The TTC has fired 12 employees and some 600 others are being investigated in connection with a benefits scam that could cost the city over $5 million.

TTC spokesman Brad Ross told CBC News that nine non-union employees and three unionized workers have been let go. Ross added that even though they're being investigated, not all of the 600 employees did anything wrong. 

Earlier this summer, Toronto police announced the owner of Healthy Fit, an orthotics store, and two of his employees were facing fraud and money-laundering charges in connection with a fraud involving TTC employees.

Police alleged the store prepared fraudulent billing for devices that were never received. TTC Andy Byford said once the employees were reimbursed, they would split the money with the business.

In her 2015 fraud report, the city's Auditor General Beverly Romeo-Beehler said the total benefits paid out to the service provider was $5.1 million — though the city considers this a "potential exposure" at this point, not lost money.

The city agency is investigating more than 600 employees that submitted claims to the organization, Romeo-Beehler's report said, adding it's still unclear how many claims are improper.

The report said the city agency's Benefits Administrator led the investigation into the third party service provider and the matter was referred to the Toronto Police Service for investigation.

The Auditor General will now audit the management of health and dental claims in 2016.

City lost more than 200K last year: AG report

Romeo-Beehler's 2015 report suggests the city lost some $209,000 last year to fraud cases, though that number could go up. There was also $77,000 in potential losses had the fraud not been detected, the report said.

In total, 572 calls were placed to the city's fraud and waste hotline including some that contained multiple complaints.

Romeo-Beehler said there were around 800 fraud allegations in all and nearly one in four that was investigated was substantiated to a degree.

In 25 instances, workers were disciplined. In 30 cases, workers were given training.

Romeo-Beehler's report does note that there was a 17 per cent decrease in the number of hotline complaints this year compared to 2014.