Crime scene [illustrative].
(photo credit: INGIMAGE)
The Tel Aviv Economic Crimes Unit on Thursday filed an indictment with the city’s district court against 11 defendants, including top former Meuhedet officials for a NIS 40 million fraud scheme from 2003-2008 to illegally grab customers from competing medical insurance providers.
The scandal first broke with a State Comptroller report in 2010 calling attention to grave irregularities in the operations of the country’s third-largest health insurance provider, Meuhedet.
Following years of investigations, 11 individual defendants and 10 straw-man companies were indicted for participation in the fraud scheme.
Some of the central defendants were top former Meuhedet officials – marketing head Yehuda Eliash and former Jerusalem District head Moshe Chevroni – as well as Avraham Siboni, who headed an external Meuhedet-linked marketing company.
Under the scheme described by the indictment, Eliash approved the paying of funds to marketing companies like Siboni’s company, but the funds were then used to pay off members of other medical insurance providers to switch to Meuhedet.
The scheme was worked up in order to increase Meuhedet’s market share of the country’s pool of patients.
But the law prohibits such payments or offering any similar bribery-style incentives other than additional services to members one already has or to persons who have not yet selected an insurance provider.
Accordingly, Siboni created and provided to Eliash false receipts that the funds had been spent on marketing efforts, even as they were spent effectively as bribes to steal members away from competitors.
In a similar and overlapping scheme, Moshe Chevroni offered an Israeli-Arab medical insurance outlet with 38,000 members to switch en masse to Meuhedet with the heads of the outlet receiving NIS 275 for every member who switched over.
Eliash funneled the funds, over NIS 10m., in the deal arranged by Chevroni to the outlet heads through Siboni, who put out the needed false receipts stating that the funds were used for marketing.
Siboni ultimately put out false receipts regarding NIS 50m. in funds, most of which were given to Meuhedet by the Health Ministry to be spent on medical care for patients.