'Everybody missed the boat' on alleged fraud scheme but can London hospital recoup costs?

CBC News

· Posted: Jul 11, 2025 4:57 AM EDT | Last Updated: July 11

A lawyer who specializes successful fraud investigations said the procurement ungraded enveloping London's largest infirmary includes allegations of a graft that should person been casual to catch. 

"It's not a blase scheme," said David Debenham, president of the Association of Certified Forensic Investigators of Canada.

"There's truthful galore ways this could person been caught and nipped successful the bud that it really raises questions of the radical hired to drawback this benignant of thing. They were either prevented from doing their job, oregon weren't susceptible of doing it." 

Debenham was commenting connected this week's bombshell quality that London Health Sciences Centre (LHSC) is suing 5 of its erstwhile executives, alleging they took portion successful a "fraudulent scheme" to usage infirmary contracts to funnel wealth into companies for their ain benefit.

The lawsuit, which contains allegations not proven successful court, also alleges the wealth was utilized to acquisition much than 60 houses.

Another revelation successful the statements of claim: That immoderate of the now-fired LHSC executives became alert determination was a occupation with however declaration wealth was being handled but didn't enactment to study it. 

Debenham said ample nationalist contracts should travel an unfastened procurement process wherever aggregate bids are solicited, truthful they tin beryllium taxable to scrutiny and ensure taxpayers get just worth for nationalist money. 

According to the statements of assertion filed successful the 2 lawsuits, the executives side-stepped procurement rules that necessitate unfastened bidding. The alleged fraud besides dates backmost to 2013, according to the connection of claim.

"Everybody missed the vessel and the question is why," said Debenham.

No transgression charges person been filed successful the case, though London constabulary person confirmed to CBC News they are investigating. 

Debenham said he'd beryllium amazed if the full messiness doesn't trigger a nationalist inquiry.

Norman Groot is a Toronto-based lawyer who specializes successful helping fraud victims recover money. He said if it proves existent wealth was spent connected houses owned by the infirmary executives, the funds shouldn't beryllium hard to recover.

"If they tin bash each the tracing, past they should beryllium capable to retrieve retired of these homes," helium said.

Other infirmary procurement scandals

London's infirmary isn't unsocial successful dealing with procurement scandals. 

In 2016, Ottawa Hospital sued two former directors, alleging they utilized contracts and kickbacks to defraud the hospital. The lawsuit was settled 4 years aboriginal with those settlements not made public, a determination Debenham was captious of.

In 2023 two men were charged with fraud aft a probe into $300-million redevelopment of St. Michael's Hospital successful Toronto.

Debenham said the quality is frustrating for taxpayers accustomed to proceeding astir under-funding of the health-care system. Last September the state appointed an extracurricular supervisor to instrumentality implicit LHSC operations amid questions astir fiscal absorption of the hospital. 

"We look to beryllium throwing a batch of wealth astatine the health-care strategy and present we're uncovering retired that nary substance however overmuch we're throwing astatine it, it whitethorn not beryllium going to patients. That's a scandalous happening successful itself," said Debenham. 

Doris Grinspun, main enforcement serviceman of Ontario's Registered Nurses Association, said the suit and the allegations surrounding it could pb to a alteration of nationalist spot successful the infirmary and wider health-care system. 

"It creates much and much instability for LHSC and spills implicit into the remainder of the system," she said. "We request to cleanable up things and spot if determination are different organizations wherever this is happening and tackle it caput on."