TORONTO, Jan. 14, 2014 /CNW/ - Three Toronto-area rehabilitation clinics
have been convicted of auto insurance offences 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
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.
FSCO encourages anyone with information about auto insurance fraud to
call its anonymous tips line (1-855-5TIP-NOW). The public can also
submit anonymous tips to FSCO online through its website.
FSCO investigates allegations of misconduct, unfair practices and
non-compliance with legislation or regulations in its regulated
sectors. When warranted, FSCO takes enforcement action.
FSCO is an agency of the Ministry of Finance established under the
Financial Services Commission of Ontario Act, 1997. It regulates
insurance, pension plans, loan and trust companies, credit unions and
caisses populaires, co-operative corporations and mortgage brokerages
and administrators in Ontario.
As other Insurance Act and related criminal prosecutions remain before
the courts, there will be no further comment on the convictions from
Ontario's Auto Insurance Anti-Fraud Task Force was announced in the 2011
Budget. The Task Force was established in July 2011 and submitted its
final report to the government in November 2012, which contained 38
targeted recommendations on four key areas: fraud prevention,
detection, investigation and enforcement and regulatory roles and
Through amendments to the Insurance Act (Bill 65) in June 2013, the
government established the legislative framework for FSCO to license
health clinics that invoice auto insurers and regulate their business
practices. The licensing and regulation of health clinics was a key
Task Force recommendation.
In January 2013, the government announced the introduction of regulatory
amendments to help prevent auto insurance fraud and abuse, including:
Requiring insurers to provide claimants with all reasons for denying a
Ensuring claimants are given a detailed, bi-monthly statement of
benefits paid out on their behalf.
Requiring claimants to confirm attendance at health clinics.
Providing FSCO with the authority to stipulate by Guideline the maximum
payable by insurers for goods as well as services
Banning providers from asking consumers to sign blank claims forms.
SOURCE: Financial Services Commission of Ontario
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