NDIS scandal firm Cocoon accused of wrongly claiming payments for dead people

An NDIS firm at the centre of an unfolding scandal was accused of wrongly charging more than $77,000 for services to three dead people.

NDIS firm Cocoon SDA Care’s co-founder Zaffar Khan. Picture: Facebook

An NDIS firm at the centre of an unfolding scandal was accused of wrongly charging more than $77,000 for services to three dead people.

Cocoon SDA Care’s parent company, Horizon Solsolutions Australia, defended payment claims for people who had died as perfectly legitimate under National Disability Insurance Scheme rules.

But the company conceded it needed to repay tens of thousands of dollars for payments that shouldn’t have been made, blaming delays in death notifications.

Horizon director Muhammad Latif addressed the claims against the company in an affidavit obtained by The Australian.

“In instances where claims have been made following the death of a participant, claims have been made under the NDIS Bereavement Addendum, which authorises weekly payments for a period of up to four weeks,” Mr Latif said.

The affidavit was filed in the Federal Court as part of Cocoon’s attempts to end a National Disability Insurance Agency manual audit of all its NDIS payment claims.

The audit has been running since early March in response to a series of concerns and allegations against the Cocoon group, which has been promoted as one of the nation’s fastest-growing businesses.

On March 10, the NDIS Quality and Safeguards Commission issued Horizon and Mr Latif notices of a proposal to permanently ban them from providing support or services to people with disabilities, court filings state.

Mr Latif states in his affidavit that it appeared from the banning notices that the commission had a preliminary view the company “charged for services after the death of three participants, resulting in Horizon receiving payments in the total sum of $77,554.16”.

The commission also believed Horizon was paid $26,062.63 for “services that were never provided”, understood to relate to NDIS services for prisoners.

“Contrary to what is alleged in the Banning Notices on numerous items, Horizon did in fact provide services to participants while they were incarcerated, and with the full knowledge of the NDIA,” Mr Latif states.

“In instances where participants have been unexpectedly incarcerated, claims have been made for short notice cancellations, in accordance with the NDIS Pricing Arrangements and Price Limits policy.”

Horizon offered on March 18 to refund the full $103,616 it was alleged to have wrongly charged for services to dead people and prisoners, while the NDIS commission considered the company’s response, but “the NDIA did not accept that offer”, Mr Latif stated.

Mr Latif said incorrect payment claims for services to the deceased were inadvertent.

“Horizon has also identified claims in the sum of $20,385.22, where its accounts team was not promptly notified of the death of participants. Those claims are in the process of being cancelled by Horizon and refunded to the NDIA in full,” he stated.

Cocoon co-founder and “corporate strategist” Zaffar Khan said on Sunday that the company always intended to act within NDIS rules and guidelines.

Muhammad Latif, director of NDIS provider Cocoon SDA Care and parent company Horizon SolSolutions, outside his Sydney home.

“These payments were identified by internal audits conducted by Cocoon, and repayments were initiated before any concerns were raised by NDIA, demonstrating transparency, accountability and proactive compliance,” Mr Khan said.

“An error detected and reported by Cocoon, where Cocoon proactively sought to repay public funds, is now being used by the agency as grounds to suspend our business.”

Mr Latif’s affidavit went on to address other claims made against Cocoon in 32 “tip-offs” to the NDIA over more than four years, saying it was “not true” that someone else is in charge.

Numerous company insiders have told The Australian that Mr Khan, an ex-bankrupt investment spruiker, is running the NDIS business.

“I am the managing director of Horizon. Nor is it true that Horizon has enticed potential Specialist Disability Accommodation investors with promises of unrealistic investment returns, or that it has traded while insolvent,” Mr Latif stated.

“Horizon has also not utilised funds received from investors for SDA investment purposes for its own operation or private use. Horizon has not treated participants carelessly and it has not hired unqualified staff. These allegations are scandalous.”

Downplaying the number of tip-offs about the company, he said the commission received more than 20,000 complaints from NDIS participants in any given quarter.

A damning independent audit of the company’s financials, cited by federal authorities as one of the reasons for concern, had no bearing on Horizon’s support and services to NDIS participants, he added.

Horizon passed midterm NDIS audits in 2022 and 2023, and recertification audits in 2024, the affidavit states.

The company paid three infringement notices issued by the NDIS commission in November 2023 without admitting guilt or liability.

Those notices were issued when three women with disabilities were locked out of their home in South Australia. Mr Latif said Horizon was involved in a dispute with the property’s owners.

“Had I known at the time that the NDIA would later rely on the notices to withhold payment … Horizon would not have paid the infringement notice amounts and would have challenged the allegations through the courts,” he said.

“Horizon submitted to the commission that the incident … was not a result of a failure by Horizon to provide supports and services in a safe and competent manner, with care and skill. Rather, the incident was a highly unusual and unexpected event, occurring in the context of an ongoing dispute with a former employee and investor.”