Last update - 00:00 26/12/2007
Police arrest two more suspects in alleged insurance fraud ring
By Jonathan Lis, Haaretz Correspondent and Haaretz Service
Police on Wednesday arrested two more suspects allegedly involved in a scam to fraud the National Insurance Institute and private insurance companies, according to Army Radio.
Authorities have extended the remands of seven doctors suspected in the case, including a deputy district psychiatrist and an orthopedic surgeon, the radio reported.
The doctors were arrested Tuesday on suspicion of defrauding insurance providers by supplying false medical documentation for dozens of people purporting to have been injured in car accidents. Police suspect the doctors and ostensible patients raked in tens of millions of shekels in the alleged scam.
Rishon Letzion resident Yosef Tzemach is suspected of heading the fraud ring along with a Kfar Sava man, both of whom allegedly found people - primarily their friends and relatives - who were willing to file fraudulent accident claims with the NII and their insurance companies. Both alleged ringleaders were among eight additional suspects arrested yesterday.
"Dozens of people filed insurance claims in this manner," said Dudu Mantzur, head of the police's financial crimes unit. "We discovered ties between most of the claimants. It began with close family ties and moved on to acquaintances and one friend bringing another."
The Health Ministry said Tuesday that no decision will be made on what, if any, steps to take against the doctors until the police investigation is completed. The medical establishments implicated in the scandal include Abarbanel Mental Health Center in Bat Yam, Meir Hospital in Kfar Sava and Assaf Harofeh Hospital at the Tzrifin military base.
"We are surprised by the incident, and condemn and denounce such phenomena," Assaf Harofeh Hospital said in a statement. However, the hospital said there was no need to rush to judgment about the suspects until all the details were made available. "Only when the investigation is completed and lessons are learned will we be able to respond in a topical manner," the hospital said.
Meir and Abarbanel hospitals also were surprised to hear that their doctors were suspects in the case, and said the doctors in question were honorable and well-respected professionals.
Explaining how the scam allegedly worked, police said that once the claimants were found, the two ringleaders instructed them on how to purchase an insurance policy or expand an existing one. Six months later, the claimants were allegedly told to orchestrate a car accident, such as by braking suddenly and causing another driver to crash into them. In some of the cases, a second collaborator was recruited to crash into the claimant's vehicle, while in other cases no collision took place at all, police said. The claimants generally would be brought to a hospital emergency room and complain of shoulder and neck pain, and later on, of psychological difficulties.
At that stage, police said, the claimants were sent to one of the seven doctors arrested yesterday, who provided fraudulent documentation of the claimants' medical ailments, often without even seeing the patients.
Police said the suspects not only defrauded insurance providers and taxpayers of millions of shekels, but also endangered the lives of others by orchestrating car accidents.
The insurance money the claimants received was split evenly between them and the two ringleaders, who then paid the doctors a share of the money, police said.
The investigation began when the NII became suspicious of several claims filed shortly after the policies were taken out. They found that most of the claimants were relatives or acquaintances. In addition, Tzemach's name kept coming up as the person who helped the claimants file their claims.
Tzemach, who used to serve in the professional army, has a record of providing fictitious medical records for soldiers. Police said he built up a contact list over the years of various doctors who were willing to take bribes to issue false documentation.
"Our breakthrough came three months ago," said Mantzur. "We collected material that indicated this was a broad phenomenon and that doctors apparently were involved."
Investigators from the NII and the Avner Association for Motor Vehicle Casualty Insurance said their suspicions were aroused by the similar claims being filed and the connections between the claimants. According to the claims, they were all involved in similar types of accidents and suffered from the same physical ailments. The NII and Avner took their findings to the police, which then opened its own investigation.
In addition to allegedly filing fraudulent claims, the claimants are accused of overstating their salaries in an effort to get more money.