LHSC files $60 million lawsuit for alleged fraud

LONDON, Ont. — 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.

According to the London Free Press, the civil lawsuits filed in Ontario Superior Court, one in June and the other earlier this month, 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.

The suit alleges that a few individuals pocketed the cash and used 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.

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.

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.