Jewish General Hospital sues former contractors for alleged $4.22M overbilling
Suit alleges false invoices, cash kickbacks, renovations at hospital employees' homes billed to Jewish General
A Montreal construction contractor and associates are accused of colluding with three former hospital employees to overbill the Jewish General hospital by more than $4.2 million, in a lawsuit filed in Quebec Superior Court by the hospital late last week.
The hospital alleges that Gilbert Leizerovici, two associates and their companies charged the hospital for thousands of hours of work they never did — or for work that was actually done on properties owned by Leizerovici and several former hospital employees also named in the suit.
The overbilling allegedly took place over nearly a decade, between 2004 and 2013.
Leizerovici is already facing dozens of tax fraud charges after an investigation into the construction industry by Quebec's anti-corruption unit (UPAC) and Revenu Quebec.
Also named is Leizerovici's company Rénov-Action and two other companies that were also hired by the hospital for renovation work: Installetout, registered to his brother, Alain Leizerovici, and Solutions Eco Services, registered to Anton Iancu.
Both men are also named in the suit.
The hospital alleges that, in practice, Gilbert Leizerovici ran all three companies.
Lawsuit alleges hospital charged for home renos
The hospital claims three former hospital employees benefited from the alleged scheme through cash bribes or free renovations for themselves and their friends.
Kotiel Berdugo, the former director of the hospital's technical services department, Jeffrey Fields, a former consultant and project manager, and Philippe Castiel, a former director of planning and real estate development, are all named in the suit.
The suit claims Berdugo and Leizerovici used Rénov-Action employees to renovate a property they co-owned near the hospital.
"Even more galling, the hospital was then invoiced for this work on the express instructions of Mr. Leizerovici," the lawsuit reads.
The suit states that the property was bought for $780,000 in 2008 and flipped for approximately $1.5 million just over two years later, and it 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."
Among multiple other allegations, the hospital claims Eco Services billed the hospital for work it did painting Berdugo's own home and his parents' home, as well as other properties owned by Berdugo, Fields and others.
"On another occasion, Mr. Fields instructed workers to install a carpet at a bar owned by a friend of his," the lawsuit alleges.
According to the suit, Rénov-Action also installed ceramics and hardwood floors and did demolition work at a property owned by Castiel in July 2012 — renovations Castiel claims to have paid for in full.
However, the Jewish General claims Rénov-Action still billed the hospital
Leizerovici is also alleged to have charged the hospital for painting work done at his own condominium.
Worker paid while on holiday in Chile
The hospital alleges the three companies would also submit false invoices for work that was never done at all, approved by Leizerovici and rubber-stamped by Fields.
For example, the hospital cites a finding by the Quebec Construction Commission that Rénov-Action billed the hospital for 22,850 hours of work between January 2011 and December 2012, but time sheets from that same period showed only 16,400.5 hours.
Fields is alleged to have accepted payments of $50 a day to allow workers to submit false time sheets. In one case in 2008, the hospital alleges a employee for Rénov-Action was allowed to submit fake invoices totalling nearly $3,500, while he was on a four-week vacation to Chile.
The Jewish General Hospital is demanding the contractors reimburse $4.22 million dollars. In addition, it's seeking moral and punitive damages totalling $300,000.