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Health Benefits Successful In Fraud Case

A guilty verdict was delivered last evening by the jury in the Wellington District Court case against the principal and three company representatives of New Zealand Diagnostics Ltd, a Waikanae based medical supply company. The verdicts were welcomed by the government agency that brought the prosecution, Health Benefits.

Health Benefits, a business unit of the Ministry of Health, laid criminal charges against the principal, Cavan Haines, his son Quentin Haines and two other company representatives, Joy Jones and Franciscus Buissink of New Zealand Diagnostics Ltd, of conspiracy to defraud. The fraud centred around New Zealand Diagnostics making false claims for the supply of certain subsidised medical equipment to health professionals. The period over which this fraud occurred was between 1994 and 1998. The amount defrauded was $5.5million.

Health Benefits is the agency responsible for receiving, assessing and making payment on claims to health professionals and medical supply companies for a range of government subsidised services, medications and equipment.

"Health Benefits is naturally pleased with the outcome of this case as we believed our investigation uncovered more than sufficient evidence for a compelling case against New Zealand Diagnostics," said Health Benefits Chief Operating Officer, Alastair McIlwrick

"More importantly however we have ended a major fraud, the scale of which seriously disadvantaged the general public by denying services, medication and equipment that could have been provided with the money that was fraudulently obtained by New Zealand Diagnostics

Alastair McIlwrick said the actions of the principal and company representatives of New Zealand Diagnostics not only defrauded the taxpayer it also cast doubt on a system of claims and payments that, due to its range and complexity, of necessity has to be based on a good measure of trust.

"Health Benefits are the first to acknowledge that the overwhelming majority of claims made by health professionals and the like are legal, honest and correctly submitted. In return Health Benefits does its utmost to ensure correctly lodged claims are expeditiously processed and paid."

"However those organisations or individuals who seek to defraud should be under no illusion that they can succeed. The auditing and monitoring procedures applied by Health Benefits will detect dishonest claiming, even, as in this instance, it is sophisticated and over an extended period", Alastair McIlwrick said.

The sums of money involved in this particular case are large and Health Benefits is actively pursuing a range of options to recover the money defrauded. This is consistent with Health Benefits policy of recovering public funds when they have been inappropriately claimed and maintaining a climate of accountability within the claimant community.

"As this action is subject to further legal considerations, it is not possible to comment on how much of the defrauded monies can be recovered", said Alastair McIlwrick.


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