Around the office—in a 30-storey building at Bay and College—Madan was friendly and well liked. He was known for working hard, often arriving early and leaving late. One colleague described him as “a true leader.” He stood a smidge under six feet, was a bit round, with hair that thinned on top and greyed at the temples, and when it came to his workplace appearance, Madan seemed to care little, sometimes wearing sandals to work. He was notoriously thrifty. When Madan went out for lunch, he borrowed a public-transit pass to save on the fare. By all appearances, he was the quintessential bureaucrat: benign, quiet, unassuming. He did his work, collected his paycheque and avoided the spotlight.

The bureaucracy had treated him well. His wife, Shalini, worked for Queen’s Park too, as a senior IT manager in the Ministry of Government and Consumer Services, and together they had a household income of more than $300,000, plus a pension plan and good benefits. In 2011, they bought a 7,000-square-foot home in Willowdale for $1.64 million, and he owned a 19-foot Crownline bowrider motorboat. Madan also had two under-construction villas in his homeland of India and had bought a downtown condo for each of his sons, Chinmaya and Ujjawal, when they were old enough to live on their own. Life was good for the family. At age 55, Madan was approaching retirement. His sons were excelling in school and had both landed jobs at Queen’s Park, too. His wife was happy.

But there was more to Madan than the quiet, hardworking family man everyone knew and liked. He had a secret revenue stream that allowed him to finance a sizable real estate portfolio, including two rental apartment buildings in Waterloo near the university district, with a total of 30 units. All told, Madan’s assets were worth more than $10 million.

His extracurricular dealings might have gone unnoticed for many more years. But last July, an employee at the Bank of Montreal noticed discrepancies in some of Madan’s bank accounts—something about odd payments from the provincial government. The bank gave Madan a call to sort it out. The large empire he had so meticulously built, through years of careful subterfuge, was about to crumble. And he knew the more the bank looked, the more they’d find.

Two hundred dollars per child wasn’t much, but for parents scrambling to purchase laptops or other technology amid the Covid-induced shutdown of in-school teaching, it was a welcome gesture. The program was called Support for Families, and the province had earmarked $340 million for it, part of the $17-billion Ontario Action Plan it released instead of a spring 2020 budget. It was also a way to direct funds back into the economy. To make the program work online, the province turned to Madan’s iAccess branch. Madan knew that the online application needed to be simple. The payment, usually made by direct deposit, needed to be quick.

Similar infrastructure already existed: the government had doled out payments to parents in much the same way only months earlier, when the teachers had staged rolling strikes. Support for Families was to be based on that. Madan, as the director of iAccess, participated in daily meetings on the program’s design and rollout. Through the process, he discovered a series of loopholes that could be exploited. Foremost among them was the fact that Ontario does not keep a complete list of every Ontario kid in school. The government has partial lists, based on public system enrolment, but no record of Ontario kids who attend private schools or kids being home-schooled. So the government had no way to verify that applicants were legitimate. An application came in, funds went out. Madan sensed opportunity.

Beginning in April, he logged in to his personal banking account and opened a series of sub-accounts. He did the same with his accounts at other banks. He did the same with the accounts of his companies. He did the same with his family members’ accounts. Madan even created accounts in the name of his deceased father. The process was laughably easy, especially for someone with some technological know-how. He could open four accounts in a single click.

While the method worked, the gains were limited. The system triggered a manual review any time more than five payments were requested for a single account—in effect, six or more children in a single family. If Madan was going to take on the risk of getting caught, the reward needed to be considerably higher.

In May 2020, just a few months into the pandemic, he called one of the managers he oversaw, a man named Hong Shi, to ask him to remove that alert. Shi thought Madan’s request was unusual. Normally, such an order would require the approval of Madan’s direct superior, the ministry’s chief information officer, Soussan Tabari, and from there it would make its way via a formal order down the bureaucracy. But these were unusual times. The pandemic had ravaged Ontario’s economy, upended lives and left parents struggling to deal with their children’s schooling. The education minister, Stephen Lecce, had said the province would do “whatever it takes” to help families through this difficult time.

Madan told Shi that children’s aid societies had complained about the payment rule. It is unclear whether they actually complained, but it would not be illogical if they had. Those organizations could easily be guardians of more than five children and thus have their application sent for manual review, slowing the pace of payment. According to Shi’s account, Madan claimed the order had come straight from the minister’s office, and that the matter was “highly confidential and only known by directors and above.”

Madan asked his staffer to relax the rule that flagged more than five payments to a single account. The request struck the staffer as highly unusual

Shi was no fool. He had a doctorate in artificial intelligence and had been at Queen’s Park since 2003. Even after speaking with Madan directly by phone, Shi wasn’t convinced. He followed up with Madan through email to double-check that he had understood correctly.

If Shi had been even a little more suspicious, if he had checked with anyone else, the scheme might have been stopped right there and then. But Madan was his direct supervisor, a man he’d known and trusted for years. And who was Shi to oppose a command from the minister? Shi changed the rule and carried on with his day, oblivious to what he had just set in motion.

With the payment rule out of the way, the game was on. Madan could apply over and over again for the same accounts. According to Madan’s later testimony, he reached out to a man named Vidhan Singh, who ran a recruitment firm in Richmond Hill, saying, “Do you want to make some extra money?” The two men had known each other for years, and Madan had hired Singh’s firm on a contract basis multiple times. Madan wanted to, in his words, show Singh some “favour.” He said that he told Singh to create new bank accounts, and court documents indicate Singh created roughly 60 bank accounts in June. (Singh denies knowledge of those accounts.)

The scheme played out after hours and on weekends. Madan started by creating a database of fake names, googling for common ones in North America and then also Chinese, Indian and Arabic ones to reflect the diversity of GTA. He also used web-scraping software to gather addresses from the Yellow Pages. He ended up with 8,000 addresses and close to 9,000 first and last names, then mixed them, taking care to ensure the resulting matches wouldn’t stand out as what he considered unlikely combinations—a “Ming Mohamed” or “Tae-won Ramesh,” say. Then Madan created a program to automatically load the information onto the application website, 500 at a time.

The problem, though, was that the website had a CAPTCHA test that required users to perform tasks such as typing out alphanumeric characters from a distorted image or clicking on a series of photos that matched a certain description. While Madan’s custom program could fill out the applications automatically, it still needed someone to submit them. Madan did not deem that a good use of his time. So, under false pretenses, he outsourced the labour to someone on his own team.

Madan called up Geetika Verma, an administrative officer who reported directly to him, to say that Support for Families was experiencing issues with application submission. He told her he needed her to manually make submissions on behalf of the applicants. As he’d done earlier, Madan explained that the task was “highly confidential.”

Verma used the software TeamViewer to remotely access a computer that she thought might have been Madan’s. She assumed she was in some sort of “back end” of the Support for Families program. There, software automatically filled out the Support for Family forms, and Verma manually completed each CAPTCHA test and clicked submit.

Verma said she carried out Madan’s instructions on multiple occasions. One of those alleged instances happened on June 10, when Madan sent her an email after work with the subject “Data file loaded.” She completed the task in about two hours, and Madan told her, “Great speed.” Verma estimated that she made between 7,000 and 8,000 submissions in May and June of 2020.

Madan enlisted the aid of another provincial employee to submit the applications, and also hired a student in India, whom he knew through his wife. Every member of the student’s family had lost their jobs due to Covid-19 and were in dire financial straits. Madan paid her a total of $300 to work through May and June.

And so the pace quickened. More than 43,000 illegitimate applications were filed. From April to August, according to the province, nearly $11 million from the Support for Families program poured into 2,982 bank accounts in the names of Madan family members, the Richmond Hill businessman Singh and their companies. From there, according to evidence presented in court, Madan transferred some $9 million from Canadian banks into Indian banks with operations in Canada, then wired it to India. Madan knew what he was doing was wrong, but the temptation was simply too great. Plus, the province’s detection measures were so lax that getting caught wasn’t even on his mind. As he would later put it: “[It] looked like easy money for me.”

By the summer of 2020, Chinmaya, Madan’s elder son, was finishing up his master’s degree and juggling exams. He also had full-time employment at Queen’s Park, where he worked long hours, all the while preparing for a job interview with Microsoft. Ujjawal was getting ready to go to Georgia Tech for graduate studies. On top of all that, a close friend of Ujjawal’s was dying of brain cancer. It was a hectic time for the young men.

One day, Chinmaya logged in to his Royal Bank account and, at least according to his telling, noticed something odd. His balance was several thousand dollars higher than it should have been, and there were multiple sub-accounts under his name. He asked his younger brother to check his own account; Ujjawal reported the same. The brothers later told the courts that they were “perplexed” by it all.

They decided to ask their father about the funds. Madan was evasive and gave vague answers. The brothers say they pressed him. Finally, their dad came clean about what he’d done. Ujjawal later told the courts he was furious. Chinmaya said he was shocked: “Here I was, working long hours to launch a promising career in a highly competitive field, and my father was jeopardizing everything.” Chinmaya testified that he made his father promise to return the funds. Both brothers said their father was left shaken.

Giving back the money was a nice idea, but reversing tens of thousands of transactions without detection would be a formidable task. As it turned out, the banks were soon onto him anyway. In July, a Bank of Montreal employee noticed a series of deposits that had been made to Madan’s account with payee names that didn’t match his own, and gave Madan a call. The woman on the line wanted to know why Madan had created so many accounts. There were also third-party deposits, not in his name, flowing into those accounts. He tried to explain but he was in such a panic he couldn’t come up with anything. After 10 minutes, the conversation ended. Madan’s world was spinning. He rushed to log in to his online banking, but he was locked out.

Madan decided the only way out of his hole was to keep digging. Three days after the call, he went to the Bay and College BMO branch in person. He told the manager that tenants who owed him rent money had diverted their Support for Families payments to him. He also said that he wanted to work with the bank to return it to the government. Of course, that made little sense: if the money was legitimate, why give it back?

The next day, to support his claim, Madan provided the bank with clippings from emails purportedly from tenants—all of them falsified—backing up his assertion. Initially, Madan felt the manager was giving him the benefit of the doubt. Still, he was anxious. He continued trying to reverse the payments through other avenues without drawing attention. At work, he suggested in a meeting that they introduce a mechanism for recipients to return the funds. He tried to reverse the transactions through his personal banking account. But nothing worked.

Madan knew that if the banks were onto him, his employer might be next. He deleted his database of fake names. He wiped his computer. He kept calling BMO to try to spin his tale, but by the third week of July, the bank stopped returning his calls.

On August 10, a senior manager for incident management at BMO phoned the executive assistant for the Ministry of Education’s deputy minister, and that same day, Madan found himself locked out of the government’s IT system. Then Madan got a call from Soussan Tabari, the ministry’s CIO.

“On the line with me is Nadine from HR,” Tabari said. “You are being placed on an administrative suspension with pay for up to 20 days pending an investigation into allegations of inappropriate conduct related to the Support for Families program.”

Madan said he had an explanation for everything. In a feeble attempt at spin, he mentioned how he had played a role in benefiting hundreds of families. Otherwise he said little.

Ujjawal had just left his job with the province to attend graduate school, but Shalini and Chinmaya were still employed with the province. Since their bank accounts had all received money, the province thought they may have all been complicit. The next day, Shalini and Chinmaya were also suspended with pay.

At Queen’s Park, the province’s forensic investigation team began to pore over Madan’s email correspondence. Soon, the province hired the accounting firm KPMG to investigate as well. Eleven people from KPMG were involved, along with four investigators from Queen’s Park. The province also reported the matter to the Ontario Provincial Police. At BMO, employees reviewed funds flowing through the Support for Families program and discovered the apparent involvement of the Richmond Hill businessman Vidhan Singh.

How does an intelligent woman making more than $100,000 a year not know the finances of the man with whom she shares a bed? How could she not know about her husband’s numerous real estate purchases? How does anyone not notice hundreds of new bank accounts in their name and millions in mysterious new money flowing in?

Shalini says that their marriage, an arranged one, was a traditional Indian union in which Madan was both patriarch and provider. According to Shalini, the finances were managed exclusively by Madan. She made purchases with two credit cards, which he then paid off. He alone had the bank card and password. She says she did not know of the more than 1,000 accounts in her name, and that she and Chinmaya worked in completely different departments from Madan. Shalini says that in the aftermath of discovering her husband’s actions, she had trouble sleeping and cried constantly. She and her sons say they suffered symptoms of severe depression, anxiety and post-traumatic stress disorder.

For his part, Madan insisted that his family had nothing to do with the matter. On an August call with Marie Dearlove, who was Tabari’s assistant, Madan said that he would fully co-operate with the investigation. Dearlove said that Madan’s composure cracked, and he wept on the call. He was so distraught that she found it difficult to make out what he was saying. After the call, Dearlove wrote to her superiors, expressing how deeply affected she was. “As a human being, I can’t help [but] be concerned,” she wrote. She asked to limit her future contact with Madan to email.

Madan later called a former subordinate and admitted, with shocking understatement, to making a “misjudgment.” He asked the former employee to relay a message to Tabari. It was a deal offer. He said he was willing to co-operate if she would spare his family. But it was too late. The matter was long out of Tabari’s hands.

Madan had admitted to fraud but not to the full extent. And he seemed more remorseful about getting caught than doing the deed. As he later put it, when speaking about his fraudulent transactions: “If I knew that these would be detected, I would never have done it.”

Of the various banks he’d used, only BMO was onto him, but the others soon would be, too. Over several weeks, Madan withdrew $80,000 in cash from his account at CIBC, then spirited much of it to India. He sent it through bank transfers, carried it by himself and had relatives do it for him.

Madan withdrew $80,000 in cash and wired much of it to India or had relatives do it for him

In October, some two months after Madan was found out, the Ontario government sued to recover the funds. The province, worried that Madan would try to hide his assets, prepared its legal paperwork in such a frenzy that it was littered with misspellings and stylistic inconsistencies. KPMG did not even have time to finish its investigation. And amid the rush, the province named all the Madans as respondents, saying they had “individually or collectively” defrauded taxpayers of millions of dollars. The Ontario government applied to the court to freeze all of the Madans’ assets.

The province soon fired both Madan and Shalini. Chinmaya had already resigned from the province and taken a job with Microsoft. But while his career had survived, his life had been upended, irreversibly stained by scandal. Ujjawal, at graduate school, faced possible disciplinary action.

Madan discovered that the OPP was investigating him by reading the news. He hired criminal lawyers for the family in addition to his civil representation.

In late 2020, as the government tried to sort out how much of his income was legitimate and how much was stolen, the courts locked nearly everything up. For months, Madan said, he had no money to pay lawyers, not even enough for food. And so he launched an action to unfreeze some portion of his money. During the virtual proceedings that followed, the Crown lawyer asked a seemingly innocuous question about Madan’s finances and his work at iAccess. In his response, Madan let slip a secret: he told the court that this was not the first time he had siphoned the government’s money. It was simply, he said, the first time he had been caught.

For more than a decade, he explained to a rapt audience, he had been operating a thriving kickback scheme. Madan was in charge of arranging short-term contracts with companies that supplied the government with temporary IT workers for the iAccess branch. He noticed that the company owners were pocketing big chunks of the fees while little money trickled down to the IT workers themselves. The contracts were so large that the owners could afford to kick back considerable sums, even millions, in exchange for landing the contract. Madan was perfectly positioned to make deals with contractors. He was so senior that there was very little oversight of the dealmaking. “I’ve seen $30 million going out the door for no deliveries and breaking of the contracts,” he said, without elaborating. Madan could hire whoever he wanted, pay whatever he wanted and arrange to get a healthy sum back in return.

Madan admitted to a rapt Zoom call that this wasn’t the first time he’d siphoned government money—it was simply the first time he’d been caught

A former iAccess software developer backed up Madan’s assessment of the branch’s environment and gave a clue as to how contracting companies allegedly took so much from the government, yet paid workers so little: by hiring mediocre workers whose rates were presumably low. Sergey Kvyatkovskiy, a temporary consultant who worked at the branch in 2013, said that among the “dozens” of contract employees he interacted with, half seemed to know “next to nothing about software development.”

Madan said he’d found a way to “leverage” the iAccess environment that would be “beneficial to everyone.” He said, “There was an inefficiency in the overall process, so we took advantage of that, I must say.” Documents filed to court show Tabari had trusted Madan’s judgment, and that she would approve whoever Madan wanted to hire, as long as it was within budget.

His most common collaborator, Madan revealed, was someone the court knew well: Vidhan Singh, the Richmond Hill businessman. According to Madan, Singh had kicked back $5 million to him over the years. Madan added that he’d had similar arrangements with six other companies, who’d sent him a total of $5 million. Much of that money, Madan said, was funnelled through a numbered firm—1846932 Ontario Inc.—which he’d set up solely for that purpose. He said he’d understated that company’s income by “substantial amounts” throughout the years. In court examinations, Singh refused to answer questions on the alleged kickback scheme.

Bizarrely, Madan then tried to argue there was in fact no overbilling of the government—that had he not received the money, the excess cash would have remained with those contracting companies. It was a hollow argument, since the mere willingness of the companies to offer such large kickbacks suggests they’d been vastly overpaid to begin with.

While the investigation into Madan’s alleged kickback operation is ongoing, the culture of kickbacks, unfortunately, is not new to Queen’s Park. A top executive at St. Michael’s Hospital has been accused of receiving kickbacks worth more than $500,000 on a 2015 construction contract. The province-funded air-ambulance service Ornge was accused of being involved in a kickback scheme in 2012 on a contract worth $144 million (although charges were never laid). In 2012, a cleaning firm that billed the province $2.2 million admitted to giving government employees 10 per cent on its contracts. Its owner told the court that he had been told by provincial employees, “This is how things work.” Garry Clement, a former director of the RCMP’s proceeds-of-crime unit who now runs a financial crimes consultancy, says the problem is rampant. “It is difficult to quantify, but I highly suspect it is far more prevalent than anyone wishes to acknowledge,” he says.

Shalini, Chinmaya and Ujjawal said they learned about the kickback scheme only after Madan’s cross-examination. In a statement to media, their civil lawyer, who also represented Madan, said they were prepared to forgive the theft of the pandemic relief funds, but they were struggling to absolve the patriarch now and felt “cruelly betrayed” by the kickback scheme.

Premier Doug Ford had campaigned against his predecessor Kathleen Wynne by alleging grift and fraud throughout her government—and now here was Madan, running two multi-million-dollar schemes just a few blocks from the legislature. Ford weighed in angrily to the press gallery: “I think all systems should be tightened up right across the board…. It absolutely infuriates me.”

By the end of January, the Ontario government had recovered the $11 million in stolen pandemic-relief funds that had been funnelled into the now-frozen bank accounts of the Madans and Singh. But the Ford government wanted more. It filed an amended statement of claim seeking the full $30 million of the contracts in question—not just Madan’s admitted share of $10 million. Queen’s Park also handed over review of the contracts of 14 temporary workers hired by Madan to investigators. The Toronto Star, which broke the story, reported that the Canada Revenue Agency was also looking into the matter.

The court eventually unfroze some of Madan’s funds for living and legal expenses, but it was no solace. Madan had felt the anger of his family, the impotence of having all those millions of dollars frozen, and the dread of looming consequences. He had cried. He had begged. He had a lot of regret. And now he was mortified to have the entire saga covered by the media.

Sometime after Madan admitted to the kickback scheme—and then tried to justify it—he changed tack again. In a direct contradiction of his earlier testimony, he said there was “no wrongdoing in the so-called kickback scheme.” He said he had hired contractors through an open bidding process, and because of him the province had in fact saved money. While Madan did acknowledge the theft of the pandemic-relief payments, he no longer accepted the blame for his actions in that particular fraud. Instead, he intimated, his employer was responsible for everything. The province had “hired incompetent or marginal employees to staff the Support for Families Program,” he claimed, and they “ought to have known that unscrupulous individuals, including potentially its own employees, might try to exploit weaknesses in its security.”

None of the allegations against any of the accused have been proven in court. Shalini, Chinmaya and Ujjawal filed counterclaims against the Ontario government for a total of $7 million. They said they were not involved in Madan’s deeds, but because they had been included in the amended statement of claim, their reputations and mental health had been damaged. They gave a laundry list of how the province was itself responsible for the theft of the pandemic-relief funds because of insufficient oversight—the chief information officer Tabari, for example, “was negligent in failing to properly supervise Sanjay.” That accusation may seem ironic—how can the province be responsible for an employee’s personal decision to steal money?—but that charge would also not be out of place in the civil courts, where fault is often found through negligence, as opposed to criminal courts, which deal with more direct responsibility.

An exhausting and very public civil trial looms ahead, on top of a separate criminal investigation and the CRA probe. Everything will likely take years to resolve. Even if the rest of the Madans were not involved as they say, the road to clearing their names is long. The family will live in limbo, their reputations battered. And as for Madan, while he might not know what will emerge from all this scandal and turmoil, he now seems certain about something else: nothing was his fault.


This story appears in the June 2021 issue of Toronto Life magazine. To subscribe for just $29.95 a year, click here.