Two arrested for medical aid fraud

Last updated: Wednesday, July 02, 2008 Print

A pharmacist and a doctor were arrested on Wednesday and the Asset Forfeiture Unit served them with a restraint on their estates to the value of R4.5 million, the National Prosecuting Authority said.

NPA spokesman Bulelwa Makeke said the male pharmacist and the female doctor were arrested in Faerie Glen and Silverlakes in Tshwane around 6am on Wednesday. The two allegedly colluded to defraud several medical aid schemes of millions of Rands on an ongoing basis at least since January 2005.

They were charged with fraud, theft and forgery in the Middelburg Regional Court. Charges of racketeering and money laundering may be added, Makeke said.

The pharmacist owned six pharmacies and allegedly submitted fraudulent claims to the Metropolitan Health Corporate which administers all claims submitted on behalf of members of various medical schemes such as Polmed, (for SA Police Service members), GEMS (for government employees) and at least 13 other medical aid schemes.

How the scam worked
The method used by the two to defraud medical aids was to sell groceries and other items, at hugely inflated prices, to members of various medical aid schemes.

The members of the schemes would "pay" for the items purchased by allowing the pharmacist, through his various pharmacies, to submit fraudulent claims on their behalf to their medical aid schemes for medication that was in fact neither dispensed nor required.

The doctor would provide prescriptions for medication not required, and without a proper medical consultation to the medical aid members. She would then submit a fraudulent claim for a consultation fee to the medical aid scheme of the member.

The Kwa Mhlanga Organised Crime Unit conducted eight successful entrapment operations at four of the pharmacies. The unit used police agents to purchase groceries and toiletries with their Polmed medical aid cards, broadly confirming the modus operandi described above.

Unclear the extent of the fraud
The true magnitude of the fraud perpetrated by the two was not known because a full forensic investigation still had to be conducted. However, medical aid forensic investigators estimate that a conservative estimate of the money lost by the medical aid schemes amounts to at least R2.6 million.

The two would appear before the Groblersdal Magistrate's Court on Wednesday or Thursday before being transferred to the Middelburg Regional Court, Makeke said. – (Sapa)

July 2008