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Fraud charges laid in medical aid dispute

Feb 03 2011 16:31 I-Net Bridge

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Johannesburg - Liberty Medical Scheme (LMS) on Thursday said it had laid criminal charges against the head of an associated company, V-Med Administrator (V-Med).

Its MD Patrick Masobe, the former registrar of medical schemes, has been charged with fraud, alternatively misappropriation of funds and theft of funds.

Vice-chairperson and trustee of LMS Christine Kinsman said the charges related to the unlawful withdrawal of more than R11m from its accounts.

"The unlawful withdrawal of more than R11m from LMS' accounts constitutes a criminal action perpetrated against our members," she said.

V-Med, an associated company of Liberty Life, was advised in October 2010 that it owed LMS R15.29m under an agreement between it and the scheme.

Payment was required within 10 days, failing which monthly fees payable to V-Med by LMS would be offset against the debt.

LMS said that while V-Med is mandated to effect authorised transactions based on valid instruction, or within operating mandates from the LMS bank account, V-Med's officers were instructed not to make payment for transfers relating to certain fees.

V-Med's officers, however, ignored this written instruction and made withdrawals from LMS' bank accounts on three occasions between November and January for more than R3m each time, it said.

LMS said it has not been given a "meaningful explanation" for the withdrawals.

"The board's determination to recover these amounts in line with sound business practices is aimed at ensuring that this incident will have no material impact on LMS", said Kinsman.

"This situation is most unfortunate and highlights V-Med's unbecoming conduct as administrators who are accredited by the Council for Medical Schemes," she said.



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