LHSC names 5 former executives in $60M fraud lawsuits
Six former LHSC employees are named in the two lawsuits, including five former top executives
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London Health Sciences Centre filed one of the largest fraud lawsuits in the history of Ontario hospitals on Wednesday, alleging a former senior executive masterminded a “fraudulent scheme” involving procurement and he and others used funds they obtained to buy dozens of properties.
The hospital has filed two civil lawsuits, one for $10 million and the second for $50 million, against former hospital executives, businesses and other parties, including former chief executive Jackie Schleifer Taylor, alleging an executive committed fraud over 10 years, and when the alleged procurement frauds were found out, top administrators failed to act.
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The civil lawsuits filed in Ontario Superior Court, one in June and the other Wednesday, describe an alleged scheme involving construction and facilities management contracts in which the hospital was charged for work that wasn’t done, or overcharged for what was done, with a few individuals pocketing the cash and using that money to buy real estate.
The hospital alleges in one statement of claim it was defrauded of “tens of millions” of dollars.
“LHSC claims damages and/or equitable compensation in respect of the amounts of these losses, damages and expenses. Full particulars will be provided prior to trial, but the quantum is provisionally estimated at $50 million,” the lawsuit filed Wednesday says.
The lawsuit naming three former employees, two individuals, nine companies and two individuals identified as John and Jane Doe is seeking “$50 million plus further sums” in damages and $1.5 million in punitive damages.
The former employees are Dipesh Patel, Derek Lall and Nilesh (Neel) Modi. Patel is the former executive, capital redevelopment and environmental operations at LHSC. Lall is the former director of facility management at LHSC while Modi worked at LHSC for nearly 11 years, the claim says.
The individuals are Patel’s spouse Varsha Patel and Paresh Soni, described in the lawsuit as a “close personal contact” of Patel’s.
“Soni and Patel share multiple financial endeavours and personal connections, including common friends,” the claim says.
The hospital filed a $10-million lawsuit in June against Schleifer Taylor, Brad Campbell, former corporate hospital administrative executive; Abhijeet (Abhi) Mukherjee, former chief financial officer; and Corpus Sanchez International Consultancy Inc.
“LHSC began investigating serious irregularities arising from certain procurement-related matters in or around the fall of 2024. The investigation revealed a fraudulent scheme to defraud LHSC through improper procurement practices that commenced in or around 2013,” the statement of claim filed Wednesday said.
“This action arises from a prolonged, deliberate, and co-ordinated fraud orchestrated by the defendants to systematically defraud LHSC of tens of millions of dollars through deception, concealment, and the abuse of trusted positions,” the lawsuit says.
The $50-million lawsuit alleges after Dipesh Patel was appointed vice-president of facilities management at LHSC in 2013 he worked with others to defraud the hospital by awarding construction and facilities management contracts to several companies owned by Soni.
Soni is the owner of the GBI group of three companies and a company called BH Contractors, the claim says.
“Safeguards at LHSC were flouted, circumvented, ignored, and/or frustrated in a manner that permitted the fraudulent scheme to occur for approximately a decade,” the lawsuit says.
“Patel conspired with the other primary defendants to perpetrate a fraud against LHSC by improperly facilitating the award of multiple major LHSC contracts to Soni’s companies . . . . He did so by, among other things, abusing his position of trust as a senior executive of LHSC,” the claim says.
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Between 2015 and 2024, BH Contractors received $29.6 million from LHSC for general contractor services including window replacement, the lawsuit says.
The $22 million the company received for a contract to replace windows at University Hospital was $10 million higher than BH Contractor’s initial bid and exceeded an independent cost estimate by about $9.3 million, the claim says.
“LHSC has experienced multiple significant issues with the quality of the installation and of the windows themselves, resulting in issues with water leaks and insects,” the lawsuit says.
Patel conspired with other primary defendants to create BH Contractors and to cause LHSC to award significant contracts over the course of 10 years, the claim says.
Patel and other primary defendants in the lawsuit “improperly” added BH Contractors to LHSC’s vendor of record list by “fraudulently” transferring the listing of another vendor on the list of companies from whom LHSC is authorized to procure goods and services to BH Contractors, the claim says.
Patel also conspired with other primary defendants to create GBI and cause LHSC to award significant contracts valued at more than $11 million, the lawsuit says.
Patel caused LHSC to retain GBI to provide consulting services with an initial purchase order in 2013 that was followed by numerous other orders, the claim says. Soni helped draft a “competitive bidding exemption” briefing note that Patel submitted to justify the purchase order’s exemption from competitive bidding, circumventing LHSC’s procurement processes, the lawsuit says.
In 2016, Patel and Lall were the only two evaluators for a facilities RFP that was awarded to GBI as three-year contract, the claim says.
“GBI was awarded the bid despite there being multiple deficiencies with its submission and qualifications, including non-compliance with insurance requirements, no valid Workplace Safety and Insurance board certificates, and a lack of relevant experience,” the lawsuit says.
GBI received $11.2 million from LHSC for facilities management services between 2013 and 2024, the claim says.
Patel has acquired 22 properties since 1998, some through numbered companies, valued at $9.4 million and 17 were purchased after BH Contractors was awarded the window replacement contract, the lawsuit says.
Varsha Patel, Dipesh Pital’s spouse, has acquired 11 properties valued at $4.2 million since 1996, the claim contends.
Soni has acquired 43 properties since 2011 valued at $14.5 million, many owned by numbered Ontario companies, the lawsuit says.
The lawsuit includes a list of “suspicious property holdings” consisting of 98 properties in London and outside the city bought by people and companies named in the claim.
“The defendants have applied funds they derived from the fraudulent scheme . . . to purchase and pay down the mortgages and/or other charges on a large number of properties. As such, LHSC is entitled to a constructive trust over these properties,” the lawsuit said.
A constructive trust is a remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights.
Dipesh Patel was fired from LHSC in 2024 when he held the title of executive, capital redevelopment and environmental operations. He was earning an annual salary of $326,423, according to a provincial list of public sector salaries above $100,000.
LHSC initially told Patel he would receive 12 months of severance but ceased making the payments in February 2025, the lawsuit says.
The lawsuit alleges Lall, former director of facility management at LHSC who reported to Patel, was one of a number of individuals to whom Patel gave “off-the-record payments . . . without any legitimate reason.”
Lall was fired in 2023, the claim says.
Modi worked at LHSC from September 2014 to February 2025, the lawsuit says. Modi reported to Patel when he was hired in 2014, the claim says. Modi was fired in February 2025 for his involvement in the alleged “fraudulent scheme,” the lawsuit says.
Statements of claim and statements of defence include allegations not yet tested in court.
In an open letter to the community, LHSC supervisor David Musyj addressed the alleged frauds directly.
“I recognize this is a deeply disappointing moment. It’s not who we are at LHSC and it’s not a reflection of our team . . . . They are great people and provide great care, and I can tell you that each one of them is committed to our shared organizational value of accountability,” he said.
“As we look ahead, we are . . . strengthening our governance, operations, policies, procedures, and financial practices through the work of our recent organizational review and executive restructuring.”
The hospital has posted links to the statements of claim on its website.
The lawsuits are the latest development in what has been a tumultuous few years for LHSC. Musyj has been at LHSC since May 2024 when he was appointed by the province as supervisor. Schleifer Taylor, who had been chief executive since 2021, went on a medical leave of absence in November 2023 and the hospital announced in June 2024 she was no longer employed there.
The board of directors announced her departure as the hospital wrestled with a rising deficit and dealt with the fallout of two trips by senior executives and staff and a planned third trip costing more than $470,000.
In June 2024 the hospital reported its deficit will nearly double in one year, to $150 million in 2025 from $78.1 million in 2024.
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All members of the LHSC board of directors resigned in September 2024. The following month, LHSC announced London police were launching a fraud investigation into the hospital’s “past financial practices.”
London police released a statement Wednesday by Chief Thai Truong about the investigation.
“London Police Service continues to actively investigate allegations of fraud involving London Health Sciences Centre. We fully recognize and appreciate the significant public interest in this matter, as it involves an important institution within our community,” he said.
“Our financial crime unit is dedicated to conducting a thorough, fair, and meticulous investigation, understanding that complex financial crime cases often require substantial time and resources to reach completion.”
LHSC explained its rationale for seeking damages and redress in the $50-million lawsuit filed Wednesday.
“LHSC supports the health and welfare of the community it serves. Condoning and ignoring the defrauding of this organization, in particular, merits an award of punitive and aggravated damages,” the claim says.
“In addition, the conduct and activities of the defendants represent a deliberate, high-handed and wanton denial and frustration of the rights of LHSC and were calculated to injure LHSC to the benefit of the defendants. As such, the actions merit an award of punitive, exemplary and/or aggravated damages.”
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The claim in the $10-million action states the damages are for “breach of fiduciary duty, negligence, negligent misrepresentation, breach of contract, and wilful misconduct in an amount to be finally determined but presently estimated to be in the range of $10 million.”
Essentially, the lawsuit filed June 13 in Ontario Superior Court alleges the three former executives named were aware of the alleged fraud and did not stop it.
“Beginning in or around April 2022, the defendants, alone or in concert with each other and/or third parties, condoned and/or intentionally ignored evidence that a fraud may be being perpetrated against LHSC,” the claim says.
“In addition to being negligent and a breach of their various duties as fiduciaries of LHSC, the actions of the individuals were in breach of each of their employment agreements, including the code of conduct and the standards to which they agreed to be bound. This behaviour also constituted wilful misconduct on the part of each of the individuals.”
In April 2022, Schleifer Taylor was notified by a human resources executive that “three witnesses raised concerns regarding potentially fraudulent behaviour in facilities procurement and construction contracting practices,” the claim says.
The discovery was made during a workplace harassment investigation, the lawsuit says.
Schleifer Taylor directed human resources to notify Campbell, but the two “failed to notify LHSC’s internal audit department” and the hospital board of “concerns regarding fraudulent behaviour in facilities procurement and construction contracting practices,” the claim says.
Schleifer Taylor and Campbell also did not notify LHSC’s external auditors, Ernst & Young, and then permitted those suspected of wrongdoing to “lead an engagement with PricewaterhouseCoopers into the review of rising construction costs, resulting in a 2023 report that failed to address or even acknowledge the existence of the allegations,” the lawsuit says.
Further, in May 2022 Schleifer Taylor signed an LHSC annual representation letter without making any mention of the allegations and stated she had “disclosed all instances of identified or suspected non-compliance with laws and regulations, including fraud,” the claim says.
In December 2022, Abhijeet (Abhi) Mukherjee was also provided with a copy of the report and also failed to act, the lawsuit says.
Mukherjee was hired in September 2022 as chief financial officer and fired in August 2024, the lawsuit says.
Schleifer Taylor was hired in 2015 and named chief executive in 2021. Her employment ended in June 2024.
Campbell was hired in July 2022 as corporate hospital administrative executive. He was fired in August 2024, the claim says. Before being hired, he worked for LHSC for six years as a consultant through Corpus Sanchez International Consultancy Inc.
The claim also states Corpus Sanchez breached its contractual duties and obligations.
The 2025-26 operating budget for London Health Sciences Centre is $1.6 billion, up from about $1.5 billion the previous year. One of Canada’s largest acute-care teaching hospitals, LHSC operates three hospitals and has more than 15,000 staff.
