Eleven charged with medical fraud in Western

NAIROBI: Eleven people suspected of operating a sophisticated fraud syndicate in Western were arrested and charged in December last year.

The arrest was a major milestone for the Insurance Regulatory Authority's (IRA) fight against fraud. Fraud has been a problem for the insurance industry, with some reports estimating that as many as 50 per cent of insurance claims paid out are falsified.

The Magistrates' Court heard that the 11 were part of a cartel of fraudsters who print fake Jubilee Insurance medical access cards with 'genuine' membership numbers and use them to acquire medical drugs from various health institutions targeting genuine members' accounts.

The drugs were being collected from various medical facilities, among them Nairobi Hospital and Gathimaini Pharmacy in Thika. Emmanuel Ojuki Otieno was arrested when he allegedly attempted to present a forged prescription from Meridian Medical Centre in Nairobi.

"We arrested Mr Ojuki, who led us to the second accused in a house in Pipeline Estate, Nairobi where we found many suspected forged claim forms for Jubilee Insurance, rubber stamps of various health institutions and forged prescriptions," the prosecution said.

The prosecution told the court that all the accused were found to be properly linked to the case as they operated as a cartel. That there was also enough reason to believe that each of the accused had a role to play. The court directed the prosecution to supply their lawyers with all the documents that would be relied on in the case.

The accused were Ojuki, Paul Ochieng Ongiri, Daniel Opondo Omollo, Evans Ochieng Oduk, Geoffrey Owuor, Philip Robert Ndanyi, Ms Jackline Adhiambo Otieno, Nicholas Kibiwot Ruto, Jamal Esmail Jamaldin, Julius Okaka Akhaende and Erick Andala Khatela

They denied the charges and were released on a Sh200,000 cash bail each or a Sh500,000 bond.

"Insurance fraud threatens the financial strength of insurers and the survival of the insurance institution. This vice, if not managed, portends a real threat to the future of the sector," said IRA Chief Executive Officer Sammy Makove after the arrest of the suspects.

The head of the Insurance Fraud Investigation Unit (IFIU) Bridgit Kanyai said the syndicate in Western region was able to, among other things, impersonate a base commander at a police station, medical doctor, High Court judge and advocates to pursue fraudulent claims.

It also crafted a sophisticated mechanism that enabled it claim expensive medicines from various hospitals and pharmacies, which it then resold to these health centres.

Mr Makove said the insurance industry faces a number of challenges in dealing with fraud, including difficulty in detecting and quantifying fraud, difficulty in communicating information about it, lack of data-sharing mechanisms among insurers, lack of data analytics, skewed attitudes and a lack of public awareness on the issue.

Since its establishment, IFIU has handled 392 cases.