NDIS firm Cocoon SDA Care’s victims mount as staff chase unpaid wages, super

NDIS provider Cocoon SDA Care, co-founded by a former bankrupt, charged for services never provided and stalled on repaying. It left a man with disabilities confined to his home, whistleblowers say.

Zaffar Khan, a co-founder of provider Cocoon SDA Care. The business is responsible for around-the-clock care of some of the nation’s most vulnerable people. Picture: supplied

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An NDIS provider co-founded by a former bankrupt left a man with disabilities confined to his home after the company charged for services that were never provided and then stalled on paying the money back, whistleblowers say.

Insiders from Cocoon SDA Care have also spoken out about other alarming practices at the firm, revealing it has been able to continue operating despite failing to keep up with superannuation payments since at least last year.

The business is responsible for around-the-clock care of some of the nation’s most vulnerable people and claims it has 2400 workers, more than 200 homes and another 700 under construction.

Cocoon SDA Care’s executive director operations, Pranay Kumar, left, and co-founder Muhammad Latif at an Australian Financial Review event in 2024. Picture: Facebook

Amid allegations of misuse of taxpayer funding, an ongoing investigation involving agencies from a national fraud taskforce and an outcry from workers who say they are owed wages and entitlements, the business has been rushing to get clients to switch over to new company names to continue operating, staff say.

Some clients are reporting they are being neglected as a ­result of the company’s failure to pay wages, with frontline support workers going on strike or calling in sick and other staff being forced to do double shifts.

In the case of a South Australian man in Cocoon’s care, the company allegedly over-claimed more than $50,000 in NDIS payments for services that weren’t provided, according to whistleblowers who spoke to The Australian on the condition of anonymity.

An external and independent support co-ordinator whose duty was to act in the best interest of the client raised major anomalies, including Cocoon claiming it was taking the man into the community when it wasn’t.

Cocoon was also claiming payments from the NDIS for providing one-on-one care for the man when he had a housemate also under care, and for times when he was in the care of another provider. It was also alleged he had wrongly been classified as a high-intensity client by Cocoon.

His limited NDIS funding was drained and Cocoon failed to ­refund the money.

“The CP (community participation) funds had run out, Cocoon weren’t doing the refund, so this client could not access community. So he was stuck inside, doing nothing, basically,” one person claimed.

It was one of at least half a dozen similar cases in SA alone, the person added.

Providers overcharging the NDIS for services that haven’t been provided appears to be a huge risk to the scheme, which budget papers show will cost $48.5bn this financial year.

The company has defiantly blamed a National Disability Insurance Agency audit, which it says has held up payments and is “causing serious and ongoing impacts not only to the organisation but also to third parties, including vulnerable participants and staff”.

Parent company Horizon Solsolutions Australia Pty Ltd has launched Federal Court action against the NDIA, seeking payments, that was briefly mentioned in court on Friday and will be heard again on Tuesday.

NDIS funding to Cocoon is understood to have been cut off since early March.

The business has been able to operate despite red flags about co-founder Zaffar Khan, who has openly declared he previously went bankrupt in New Zealand after the failure of his business Ideal Cabs that he says trained the unemployed to drive taxis.

Authorities forced the taxi company to shut down after repeated warnings over business practices, including some cars being unregistered, according to media reports at the time.

Western Australia’s consumer watchdog additionally warned the public in 2007 about a “get rich quick” property scheme Mr Khan was promoting in seminars across the country, The Australian can reveal.

Newspaper advertisements for the seminars, conducted by The Science of Options Pty Ltd, made misleading and “extraordinary claims”, the watchdog warned back then.

Company records and a review of open source material including Mr Khan’s personal website indicate he has also been known as Zafar Iqbal and Zaffar Iqubal.

A Toowoomba couple, doctors Ellis and Margaret Gibson, took Mr Khan to Queensland’s Supreme Court in 2015 over the Dial a Home Doctor service he co-founded with fellow entrepreneur Muhammad Latif.

The Gibsons said they invested more than $1.1m in the after-hours medical service in a partnership deal they alleged had a “dishonest or fraudulent design”, saying Mr Khan siphoned off funds and told them “money gone, money mine”.

Mr Khan denied wrongdoing and the case settled out of court confidentially. Mr Latif is also co-founder of Cocoon SDA Care, where Mr Khan is corporate strategist.

A number of Cocoon’s workers say they are owed thousands of dollars in superannuation.

Draft contracts leaked to The Australian show Cocoon has been planning to transition to Caring 4 All Abilities Pty Ltd, whose director Pranay Kumar is listed as Cocoon’s executive director. The sole shareholder, named in corporate records as Umm-I-Ayman Zafar, has the same residential address as Mr Khan.

Cocoon declined to answer questions from The Australian.

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