Police Raid Offices of Meuhedet HMO, Arrest Exec for Graft

Three other employees also held on suspicion of fraud, accepting bribes.

Police raided the Meuhedet health maintenance organization head office in Tel Aviv yesterday, and detained an HMO executive and three of his staff in Jerusalem on suspicion of accepting bribes and fraud.

Police suspect irregularities in the HMO's handling of finances under Shmuel Mualem, CEO since 2008, and his predecessor Uzi Salant, who served in the position for three decades.

The officials are suspected of paying fees to mediators in exchange for luring customers from other health care services, and giving tens of millions of shekels to associates in rigged or fictitious tenders.

Yesterday police detained the HMO executive and three of his staff, all of whom will appear in court tomorrow for a remand extension hearing. More arrests are expected in the case.

The police raid and arrests are the latest step in authorities' examination of suspicions that have emerged recently of financial irregularities at the HMO, Israel's third largest.

For months, the State Comptroller's Office has been conducting an extended investigation into the Meuhedet management as part of a wide-ranging review to be published soon covering the four major health care services.

A draft document containing serious allegations against Meuhedet was submitted to several senior health care officials six months ago.

In recent days tension between the HMO and State Comptroller's Office peaked as Meuhedet was notified that authorities were in possession of documents outlining financial improprieties among its employees.

State Comptroller's Office staff submitted excerpts of the documents to David Shimron, the attorney representing Meuhedet's financial department, and Gil Haimovich, an HMO financial director who was also named in the probe.

One of the most serious allegations contained in the document is that Meuhedet paid considerable fees to mediators in exchange for drawing in new customers. In late 2006 and early 2007, some 30,000 customers from East Jerusalem switched to Meuhedet from the Leumit HMO in a move authorities characterized as "extremely unusual." Those allegations are now being heard in court following a complaint filed by Leumit.

Jerusalem is widely considered Meuhedet's stronghold, and 37.6 percent of the capital's residents belong to the HMO.

David Somech, Meuhedet's ombudsman, contacted State Comptroller Micha Lindenstrauss recently and asked that an investigation be opened against members of Lindenstrauss' office for allegedly withholding evidence that was to be used against Meuhedet officials.


Lindenstrauss' office issued a statement describing the letter as "a failed attempt by the Meuhedet management to divert the public's attention from a very serious document that points to operational failings by the HMO management over a long period and on a number of issues.

The document raises important issues that demand continued investigation by authorities. The HMO management worked over a long period of the document's drafting to disrupt the work of the State Comptroller's Office (in violation of the Basic Law on the State Comptroller ), and has not provided the necessary documents in its possession for review."

In August and October of this year, Haimovich first handed over files that the HMO management had allegedly hidden from the State Comptroller's Office. Lindenstrauss' office is now considering whether to take legal steps against the HMO for withholding information.

Meuhedet is the second-smallest of the country's four HMOs, with 1.1 million customers, annual turnover of NIS 3.6 million and 7,000 employees. It runs 200 clinics, as well as Jerusalem's Misgav Ladah Hospital and six nursing homes around the country.

A response from the HMO said, "Police investigators arrived at the HMO's offices this morning and asked to take various documents and files. Meuhedet met the police's every request."