Arrest as disabled duped of $400,000

A man has been charged with stealing over $400,000 from about 200 disabled people in the first arrest linked to the NDIS.

A man is arrested by the AFP over the NDIS.

A 34-year-old Victorian man has been charged with stealing more than $400,000 from about 200 disabled people in the first arrest of its kind under the landmark National Disability Insurance Scheme.

The alleged fraud spree, which was revealed by The Australian in August, took place in just two months from July and authorities allege the man used the money to buy a BMW 7-Series limousine, a Toyota Hi-Lux and designer clothing and jewellery.

This week a joint team from the newly established NDIS fraud taskforce — which includes members of the Australian Federal Police, the National Disability Insurance Agency and the Department of Human Services — executed a search warrant in the Melbourne suburb of Parkville.

Home Affairs Minister Peter Dutton said the introduction of the taskforce “was a strong and unequivocal warning to those who may try to commit serious fraud against the NDIS”.

Social Services Minister Paul Fletcher said the commonwealth “will come down hard on anyone who thinks they can defraud the NDIS or other welfare agencies”.

“The NDIA is ensuring that participants affected by this alleged fraud will have their funds reinstated in their plans,” Mr Fletcher said.

But the investigation took time and many participants were unable to spend the taxpayer money they had been allocated on crucial support services once their accounts had been raided.

Authorities did not release the man’s name but The Australian understands he is linked to cases previously reported by this newspaper.

Amounts as large as $12,000 were siphoned from individual participants by a company with which they had never signed an agreement.

A major security flaw in the online portal that allowed NDIS participants and providers to pay and be paid from their support packages was also exposed by The Australian and it is believed this allowed criminals to effectively guess a participant plan number to gain access to the system.

No other identifying details were required for access. The loophole was closed the same evening The Australian submitted questions to the NDIA about the issue.

The portal now requires three pieces of sensitive information to conduct a search and bring up a plan: the NDIS number, the participant’s last name and date of birth.

Minister for Human Services Michael Keenan said stealing from taxpayers was “not a victimless crime”.

“Fraud robs the Australian community of much-needed funds that should be spent on essential services we all rely on,” he said.

“The staff from my department involved in the taskforce are experts in fraud detection and prevention and I commend them for the work they’ve done to bring about this arrest.”

There are now about 200,000 participants in the NDIS and last year almost $7 billion in funding was committed as part of the scheme. That figure will rise to 475,000 participants by 2020 with an annual cost of at least $22bn.