Cocoon SDA Care: New legal blow for suspended NDIS provider

An NDIS company at the centre of an ongoing scandal has failed in its bid to force the government to pay millions of taxpayer money it claims it is owed.

An NDIS company at the centre of an ongoing scandal has failed in its bid to force the government to pay up to $6.4 million dollars of taxpayer money it claims it is owed.

Lawyers for Horizon SolSolutions, the parent company of Cocoon SDA Care, had previously argued that the National Disability Insurance Agency — which runs the disability scheme — should pay the company money for NDIS services already rendered.

Judge Michael Wheelahan dismissed two applications by Horizon SolSolutions and ordered the company to pay costs at a hearing at the Federal Court of Queensland on Tuesday.

Action was taken by Horizon after payments were locked by the agency in March while a manual audit was launched.

Cocoon SDA Care’s co-founder Zaffar Khan has issued a statement.

Judge Wheelahan said in his published judgement the “applicant claims that there has been unreasonable delay by the agency in determining its claims for payment”.

In his judgment he included details of a letter the company was sent on March 10, alleging it had submitted “claims for services provided to three people while they were incarcerated, which services the applicant did not provide”.

The letter stated that the claims totalled more than $26,000 “and characterised the claims as fraudulent”.

It also alleged the applicant had submitted claims of more than $77,500 in relation to supports claimed to have been provided to three people after their dates of death, which were also characterised as fraudulent.

Doorstep pictures of Muhammad Latif, sole director of NDIS provider Horizon Solutions, pictured at his Auburn home. Pics by Julian Andrews.

A third allegation was that “an employee of the applicant had uploaded a video to YouTube which disclosed the personal details of 30 NDIS participants contrary to privacy obligations”.

The video has been taken down.

The letter also included notices of proposed permanent banning orders to the applicant and its director Muahmmad Latif.

Horizon and Mr Latif dispute the facts that were alleged by the Commissioner in the three notices.

In his response on April 15, Mr Latif said “there had been administrative failures and honest mistakes in relation to a small subset of claims which were isolated and not systemic and not of a nature that would compromise the applicant’s business”.

He said fraud was a very serious allegation to make, and was not supported by the evidence.

Mr Latif said that the applicant had identified “some instances of incorrect claims for payment which he stated would be refunded to the agency”.

Cocoon’s Corporate Strategist Zaffar Khan issued a statement saying they will be considering their legal options after the judgment which was “disappointing and concerning”.

“While Cocoon SDA Care acknowledges and respects the judgment delivered by the Federal

Court, we find it to be disappointing and concerning,” he said.

“As we consider our legal options moving forward, we believe the judgement has wide-reaching implications—not only for our organisation and our staff, but most importantly for the vulnerable Australians we support. We owe it to them to pursue every available avenue to

restore stability and fairness.

“Horizon SolSolutions was forced to take the NDIA to court after it froze all our payments in

March, including thousands of invoices worth millions of dollars for services already provided.”

NDIA Director of the Serious and Complex Non-Compliance Section, Karen McDonald, previously said they had received 32 tip offs, which included that the company was managed by someone other than the company director, who had previously declared bankruptcy, enticed potential Specialist Disability Accommodation (SDA) investors with promises of unrealistic investment returns; traded while insolvent, relying on new investment cash from SDA investors and utilised funds received from investors for SDA investment purposes by the company for its own operation and private use.

Other allegations include providing incorrect supports to participants.

The applicant and Mr Latif dispute the above allegations.

Previously Ms McDonald accepted that while the investigations were ongoing, no claim of fraud against the applicant had yet been made, and no decision had been made that the applicant had been fraudulent.

However, Judge Wheelahan’s judgement concluded that “the reasons for which the manual review was instigated still have currency”.

Earlier this month the independent regulator handed Horizon a 30-day temporary ban on providing some NDIS services, due to “welfare” concerns of participants, resulting in vulnerable NDIS participants having to find new providers and in some cases new homes.

NDIA CEO Rebecca Falkingham said: “We welcome this decision and will continue to take all necessary actions to protect the interests of participants and the Scheme.

“We have zero tolerance for anyone who sets out to exploit the NDIS and participants and will always act against unscrupulous operators.

“The NDIA is unable to comment on ongoing investigations.”