Fired bureaucrat Sanjay Madan has pleaded guilty to stealing $47.4 million from the provincial government – including $10.8 million in pandemic aid – and been sentenced to 10 years in prison.
Fired bureaucrat Sanjay Madan has pleaded guilty to stealing $47.4 million from the provincial government — including $10.8 million in pandemic aid — and been sentenced to 10 years in prison.
As part of a plea bargain, criminal charges were withdrawn Tuesday against his spouse, Shalini Madan, although she still faces civil charges along with her husband and adult sons.
Madan — who was led away in handcuffs by an officer from the 361 University Ave. courtroom to begin his incarceration — pleaded guilty to six counts of fraud, breach of trust and money laundering.
While he had been initially charged with the theft of COVID-19 relief funds, he also admitted to stealing an additional $36.6 million as part of an elaborate “fee-for-service” computer consultant scheme dating back to January 2011.
“This was an extremely complicated — some might say genius-style — fraud perpetrated … on everyone … who lives in this province,” said Superior Court Justice Suhail Akhtar as he sentenced Madan to six prison terms to be served concurrently over 10 years. He would be eligible for parole around 2026.
“You absolutely deprived taxpayers of that money — money that could have gone into so many different things, including public services … that are required in this province,” said Akhtar, who issued a forfeiture order requiring Madan to repay the $47.4 million he stole.
His head bowed, the disgraced ex-mandarin apologized profusely to the court.
“I am very deeply sorry for my misconduct for a very long time,” said Madan, who earned $176,608 a year as the Ministry of Education’s information technology leader on the Support for Families program until he was terminated in October 2020, two months after being suspended.
“I will spend the rest of my life serving others.”
Support for Families was a pandemic fund that gave Ontario parents or guardians $200 per child under age 12, and $250 per child up to 21 with special needs, to offset online educational expenses.
Madan was in charge of the computer security protocols.
Crown counsel David Friesen said the tech whiz also masterminded a complex fraud dating back to 2011 involving kickbacks on government computer contracts.
Friesen said Madan and associate Vidhan Singh — who is charged with money laundering, fraud and possession of stolen property and is being tried separately — used real and “sham” companies to subcontract information technology work at Queen’s Park.
The government paid about $900 per day to consultants, but Madan contracted consultants at a daily rate of $400 to $500 and pocketed the difference.
It was a lucrative scam, said the Crown prosecutor, noting it collected illicit proceeds of as much as $6.6 million a year.
The massive fraud continued for almost a decade — spanning the tenures of premiers Dalton McGuinty, Kathleen Wynne and Doug Ford — until Madan was suspended on Aug. 10, 2020, after the Support for Families theft was discovered.
It was never detected in annual “value-for-money” audits by auditor general Bonnie Lysyk.
“Government officials should have known better,” noted the judge.
The kickback grift was uncovered only after the unusual Support for Families transactions were exposed.
Defence lawyer Chris Sewrattan said Madan “wants to pay the money back and he wants to clear his family members’ names because he did implicate their names in the scheme — even though they weren’t aware of it.”
In total, the restitution that must be paid is $47,462,649, including the $10,802,900 pilfered from Support for Families and $36,659,749 from the fee-for-service consultants fraud.
Much of that will soon have been repaid in the form of forfeited properties, including a Waterloo apartment complex worth more than $20 million.
But Madan would still owe $13,162,784 that must be paid back within five years of his release from prison.
After a yearlong investigation by seven detectives from the Ontario Provincial Police anti-rackets squad, Madan was criminally charged in September 2021.
OPP Staff Sgt. Sean Chatland said it was an “extremely complicated, long-term investigation.”
“This is a very significant fraud that went on for a very long time and ultimately affected a number of people who needed that money,” said Chatland.
“It was destined for people in need in a time of a pandemic … but I believe that we have held him accountable for that. It was refreshing to hear him acknowledge his responsibility for that.”
Along with Madan and Singh, Manish Gambhir of Brampton was also charged with possession of stolen property and possession of an identity document related — or purported to relate — to another person.
Those two cases are still proceeding.
While Singh, the Madans and their adult sons, Chinmaya and Ujjawal, have been in civil court since 2020, the latter two were not charged criminally.
In separate Ontario Superior Court filings, the province alleges that “some or all of” the Madans and Singh funnelled millions of dollars to thousands of TD, Bank of Montreal, Royal Bank of Canada, Tangerine and India’s ICICI accounts in spring 2020.
The civil case is continuing and the province alleges as much as $75 million may have been stolen in a “conspiracy” involving nine other people.
Madan acknowledged in civil court in 2021 that he “relaxed” computer security so more Support for Families payouts could be made to the same bank accounts.
He dubbed the pandemic fund “a free-flowing program” that was being flooded by applicants.
“There were a lot of possible applications coming in because people … discovered that there were a lot of loopholes. I thought there may be an opportunity to take the funds out … it looked like easy money for me,” Madan told the civil court.
His wife was terminated from her $132,513-a-year job as a Ministry of Government and Consumer Services computer manager. She is suing for wrongful dismissal.
The provincial government has obtained a court injunction freezing $28 million in Madan family assets in Canada and India.
That includes $12.4 million in Indian bank accounts, a Waterloo apartment complex, a seven-bedroom house in North York and six Toronto condominiums.
In August 2020 — as his criminal scheme was unravelling — Madan, who owns two villas in Hyderabad, flew to India and bought and sold more than $500,000 in gold.
He testified in civil court that he “suffered a loss” when he sold the gold there the following month as he “was in a rush to come back to Canada because (the) OPP was knocking (on) my doors.”
Investigators on the civil case also found Madan had obtained a Panamanian driver’s licence and a permanent resident’s card and registered a company in Panama, a tax haven that does not have an extradition treaty with Canada.
But he has since said his Panamanian residency lapsed because he has not been to the country for more than a year.
This article is originally sourced from www.thestar.com