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Suit: Contractors Overbill Hospital $4.2M

Thursday, April 28, 2016

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A Montreal hospital has accused a construction contractor, his associates and former hospital employees of participating in a decade-long scheme to overbill the hospital by millions of dollars.

The Jewish General Hospital alleges that principal contractor Gilbert Leizerovici, his brother Alain Leizerovici and associate Anton Iancu, along with their companies, fraudulently charged the hospital more than $4.2 million for renovation work that was never completed or for work that was actually done at other properties, CBC News reports.

The lawsuit was reportedly filed in Quebec Superior Court earlier this month.

Separately, Leizerovici, the owner of Rénov-Action Inc., has been criminally charged with tax fraud in connection with his work at the hospital. If convicted, he faces $310,000 in fines and a jail sentence of up to two years, the Montreal Gazette reported.

Leizerovici has denied those allegations.

Fraud Scheme Alleged

Between 2004 and 2013, Jewish General claims that the parties colluded with hospital employees, paying bribes to submit false invoices and overbill the hospital.

For example, the hospital says it was billed for renovations performed on a nearby property co-owned by Leizerovici and Kotiel Berdugo, the former director for the hospital’s technical services department. Berdugo was also named in the suit.

The property was said to have been purchased for $780,000 in 2008 and flipped for approximately $1.5 million just over two years later. The suit claims “at least some of the value must necessarily have come from the renovations carried out at the hospital's expense and without its knowledge,” CBC News reported.

Home Painting Charged to Hospital

The hospital was also billed for painting projects and demolition work at residential properties owned by Berdugo and Leizerovici, according to the report, citing the court documents.

Two other former hospital workers—Jeffrey Fields, a former consultant and project manager, and Phillippe Castiel, the hospital’s director of planning and real estate development—were said to have received cash bribes or “free” renovations for themselves or their friends.

Invoice Submitted by Vacationing Worker

The hospital also claims that the contractors would submit false invoices for work that was never done, but that was signed off on by Fields.

invoice
© iStock.com / travellinglight

An employee was permitted to submit fake invoices totaling nearly $3,500 while he was vacationing in Chile, according to CBC News, citing the court filing.

Fields allegedly accepted payments of $50 per day to allow workers to submit false time sheets, the report said.  One instance cited by CBC News involved allegations that an employee for Rénov-Action was permitted to submit fake invoices totaling nearly $3,500 while he was vacationing in Chile.

The hospital is seeking reimbursement in the matter as well as moral and punitive damages totaling $300,000, the report related.

Founded in 1934, the Jewish General Hospital treats more than 23,000 patients a year in its 637-bed facility.

   

Tagged categories: Billings; Business matters; Contractors; Ethics; General contractors; Health Care/Hospitals; Maintenance + Renovation; North America; Renovation

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