These extracts are from articles which are copyright. They are supplied for fair educational and political purposes only and should not be reproduced commercially.
Many of the early articles covered a broad scope and only those sections directly relevant to King's health centre have been included. The articles about the fraud are sometimes repetitive or very speculative and these sections have been removed.
1. Health care cuts spell
p-r-o-f-i-t for doctors
The Toronto Star March 25, 1995, Saturday, FINAL EDITION
Copyright 1995 Toronto Star Newspapers, Ltd.
BYLINE: THOMAS WALKOM TORONTO STAR
COMMENT:- The Medicare which Canadian citizens secured many years ago after a bitter battle is very different to the US and even the Australian systems. While it pays fee for service it does so to government and not to for profit facilities. This 1995 article describes the manner in which Canadian politicians have set out to dismantle medicare behind the public's back and to introduce private for profit medicine and corporate providers into the system. If Canada is to meet WTO requirements then they have a long way to go and will face more resistance than in Australia. The new planned King's Medical Centre in Toronto was seen to be leading this change.
MANY CANADIANS are unnerved by the gradual dismantling of medicare.
True, federal and provincial government cutbacks will eventually starve the medicare system until it becomes nearly impossible to get anything done at a public hospital
But look on the bright side. Look at the private sector opportunities.
Consider, for instance, the salutary case of the Kings Hospital Corp. -- or, as it is now known, the Kings Health Centre.
The Kings Health Centre does not yet exist. It is still an entrepreneurial gleam in the eye -- although, according to vice-president Scott Addison, this "exciting concept" could take off in a month or two.
Like many other would-be private health companies, Kings is based in large part on the premise that governments are pulling out of medicare.
Right now, it is hard for a single company to make millions doing for-profit medicine in Canada. Thats because, by law, all medically necessary procedures must come under medicare.
But frightened by rising deficits, provincial governments have started to trim medicare.
But for those with entrepreneurial zest, all of this bad news is potential profit.
A 1993 prospectus put out by Kings predicts that each doctor associated with the clinic "should be able to bill from $ 800,000 to $ 1 million per annum" and that "total revenues should exceed $ 48 million annually."
In its 1993 prospectus, Kings announced that it had acquired "the only available acute care private hospital licence in Ontario" and was preparing to open a "revitalized hospital" in downtown Toronto to do "patient -- pay" medicine.
Procedures that would be offered, the brochure said, included plastic surgery, "executive medical programs," prostate microwave treatment and breast examinations.
Later, Kings president Ron Koval would say the 1993 prospectus was never intended to be made public. But it did make its way to, among others, the Ministry of Health.
In early 1994, ministry lawyers wrote Kings a stiff letter informing it that:
* Hospitals are not allowed to advertise.
* Hospital licences cannot be transferred without government approval.
* The government had not approved any such transfer.
* Kings had better stop calling itself a hospital.
"They did us a favor," Addison now says. " Health centre is a much more 90s title."
As a health centre, he said, it wont even need a government licence.
Addison says operations like Kings represent the future.
Given what governments are doing, he may well be right.
2. Albertans still getting
The Toronto Star April 20, 1996, Saturday, FINAL EDITION
Copyright 1996 Toronto Star Newspapers, Ltd.
COMMENT:- This is a denial by the Health Minister in Alberta to a previous report.
In his April 7 column, Star columnist Richard Gwyn portrays health reform in Alberta as a "battle" between the defenders of a crumbling publicly funded health system, and a government bent on privatization at any cost.
So far from being in crisis, our health system is providing more services to Albertans today than ever before, with fewer hospital beds.
A few of the regional hospital authorities have indeed discussed the concept with a private company called Hotel de Health. So far, the discussions have concerned only services that are outside the scope of medicare, which have always been marketed privately.
If indeed Premier Ralph Klein referred to the idea of a future private clinic as "Mayo North," as Gwyn suggests, he might have been thinking of The Kings Health Centre in Toronto, a private facility affiliated with the Mayo Clinic. That facility has been marketing non-insured services to individuals and corporate health plans for some time, apparently without upsetting Gwyn.
Shirley McClellan, Minister
Where money heals all; The old
Bank of Canada building is now a plush private health centre Some
fear its a bad sign for medicare
The Toronto Star June 8, 1996, Saturday, FINAL EDITION
Copyright 1996 Toronto Star Newspapers, Ltd.
BYLINE: BY JOHN SPEARS TORONTO STAR
COMMENT:- This article describes what Kings is doing and uses quotes from different people to debate the issue
From money to medicine: A modest office building on University Avenue has undergone a transformation that, to some, heralds vast changes in our health care system.
The eight -- storey office building on University Ave. used to house the Bank of Canada.
Now, its home to Torontos newest medical institution: The privately owned and operated Kings Health Centre.
While Ontarios hospital system is shrinking, Kings is visibly expanding.
They wont stay overnight. Legally, Kings is not a hospital. But Kings critics worry its the first step toward a two-tier health care system, with special privileges for the wealthy.
Kings once had plans -- now shelved -- to obtain a hospital licence.
Kings is gearing up for cosmetic plastic surgery and fertility therapy.
It will offer a wide range of medical services to foreigners living in Canada who are not covered by OHIP.
It hopes to market specialized services, such as arthroscopic knee surgery, to U.S. residents or others not covered by OHIP.
But its also pushing at some of the edges of the public health care system.
Kings would, for example, like to get into magnetic resonance imaging -- which by law is available only in public hospitals.
It will also shrink enlarged prostate glands using microwaves. Its an alternative to surgery that gets patients back to work in days, not weeks, says Kings. OHIP does not cover the procedure.
And Kings houses a group of general practitioners carrying on regular OHIP practice. Kings takes 40 per cent of their OHIP fees to cover overhead.
That indirect OHIP funding has given Kings a boost.
"Its allowed us to start the engine of the Kings Health Centre and get that critical mass in terms of revenue," says Scott Addison, Kings senior vice-president.
"Its the thin edge of the wedge," says Dr. Carolyn Bennett, who practices family medicine and is affiliated with Womans College Hospital.
"Im worried that this is the beginning of a trend that I dont like.
"Even if it is perfect right now, it is the beginning of the dismantling of our health care system."
Health care may even evolve to the point where the public system covers only traumatic or catastrophic care, he adds -- in which case there will be more need for private health care than ever.
Capital should not be a problem for Kings, however. The only identified partner in Kings is Ron Koval, who is also executive vice-president of Bankers Acceptance Capital Corp. Bankers specializes in medical financing -- and shares space in the Kings building.
Money is much in evidence at Kings.
Public areas are richly appointed. The whole operation will be nearly paperless. Medical records will be kept electronically; terminals are scattered everywhere.
Insurers also like the Kings management approach, he says. Kings is plugged into the Mayo Clinics strict treatment guidelines, which show what procedures yield the best results at the least cost.
Kings doctors must work within the Mayo practice guidelines, which are constantly being refined according to clinical results.
Having medical specialists, physiotherapists and psychologists all working together under the same roof means Kings can co -- ordinate treatment programs, says Addison. That gets patients back to health, and back on the job, all the sooner.
As for doctors, it provides them with a second, private source of income, to supplement the limited pool of money available from OHIP billings.
Bennett says looking for market niches and offering specialized services is the wrong way to go about building a health care system.
"It takes everything out of context," she said. "Good medicine takes into consideration community care, home care, mental health and social determinants of health: Things like poverty and violence. You have to have a system that deals with these things and where they lie."
Private clinics also tend to skim off easier treatments, she added -- leaving the public system saddled with complex, expensive treatment.
She also worries about whether patients will be well represented.
Medical knowledge belongs to citizens and is held in trust by doctors for the benefit of society, he said.
"If all a doctor does is use that knowledge, owned by the citizens, to go into the private system of non-insured services, then I think citizens have the right to complain. Its a very poor investment for the money they put in to educate that doctor."
Profiting from health care cuts:
a growing number of Americans are paying for treatment in
Macleans August 19, 1996
Copyright 1996 Maclean Hunter (Canada)
BYLINE: Harris, Jonathan
COMMENT:- This article describes the way Americans are coming to private hospitals in Canada where they get cheaper surgery. Most of the article is about Cardston Hospital and about other attempts to tap the US health care marketplace.
A growing number of Americans are paying for treatment in Canada
--- administrative costs and much lower doctors salaries, Cardston cashed in on a medical procedure in short supply in the United States.
Meanwhile in Toronto, an all -- private clinic is energetically courting American customers for a range of medical services. Handsomely furnished with navy -- blue carpeting and framed prints of Americas Cup yacht races, the seven -- month -- old Kings Health Centre is located within sight of three large teaching hospitals. The centre boasts an affiliation with the world -- renowned Mayo Clinic in Rochester, Minn., and the ability to attract a roster of more than 100 doctors from some of Canadas most prestigious health facilities. It is not aimed exclusively at U.S. traffic: Canadians may buy reproductive therapy, physiotherapy sessions and other services not covered by provincial medicare benefits, but they are prohibited from paying the private clinic for services -- such as cardiac surgery -- which are covered by medicare. No such limits restrict what American patients can receive however, and for them, the Canadian facility represents a bargain -- basement of low -- cost medical services. "There is such a disparity in prices and fees between the United States and Canada," says Scott Addison, Kings senior vice-president of marketing, "that we have a tremendous opportunity to provide quality -- driven services which I dont think the Americans can compete against." Addison expects that, when fully operational early next year, the clinic will attract 3,000 patients a day from Canada and the United States, with Americans providing about 25 per cent of revenues.
It is a formula that could lead to unprecedented integration of Canadian and American health care. To attract patients on the scale that it seeks, Kings is negotiating with U.S. insurance companies and health maintenance organizations -- which provide health care to subscribers for a fee -- to offer medical services to their customers at a fraction of U.S. costs. Arthroscopic knee surgery, for instance, can cost up to $ 20,000 in the United States. Kings, according to its marketing senior vice-president, "will probably be able to do this surgery -- all costs included, with transportation and a room at the Hilton -- for about a third of that." Meanwhile, Kings plans to refer queuing Canadian patients who can afford immediate private American care to prominent U.S. centres like the Mayo Clinic.
The push to attract U.S. patients comes at a time of growing alarm over the state of Canadas health care system. As provincial governments try to rein in health -- care budgets, the number of hospital beds across Canada has fallen by more than 6,000, to 155,676 since 1993. Meanwhile, administrators in some provinces have slashed operating -- room capacity and several provincial governments have imposed caps on doctors salaries. Amid the prevailing climate of retrenchment, offering medical services for a price to foreign patients holds the strong appeal of providing a potential new source of sorely needed revenue. But the idea has its detractors, who worry that serving Americans for a fee will dilute the free care given to Canadians.
The privates progress: the
role of business in health care is growing; Special Report: Radical
Surgery; Cover Story
Macleans December 2, 1996
Copyright 1996 Maclean Hunter (Canada)
BYLINE: Fennell, Tom
COMMENT:- This article reviews the downgrading of medicare and the opportunities seen and seized by entrepreneurs. Ron Koval and Kings Health Centre is at the centre of this.
The role of business in health care is growing
For Canadian Medical Association president Judith Kazimirski, Murphys case underscores a growing problem. As lineups for treatment grow in the cash -- strapped medicare system, more companies are opting to care for their clients in independent facilities. And Kazimirski says that trend is just another example of how the private sector is expanding its role in the health care system with little public debate. "We are allowing passive private medicine to move in," argues Kazimirski, "in an unregulated and unplanned way."
The privatization of Canadas health care system is gaining momentum. Since 1975, the portion of care purchased from private business has climbed above 28 per cent from under 24 per cent. Bill Wilkerson, president of Toronto-based Liberty Health, a branch of the Liberty Mutual Group of Companies of Boston, expects the private share of health care spending to surge rapidly to almost half the total as governments pare down the medical procedures covered by medicare and hospitals outsource many of their services.
Other investors are going further. In January, a group of private investors opened a luxury clinic called Kings Health Centre in downtown Toronto and they hope to attract a largely American clientele by offering surgery and other treatments at costs below those in the United States. (Canadians would be allowed to buy reproductive therapy and physiotherapy sessions and other treatments not covered by medicare.)
KINGS RANSOM SEEN IN PRIVATE HEALTH
CARE: Canadas biggest private facility expects its services to
turn a profit next year
The Financial Post April 2, 1997, Wednesday, DAILY EDITION
Copyright 1997 Financial Post Ltd.
BYLINE: ZENA OLIJNYK
COMMENT:- Kings Health Centre is now the largest and most impressive private facility in Canada - showing the way. This article is all about it.
The marble foyer of the Kings Health Centre in downtown Toronto suggests much more than a charity ward. So do the plush, renovated offices of what was once the Bank of Canada building but is now Canadas largest and most luxurious private health care facility.
The one-year-old Kings does offer publicly funded health care services. But what makes it unique in Canada is that it has also grouped together a number of non-insured medical services and is aggressively marketing them to Canadians and foreigners.
Among the potentially profitable services are nutritional therapy and non-invasive laser prostate surgery. Kings also hopes to gain a toehold in physical rehabilitation and injury management, an area thats paid for by insurance companies or employers.
Ron Koval, Kings 46-year-old founder and chairman of administration, boldy compares the centre to the renowned Mayo Clinic in Rochester, Minn. Mayo Clinic officials, he says, acted as consultants on the architecture, office design and delivery of services at Kings.
"There are other private medical centres in Canada, but none are as large or as comprehensive as we are," says Koval.
Kings, he says, will expand into other cities, possibly including Hamilton, Ottawa, London and Thunder Bay. Before that happens, there will be an initial public share offering under the name Kings Health Centre Corp., likely in the next few months.
Doug Quirt, Kings 48-year-old president, says the IPO should likely be ready this summer and certainly by the fall.
"It seems to take forever running through the various drafts of the prospectus," he says. "What were trying to do is hit our best market price through good timing."
Koval and Quirt wont disclose who the initial investors are or how much money theyve put into Kings until a prospectus is issued.
But they predict the centre will be profitable some time in 1998.
Kings 40 or so services cover everything from trendy disorders -- a sleep laboratory investigates problems like sleep apnea and insomnia -- to the needs of hard core hypochondriacs who could undergo a platinum-class $ 1,595 medical exam that includes 15 different medical tests over a five-hour session.
"It never ceases to amaze me how much Canadians are willing to spend on their health and lifestyle if the service is right," Koval says.
By right, he means efficient and that means offering Cadillac services at the lowest possible cost. An example is excimer eye laser surgery, a corrective procedure for nearsightedness that the centre hopes to soon introduce. "Right now most clinics offering this procedure charge more than $ 2,000 per eye, but when we bring it in, well probably charge about $ 1,200 per eye," says Koval.
Another key area for Kings is getting "third-party payers" such as insurance companies or employers involved in what Koval describes as "new methods of disability management." These payers are often more than willing to pay directly for diagnostic tests and treatments, he says, if it means getting the insured employee off disability leave sooner.
Koval says one of the reasons for Kings expansion to satellite sites is to tap into business from third-party payers arising from injured workers in cities such as Hamilton with its steel industry, or London with its surrounding auto industry.
Michael Guest, a principal of Sobeco Ernst & Young who helped introduce Kings "third-party" business lines, says "the basic idea . . . is that the sooner a worker resumes some of his or her normal functions, the better for everyone. The patient gets diagnosed and hopefully better faster, while the insurance company doesnt have to pay weeks of disability cheques waiting for test results."
Kings promises to complete independent medical exams referred by third parties within a couple of weeks rather than the more typical period of a few months. Guest also says the centre uses a disability assessment program developed by the Mayo Clinic that tries to "determine where a patient should be in the rehabilitation process based on factors such as extent of injury and age."
Kings also hopes to win foreign customers, especially Americans who want to avoid the high cost of the same procedures in their own country.
"Why pay thousands of dollars for something like knee surgery when you could get it here for far less," says Koval. He says orders have already been placed for two dialysis machines aimed at foreign travellers passing through Toronto.
While the services offered are all done on an out -- patient basis, Kings does have an arrangement with a nearby hotel to accommodate clients.
The health centre is also a good deal for doctors, such as Financial Post contributor Dr. Kenneth Walker (a.k.a. Dr. Gifford Jones), who set up their practices there. They pay 40% of their gross revenue in return for not having to deal with any issues surrounding the business end of the practice.
"What were trying to do is establish ourselves as a centre of medical excellence where doctors can concentrate on their profession, not the business," says Kings chief medical director, Dr. Ron Porter. He says his own costs declined 12% after he joined the centre.
There are critics of the centres concept. Dr. Philip Berger, assistant professor of medicine at the University of Toronto and head of family and community medicine at Torontos Wellesley Hospital, says the centres premise is based on the belief "that a substantial number of services that are part of the present health care system will be delisted.
"I just dont know if that is going to happen, given how much Canadians love the public health care system we have."
Berger is also concerned about expensive "frill" services such as executive physicals, which he calls "junk medicine" because studies have concluded annual physicals dont necessarily contribute to better health.
"Its a knee-jerk reaction to say Kings is a threat to the national health care system," he says.
"I just want to know why people would spend so much money on things that dont necessarily have medical value."
Potential investors, lacking any experience of such a large and comprehensive private facility, will find themselves asking much the same question.
One industry insider who has studied the investment potential of health care facilities like Kings says that while it still has a long way to go, "Kings generally has all the elements right.
"From what I can see, Kings is pretty well on target when it comes to its business plan," he says.
He adds that the high -- profile Cadillac health and lifestyle programs will likely always remain a "relatively small" part of Kings business, although "there are a growing number of people who are willing to pay extra for better health."
But more important to Kings continued good health is business from the third-party paid services. "The more people signed up in this area, the better for Kings," he says. "Thats where the potential for good money lies."
Kings expansion into other cities "has to be done right," he adds.
"There probably is enough interest to expand into these areas, but its probably smarter for those behind Kings to take their time."
Better prostate therapy
The Financial Post April 26, 1997, Saturday, WEEKLY EDITION
BYLINE: DR. W. GIFFORD -- JONES
COMMENT:-This article is all about the Prostatron microwave treatment at Kings Hospital - a treatment not available under medicare. Elaborate claims are made and it is claimed to be virtually complication free.
Being a surgeon, the last thing Id choose is an operation if it could be avoided. Fortunately, a new machine, the Prostatron, delivers transurethral microwave therapy (TUMT) to the prostate gland -- and the chance it would save me from my the scalpel.
Dr. Michael Robinette, associate professor of urology at the University of Toronto and a consultant at Kings Health Centre in Toronto, has helped to pioneer the technique.
More information on the procedure is available from Kings Health Centre, 250 University Ave., Toronto, Ont., M5H 3E5.
Health: OPENING DOORS: A tangled
feud over health-care services
Service Copyright 1997 Infonautics Corporation. All Rights Reserved.
Dale Eisler with Jonathan Harris,
COMMENT:- This article is mostly about Premiere Klein's plan to lease a closed public hospital to a Private Medical Corporation and then claim that it is not being run as a hospital. Klein used King's as an example.
For Klein, however, the issue is one of regional fairness. In his letter to Chretien, the Alberta premier complains that "similar health-care facilities are currently operating without a word of protest from your government."
But the Kings facility that Klein cited is not quite the same thing. Operating since last June in downtown Toronto, it offers a range of insured and non-insured services, but no in-patient acute-care services. At least one person acquainted with the facilitys founding says the plan initially was to offer user-pay medical service not covered under provincial health-care plans. Michael Guest, a consultant, says that Ron Koval, Kings chairman, was interested in operating Kings as a private hospital. Guest says: "Kovals first reaction was, Holy cow! We could buy this [private hospital] licence and operate a medical centre on a non-[medicare], fee-for-service basis providing a combination of services. " But fearing that the acquisition of a private hospital licence could hamper the operation of the centre, Kings dropped the original plan.
Now, Greg Koval, Kings senior vice-president and Ron Kovals brother, refers to the facility as simply a consolidation of services available throughout the system. "I think Kings sees itself philosophically as not a private facility at all," he says, "but a high quality group practice that offers [insured] services as well as non-insured services."
Still, critics of the Toronto and Calgary projects see them as a creeping Americanization of health care. "Open the door to private medicine and youve started down the road to destroying the public system," says Elizabeth Reid of Edmonton, spokeswoman for a group called Friends of Medicare. Any private hospital will divert people and resources from medicare, notes University of Alberta health economist Richard Plain. "Inevitably, that hurts the public system," says Plain. Whether it harms or enhances medicare, the controversial Calgary medical centre will ensure that the health-care debate rages on.
Elite health centre's co-founder
Globe & Mail Wednesday, October 18, 2000
COLIN FREEZE AND KRISTA FOSS
TORONTO -- The co-founder of an upscale privately run health-care centre in Toronto has disappeared with his wife.
Ron Koval's mysterious departure from King's Health Centre left the staff in a state of shock yesterday.
Gregory Koval, the brother of the missing man and a founding member of the centre, helped deliver the news of the disappearance of the centre's co-founder, a clinic doctor said.
According to Dr. Walker, the staff were told that police would arrive at the centre today to start looking into the situation. "There were no implications that money was involved," he said. "But it would appear that things were shaky."
Dr. Walker said there were no signs of financial trouble at the centre, that renovations were constantly being done and that there was a sense of healthy activity. Staff were told at the meeting that Mr. Koval had put the money into the business, he said.
A 1997 article in the Canadian Medical Association Journal describes King's as "the brainchild of Ron Koval, a merchant banker, and a group of private investors." The same article states that doctors pay a flat rate of 40 per cent of gross billings to cover overhead, which is cheaper than the provincial average.
Another 1997 article, in a periodical called The Medical Post, describes Mr. Koval as a chairman of a capital corporation that lends money to public hospitals.
Investigators asked to find
missing man Financier who ran King's Health Centre disappeared on
weekend with wife
Globe & Mail Thursday, October 19, 2000
Fraud investigators have been asked to probe the mysterious weekend disappearance of a financier who helped found and bankroll a prestigious downtown health-care centre, worried staff at the centre were told yesterday.
Ron Koval, 49, and his wife, Loren, have not been heard from since Sunday when they bade farewell by telephone to their daughter Amy, 23.
"They said they wouldn't be able to see her for a long time," Mr. Koval's older brother and colleague, Gregory, recounted yesterday. As to Ron Koval's whereabouts, "Nobody knows where he is, that's the great mystery here. . . . I'm worried for their safety."
Ron Koval is chairman of both the King's Health Centre on University Avenue and Bankers Acceptance Capital Corp. Among other things, the enterprise bankrolls public hospitals through leasing arrangements and provided much of the financing for King's.
Kings is intended as a profit-making venture for Bankers, but after five years it has still not broken even.
Since its inception the centre has been operating at a loss, sources familiar with operations said. But the shortfall had steadily been shrinking, and recently, the mood at the centre had appeared optimistic.
The precise fiscal relationship between King's and Bankers remained a mystery, at least to Ron Koval's brother.
"King's was obviously financed by him, but how he did that I have no idea . . .," Gregory Koval said. "He kept that information to himself, and very few people were aware of what he did with the proceeds from Bankers."
Financier's books uncover
dubious dealings: police
Globe & Mail Saturday, October 21, 2000
TIMOTHY APPLEBY AND KRISTA FOSS
The small Toronto financial company at the heart of the King's Health Centre imbroglio appears to have been skirting the law for years, the detective heading the investigation alleged yesterday.
Accounting books at Bankers Acceptance Capital Corp., which bankrolled the upscale health centre until its two principal officers vanished last weekend, show "a company that started out legitimate and then turned very suspect in almost all of their dealings," fraud squad Detective Steven Burnham said, adding that dubious transactions go back at least two years.
"I can guarantee there'll be more complaints."
Arrest warrants have been issued for Bankers chairman Roman Michael Koval, who uses the first name Ron, and for his wife, Loren, executive vice-president of the nine-year enterprise.
The fugitive pair, aged 49 and 48 respectively, controlled the finances of both Bankers and King's.
Det. Burnham, who yesterday urged the Kovals to surrender, said he has "strong indications" of their whereabouts. They were spotted briefly in New York City on Sunday, and a television report last night said they were still there and had been staying at a Hilton hotel.
Both are sought on fraud charges, involving a preliminary total of between $9-million and $12-million.
The rest is owed to a giant Texas-based financial company, Associates First Capital, which allegedly advanced money to Bankers to buy three magnetic resonance imaging machines that were to have been leased to three Montreal hospitals.
The supposed deal was backed up by documents and signatures bearing the hospitals' letterhead.
Police say, however, that that paperwork was forged. The machines were never bought and the hospitals knew nothing of the leasing arrangements.
Documents reveal alleged fraud
at King's Health Shell company may have been used to divert funds to
Globe & Mail Tuesday, October 24, 2000
An alleged multimillion-dollar fraud involving Toronto's high-profile King's Health Centre became more tangled on two fronts yesterday.
Corporate documents show that Amy Koval, the 23-year-old daughter of two fugitive financiers who controlled King's finances is a director of a company believed to be a shell corporation allegedly used to divert funds.
Her boyfriend, John Grigg, is also named as a director.
Police said it is possible Amy Koval and Mr. Grigg did not know they were listed as directors of Crowndale-Richmond Corp.
Meanwhile, the principal victim of the alleged fraud, a giant U.S. corporation whose lending practices have attracted hundreds of lawsuits, is proving unhelpful to investigators.
Charged with fraud over $5,000, Ron and Loren Koval, aged 49 and 48, respectively, have been on the run since last weekend but are believed to be in North America.
That $10-million loss arose in connection with a deal to buy three magnetic- resonance-imaging machines that were to be leased to three Montreal hospitals.
The deal was signed with Associates in September and was expedited through phony documents and signatures, police allege, in an arrangement about which the three hospitals knew nothing.
But Associates, bought last month for $31-billion (U.S.) by the even-larger Citigroup, has been reticent about aiding the investigation, fraud squad Detective Steve Burnham yesterday.
"They have been helpful to a certain degree, then they stopped. They were going to get me a forensic report, and then all of a sudden they say no. They're not going to supply one. They don't want to spend any more money. Go figure."
Associates, which has refused comment on its loss, has been named in more than 700 lawsuits stemming chiefly from its lending practices, The New York Times reported on the weekend.
Bankers' now-deserted offices, housed in the same building as King's, were scoured yesterday by police with a search warrant.
Mr. and Mrs. Koval have not been heard from since Oct. 15, when they said goodbye to Amy in New York, where she is studying for a master's degree in criminal psychology at Columbia University.
Luxury-loving fugitives leave
Globe & Mail Wednesday, October 25, 2000
COLIN FREEZE and ANDREW MITROVICA With a report from Timothy Appleby in Cleveland
TORONTO -- An upscale Toronto health centre that mixed medicare-financed medicine with such cash services as executive-lifestyle management ended its corporate existence last night as the trail of its fugitive founders went cold in Cleveland.
Although individual doctors will continue to work in its University Avenue offices, King's Health Centre, which opened in 1996, was dissolved. The fate of its employees was unclear.
Ron and Loren Koval, a couple with a taste for black luxury cars, have been missing since the weekend before last. Undetermined amounts of money are missing from the health centre and a related Koval venture, Bankers Acceptance Capital Corp., that had offices in the same building.
Yesterday, police said the total of missing funds appears far greater than was first suspected. Detective Steve Burnham said he was "quite comfortable" with a preliminary estimate of $50-million. He said the figure "could go much higher."
With the man described as the brains and money behind it being sought by fraud investigators, King's died as a corporate entity. Its doctors, however, urged patients to continue visiting.
The Kovals have been accustomed to travelling in style. Among their collection of cars are:
a 1998 black, two-door Bentley, valued at more than $317,000.
a 1997 four-door, black Mercedes-Benz 450, with a ticket price of $150,000.
a black 1996 BMW, also priced at more than $100,000, with a vanity plate, 4AIM.
a 1996 pickup worth $41,000.
In total, the Kovals owned or were leasing-to-buy vehicles with a value of $600,000 and were carrying monthly payments on the cars of nearly $9,000.
In most cases, the debts were registered against Mr. Koval or his company, Bankers Acceptance, or both. Financial records as of early this year showed that payments were made on time. More recent records were not available yesterday.
The records also showed that Mr. Koval had taken out several loans, totalling $68,000. Again, regular payments were made.
Interpol looks for Toronto
Globe & Mail Thursday, October 26, 2000
ANDREW MITROVICA AND TIMOTHY APPLEBY
TORONTO and CLEVELAND -- The net has widened in the search for two fugitive financiers who are alleged to have defrauded millions of dollars from an upscale Toronto medical clinic.
The international police organization, Interpol, issued arrest warrants yesterday for Ron Koval and his wife, Loren.
The couple, who have been missing since last week, are charged with fraud over $5,000 in connection with the disappearance of as much as $50-million.
They are alleged to have absconded with at least $3-million from the King's Health Centre and $10-million from a Texas-based firm in connection with a deal to lease magnetic-resonance-imaging machines to three Montreal hospitals. In addition, $35-million is believed to have been defrauded from other investors.
Canada-wide arrest warrants for the Kovals, who are believed to be in the United States, were issued last week. Mr. Koval made a reservation at a luxury Cleveland hotel last week but never showed up. Law-enforcement sources said they now believe the couple are headed south.
Kovals were known as big
spenders But fugitive financiers were not as classy as their health
centre, health reporter KRISTA FOSS finds
Globe & Mail Saturday, October 28, 2000
Two years ago, Ron Koval sat in his clubby office in King's Health Centre across from Kenneth Walker.
It was a meeting Dr. Walker, a gynecologist, looks upon bitterly today.
"He told me then he'd made millions from leasing equipment to hospitals and he wanted to give something back to society," Dr. Walker recalled. "He said King's is what he was giving back -- a premiere health-care centre."
In the view of Dr. Walker and the authorities, if Mr. Koval contributed something to society he's collected on that contribution with usurious interest.
Mr. Koval and his wife Loren are international fugitives, wanted in connection with a $50-million fraud. Police have been pursuing them through several U.S. states and down the eastern seaboard.
Police said the pair may have moored their 15-metre boat, believed to be destined for Panama, which has no extradition treaty with Canada.
The boat was purchased and refitted in New York.
"Right now, I think they've gone to cover," Detective Steve Burnham said yesterday. "They could be holed up in some hotel room, paying by the day, not to leave a trail and just staying inside.
It was an end that King's staff and doctors, who originally believed themselves to be at the helm of a bold new experiment in health care, could not have foreseen. Instead, one doctor says, staff are quietly traumatized.
"It's very tragic, very painful," Norma Graham, King's senior vice-president of new business development, said yesterday. "The heart and soul has been ripped out of this place by two people."
For Canadians, reared on doctors offices and hospital clinics with drab paint, dog-eared copies of Reader's Digest and fluorescent lighting, King's represented the great "other" of health care -- the plush, pampered potential of private delivery.
There was heady talk in those early days. King's would be a Canadian version of the Mayo Clinic, the esteemed Rochester, Minn., hospital that pioneered cancer care in the United States. It would be a triumphant introduction of private medicine to socialized Canadian health care. It would be executive class and cater to Bay Street gentry and Canada's alpha achievers.
"It never ceases to amaze me how much Canadians are willing to spend on their health and lifestyle if the service is right," Ron Koval told the Financial Post in 1997.
But King's never hit its original targets. It never became Canada's first private hospital -- despite the ambition expressed in its 1993 prospectus. Consultants from the Mayo Clinic may have helped direct its look and range of services, but it never reached the stature of the U.S. institution.
In fact, King's ended up operating like a joint practice with some pretty spectacular frills. Much of its business was public, not private, health care. King's charged doctors between 40 per cent and 42 per cent of their total OHIP billings for rent and secretarial support.
Despite these revenue sources, King's reputedly never made a dime of profit -- and had lately bled red all over its balance sheet.
As it turns out, it is alleged that one of the main reasons King's never prospered was because Ron Koval and his wife, Loren, also had financial signing authority at the centre. They are accused of siphoning up to $3-million from the accounts at King's over its five-year operating history and defrauding other companies and investors for more than 10 times that amount.
Ron, 49, and Loren, 48, were high-school sweethearts. They celebrated their 25th wedding anniversary last year, renewed their marriage vows and then had a lavish party at Toronto's Old Mill.
They liked to travel to warm places, play golf, wear chunky jewellery and drive expensive black cars -- their current auto collection includes a $317,000 Bentley, a Mercedes, a BMW and a pickup, all of them black.
Still, the Kovals were never as polished as the health centre they bankrolled: Mr. Koval, a college dropout, is tall, edging toward obesity and, as one doctor put it, had a fashion sense that was a far cry from sartorial splendour. He smokes two to three packs of cigarettes a day and is so nervous he can't sit still through dinner, according to those who know him.
Loren -- a former nurse from Hamilton whose family ran a construction business -- is short, heavyset and known to love the computer trivia game at Tailgate Charlie's, a relaxed roadhouse in Waterdown, Ont.
Marjorie Bentley's husband worked for Banker's Acceptance Capital when it operated from a mansion in a residential area of Hamilton before it moved offices to King's Health about three years ago. According to the Hamilton woman, they were known to remunerate employees handsomely and take the entire staff out for dinner.
Health-clinic cheques lead to
Toronto Globe & Mail Wednesday, November 1, 2000
JOHN SAUNDERS, ANDREW MITROVICA and AND TIMOTHY APPLEBY
MIAMI, TORONTO and TORONTO -- In the financial towers of Miami's Brickell Avenue, where many of the hemisphere's banks have outposts, the only sign of St. Georges Bank and Trust Co. Ltd., is a 10th-floor suite that appears under the name St. Georges Investments.
But the four-room office may be an important link in the hunt for the more than $100-million alleged to have been stolen by fugitive financiers Ron and Loren Koval, now on the run for more than two weeks.
The first clues in the money trail involve only $150,000, begin in Toronto and reach Miami. The bank's connections extend to the tiny Caribbean island of Montserrat and Panama City, which Mr. Koval is known to have visited in March.
Toronto Detective Steven Burnham, the lead investigator pursuing the Kovals, said yesterday that, in June, an unnamed Toronto insurance company issued three cheques totalling $150,000 to the city's King's Health Centre.
Stamped on the back of each cheque, he said, were instructions to deposit the money "only to" an account in the name of King's Health Services Ltd. with St. Georges Bank, which is incorporated in Montserrat but does no business there. King's Health Services is the insurance arm of the health-care centre and is controlled by Ron and Loren Koval, among others.
The bank did not include its address on the cheques. Police were scurrying yesterday to locate and question its officials.
"We have never had the St. Georges bank come up before, this is the first lead we have where it [the money] might have gone," Det. Burnham said.
Police say that $3-million-plus allegedly stolen from King's is a fraction of the amount -- believed to be in excess of $100-million -- allegedly stolen from Canadian and U.S. investors.
Aside from any dealings with Barclays, sources say that over the past three months, the couple have withdrawn between $280,000 and $300,000 (Canadian) from a number of other banks that line downtown Miami's main financial strip.
The bulk of the missing $100-million, however, is alleged to have been stolen from a single institution that police will not yet identify.
The transactions were made under the auspices of Bankers Acceptance Capital Corp., a nine-year-old investment firm set up by the Kovals, who also controlled the main purse strings at King's.
Toronto Police still believe that the Kovals are headed to Panama by powerboat. The Globe spoke to a man at a Miami-area marina who believed he had seen the Kovals on a 50-foot yacht a few weeks ago.
The search for two fugitive Canadians has
led to Panama, a good place to lie low
??? Toronto Globe & Mail Thursday, November 2, 2000
It's the crossroads of a hemisphere, a city with a forest of skyscrapers that hold some of the Americas' darkest secrets.
For decades Panama City has made its living off free-wheeling commerce and finance. Now it's the focus of a search for fugitive Canadians Ron and Loren Koval, charged with fraud in the King's Medical Centre affair.
"We've got enough cities here, enough places where people can hide and sit out periods of time. And people forget here."
Money is the key to a smooth transition to Panama, the retired businessman said.
Toronto police say the Kovals, who are wanted in an alleged fraud believed to involve more than $100-million, visited Panama in March.
Panama and Canada have no extradition treaty. Ms. Diaz said she has asked her government what it would do if it received a request to arrest the Kovals from Canadian authorities, but has had no reply.
Koval trail leads fraud
investigators to the Caribbean Will seek help from joint Scotland
Yard, FBI task force
Toronto Star Staff Reporter Probably 2/11/2000
By Dale Anne Freed
Toronto police expect to contact a team of FBI and Scotland Yard agents based in Miami for help in pursuing the money trail left by fugitive financier Ron Koval and his wife, Loren.
Toronto police Detective Steve Burnham, of 52 Division's fraud unit, said he expects to talk with the Miami-based Caribbean Joint Task Force as soon as possible.
Physician in salary row sues fugitive
Former executive seeks $4.5-million
Toronto Globe & Mail Thursday, November 23, 2000
KRISTA FOSS With a report from Andrew Mitrovica
A former executive of the infamous and now insolvent King's Health Centre is suing fugitive financier Ron Koval and the centre's CEO for nearly $4.5-million because he didn't get all of a promised $750,000 salary.
Paul Tepperman, a physician who was hired to become King's vice-president of corporate health services in 1997, is asking for $3.75-million in damages because the centre failed to honour fully a raise that would have pumped his $425,000 annual base salary up to $750,000 two years ago.
He further alleges he's owed $731,250 in unpaid wages.
Dr. Tepperman's statement of claim was filed last week, at the same time many health professionals and administrative staff remaining at the beleaguered centre scrambled to find other places to work in the face of flagging re-organization efforts.
This latest court document suggests the former senior management team of the centre enjoyed generous salaries at the tony health centre despite chronic cash-flow problems.
King's had been losing $1.5-million a month when Ron and Loren Koval, who controlled the centre's parent company, disappeared in October, according to bankruptcy documents. They are accused of defrauding the centre and other creditors of nearly $100-million.
Dr. Tepperman's contract with King's included a "certain" commission salary on top of his base salary and reimbursements for all travel and business promotion expenses, including rental of a car with a $45,000 list value, according to his statement of claim.
The five-year contract also stipulated that his salary be reviewed yearly and adjusted upwardly based on the centre's overall performance. He was ultimately paid about $587,000 as a base salary.
Meanwhile, the Kovals are still eluding authorities and an investigation continues.
Detective Staff Sergeant Keith Messham heads the Ontario Provincial Police antirackets unit, which is examining whether doctors and administrators at the medical clinic defrauded the province's health insurance plan.
To date, investigators have unearthed no evidence that the province's health plan has been defrauded by physicians working at the centre.
Kovals plead guilty, describe growth of
greed :::: Stumbled on strategy to use health centre to bilk
National Post March 28, 2001
Chris Eby . . . . . National Post
Comment:- This report gives such a good account of Koval's behaviour and conduct that I have included the whole report
TORONTO - Disgraced health care financiers Ron and Loren Koval pleaded guilty yesterday to bilking investors out of nearly $93-million, which they used to keep their moribund luxury medical clinic afloat and support a lifestyle of flashy cars, yachts and expensive hotel suites.
The Kovals, high school sweethearts who have been married for 25 years, sat together and embraced in the prisoners dock. It was the first time they had been together since surrendering to Canadian authorities in late December after leading police on a chase that spanned the globe.
With a handful of family members seated behind them, including their 24-year-old daughter, Amy, both Ron, 50, and Loren, 49, stood and apologized to the financial institutions they fleeced and to the workers at the King's Heath Centre who lost their jobs when their fraud scheme collapsed.
"We've let them down and I know many of them are struggling now to get new jobs," Loren Koval said, reading from handwritten notes. Then turning to her family she became tearful and said, "to my family and my beautiful daughter Amy I am particularly sorry. They have forgiven me and now I need to be sentenced and start forgiving myself."
Ron Koval's voice trembled as he lamented the demise of the King's Health Centre.
"We had a dream to become the standard for private health care providers in this province and our dream was threatened," he said of the clinic, which was touted to be the Canada's version of the renowned Mayo Clinic in Rochester, Minn., when it opened in 1996, but instead lost about $25-million a year until it shut.
The Crown has asked for an eight-year prison term for both while the defence has requested a five-year sentence, arguing the victims in the case are wealthy financial institutions, not vulnerable citizens who lost their life savings.
In an agreed statement of facts, the court heard how the Kovals discovered -- by accident -- that they could obtain huge sums of money for high-end medical equipment that they never actually had to purchase or lease.
In October, 1994, the Canadian arm of Société Générale, France's largest private bank, advanced them about $850,000 to lease some equipment. However, the supplier backed out.
Instead of returning the money, the Kovals deposited the cheque into the accounts of their financing company, Banker's Acceptance Capital Corp. (BACC).
"The temptation was simply too great when that first $850,000 went into the Kovals' hands," said defence lawyer Marlys Edwardh.
The couple became bolder and began drafting more phony lease agreements, pouring the money into their fledgling health centre, which had among its patients many of Toronto's elite.
While the King's Health Centre sank further into the red, the couple boasted to family, friends and employees about the clinic's soaring profits. They looked the part, owning a home in Waterdown, Ont., and a mansion in Hamilton. Mostly, though, they lived in the Toronto Hilton, racking up bills of up to $8,000 a month.
There were also four high-end cars, including a $300,000 Bentley Arnage, cruises on a 14-metre Sea Ray yacht, lavish dinners with clients that included members of the Saudi royal family.
By July, 2000, the Kovals had forged nearly 49 lease contracts, bilking Société Générale out of $89-million.
When an audit threatened to expose the couple's fraud, they fled to the United States, heading first to Myrtle Beach, S.C., where they hid in a low-rent motel.
However, when Toronto Detective Steve Burnham threatened to arrest Amy, the couple desperately attempted to get in touch with her, then surrendered, taking a 1,650-kilometre cab ride to the Canadian border with more than $1.2 million stuffed into their suitcases.
Mr. Justice David Watt will sentence them on Friday.
National Post Online is a Hollinger / CanWest Publication
Kovals admit fraud worth $95-million
'The temptation was simply too great when that first $850,000 went into the Kovals' hands': Court hears of lavish lives
National Post . . . .
http://www.nationalpost.com . . . . March 28, 2001
Chris Eby . . . . . National Post
Comment:- This article is a repeat of the above but contains some telling additions which show the sort of people we are dealing with.
Loren Koval, who, according to a source close to the case, was the "brains of the operation," created shell corporations to divert suspicion, using family and friends to act as directors and to open corporate back accounts. She even used her daughter's personal bank accounts to siphon money secretly to their financing company.
Ron Koval paid himself a salary of $1-million for 2000 and he and his wife frequently racked up $25,000 in credit cards bill, taking trips to Miami and New York at the company's expense.
The couple clung to the hope that a long-term disability program funded by insurers would bring them to profitability by this month.
The Kovals had forged nearly 49 lease contracts, bilking Société Générale out $89-million, by July, 2000, when the bank informed them they would be conducting a review. Undaunted, the couple turned to another lending company, Associates Capital Limited, based in Texas, and drafted phony lease agreements totalling about $6-million. In October, 2000, the Associates conducted an audit and began contacting hospitals in Quebec that had supposedly leased equipment from the Kovals.
Globe & Mail . . POSTED AT 10:26 AM EST
Saturday, March 31
Kovals jailed for 7 years in huge fraud
By JANE GADD . . . From Saturday's Globe and Mail
Ron and Loren Koval shared a lingering kiss in a courtroom prisoner's box yesterday, then said goodbye after receiving seven-year sentences for fraud from a judge who paid tribute to their loving relationship.
But the notorious criminal couple, who pulled off a $94-million fraud against financial institutions by falsifying leases for medical and industrial equipment, could be together again in 14 months. That is the earliest they can receive day parole.
Ontario Superior Court Justice David Watt, in a sometimes lyrical speech that lauded the couple's tight-knit family and former sterling reputation, said the Kovals have been "equal partners in life and equal partners in this scheme."
Although they were dishonest in their dealings with lenders, they committed no breach of trust, he said. Nor did they place the lives or health of any patients at the health centre in jeopardy.
"The victims [chiefly the Royal Bank of Canada and Société-Générale (Canada)] were not without resources to protect themselves from this fraud," the judge said.
They lived in an $8,000 a month suite at the Hilton Hotel, owned homes in Waterdown and Hamilton, leased four luxury vehicles, ate in fancy restaurants every night and held lavish parties.
But defence lawyers Marlys Edwardh and Tony Bryant told reporters almost all the money went into supporting their dream of a state-of-the-art semi-private clinic.
"They are penniless," Mr. Bryant said. "This is not a situation where they put $100-million in their own pockets."
Toronto Police Detective Steve Burnham has a different view.
"Those Kovals thought they were kings," he told reporters.
"They boasted to people that they were not millionaires but billionaires."
Det. Burnham said no more charges will be laid even though Judge Watt noted the Kovals had drawn family members and friends into their scheme by making them directors of shell companies.
"This case is finished," he said. "There are no more people to arrest."
The final chapter . . .One of Canada's
richest fraud schemes
The Toronto Star <http://www.torontostar.com/news> Mar. 31, 2001
Peter Small STAFF REPORTER
Comment:- This article gives ever deeper insight into the sociopathic behaviour of the Kovals. They are not wicked scheming people in their own eyes. They are able to convince others of this - even the judge. They had a dream. They were people who lived the life and the reality of that dream and did what ever was necessary to obtain it. They did so without regard to the evidence and understandings of the real world they lived in or the morality of their actions. They were able to assume the good guy role in the face of this massive fraud. The response of the judge is a measure of their charisma and persuasiveness.
Ron and Loren Koval, who defrauded two big financial institutions out of more than $92 million to keep their dream of establishing Canada's largest private health centre alive, have been sentenced to seven years in prison.
``They have fallen far and landed hard,'' Mr. Justice David Watt said in handing out their sentence in Ontario Superior Court yesterday.
The couple of 26 years, sitting side by side in the prisoners' dock, showed little emotion upon hearing their fate.
It's the final chapter in one of the nation's biggest frauds, the story of an apparently successful medical facility kept afloat by stolen money.
It was remarkable that these apparently sophisticated lenders could be ``duped repeatedly,'' Watt said.
Royal Bank, which cleared most of the fraudulently endorsed cheques, has repaid Société Générale about $80 million, pending a court fight.
``The punishment does not fit the crime,'' said Dr. Ken Walker, a gynecologist and writer who practised at King's for more than three years.
``A message should have been given to all other white-collar thieves . . . that they'll go to jail for a long time.''
The maximum sentence is 10 years, but the judge took into account their guilty plea, clean records, co-operation with authorities and the likelihood they won't reoffend.
The Kovals had for six years fooled the world by appearing to be high-flying health financiers with all the trappings, including luxury cars and a permanent Toronto hotel suite.
But few knew their now-closed clinic, hailed or detested as a harbinger of private medicine in Canada, was a money pit.
``The King's Health Centre may have been on life support, but the Kovals didn't give that impression to the outside world,'' Watt said.
After it opened its doors in early 1996 in a renovated 10-storey former Bank of Canada building on University Ave., the Medical Post called it perhaps the country's biggest and certainly its most luxurious private health facility with rich regal colours, plush chairs and warm wood furniture.
Ron Koval, a college dropout and self-made equipment leasing financier, was hailed as a visionary, along with Loren, his high school sweetheart.
It supplied everything to doctors, in return taking 40 per of their gross, Walker said.
``If one secretary was ill one week you'd have another one. They looked after the billing. They looked after supplies. All you had to do was go there and practise medicine.''
And Koval seemed to have the wherewithal to keep the place afloat.
``He gave the impression that he had totally deep pockets, that he had made his money in real estate,'' said Irving Bronfman, who describes himself as Koval's right-hand man from the fall of 1995 to March, 1996.
``He would stand back with his hands in his pockets and his belly sticking out,'' Bronfman said.
``He was gracious and he played the big shot.''
Loren was a warm and well-liked former psychiatric nurse. Only Ron knew she alone was keeping track, in her head, of all the fraudulent leases, which were being repaid on schedule to keep up appearances.
Meanwhile, Ron wanted nothing but the best. ``He had carpeting at King's that was specially manufactured to have the King's (crown) logo in it,'' Bronfman said.
``And (there were) other furnishings and statues and artwork and large computer installations.''
They paid ``top-plus'' for all the employees, said Toronto fraud Detective Steve Burnham, who headed the probe.
They gave employees an annual trip, held staff galas, blowing $50,000 for one Christmas bash alone. They leased four expensive cars for themselves, including a $300,000 Bentley.
Almost from the start, it was clear Ron Koval was over his head, Bronfman said.
``He was a bit of a buffoon,'' Bronfman recalls, a man who substituted image for knowledge.
Ron Koval managed to fool some pretty high-powered doctors, however.
For several months, even the renowned Mayo Clinic in Minnesota was involved, providing consulting services on office design and service delivery.
But he had poor judgment in picking people for top jobs, said Bronfman, 62, a businessman who worked on marketing and a King's business plan before Koval fired him.
``You were dealing with a fellow who was way out of his league,'' Bronfman recalls.
But Ron Koval had charm. ``I always found him very pleasant, personable,'' Walker recalled.
``He was a rough diamond.''