NDIS rorts exposed as criminal syndicates also exploit fraud-plagued sector

The NDIS has been described as a “lolly jar” for rorters, with criminal syndicates seeing it as easy pickings. See who has been caught.

Exclusive: Two out of three providers managing NDIS funds for disabled clients overcharged clients in administration fees, an investigation into the fraud-plagued sector has found.

A compliance crackdown by the National Disability Insurance Agency (NDIA) found that of the Plan Management Agents under review, 66 per cent subsequently cancelled one or more payments.

The compliance team’s work uncovered more than 38,700 incorrect or non-compliant payments and resulted in $44.8 million of taxpayers money clawed back since July 2021.

Meanwhile, the National Disability Insurance Scheme (NDIS) has been described as a “lolly jar” for rorters, with criminal syndicates seeing it as easy pickings.

It comes as NDIA insiders said that the scheme – which was rolled out across Australia from 2016 to 2020 – was a magnet for scammers because it was relatively new and involved vulnerable people who were more at risk of being dudded.

Three rorters caught and convicted of defrauding the NDIS. Left to right: Alaedine Rifai, Mohamed Omar and Mitchell Landry.

However, they said as loopholes were being closed and as the fraud team understood the system better, more and more people were being caught.

Bill Shorten, Minister for the NDIS and Government Services, said he was determined to get on top of the problem.

“I’m a bit amazed that the former Government didn’t think to put a padlock on the backdoor of the scheme,” he said.

“I want to get to the bottom of how people can put in invoices which sometimes never get checked.”

Criticism of the system has been highlighted in numerous court cases.

Judge Michael Rackemann presiding over an NDIS fraud matter last year, said that it was “surprising” that NDIS claims did not require “evidence of legitimacy”.

“The scheme is particularly vulnerable to fraud,” he said.

Alaedine Rifai’s Porsche was removed from his address after he was arrested by Australian Federal Police in May 2019. Picture: NSW Police

In another case, Melbourne man Mohamed Osman Omar, 39, managed to rort $370,000 in just five weeks after setting up an NDIS-registered company and charging people for services he did not provide.

That security flaw which allowed him to make up numbers for clients and steal from disabled people has now been fixed by the fraud team.

In a further case involving a criminal syndicate, a defence lawyer said any rudimentary audit process would have them discovered and “it’s like the lolly jar”.

The number of people working for the NDIS now amounts to more than 12,500, according to the latest report.

Payments handed out by the agency over the past two years grew by 51 per cent from $5 billion in June 2020 to $7.5 billion this June quarter.

Total payments almost tripled over the past three financial years – from $10.5 billion to $28.7 billion “in line with a growing scheme, with an increasing number of participants benefiting from the scheme”.

Alaedine Rifai is arrested by Australian Federal Police in May 2019 and was later convicted of defrauding the NDIS. Picture: NSW Police

The report said that on June 30, there were 35 fraud matters currently under investigation and a further eight matters under preliminary evaluation for investigation.

Of these, 14 matters are before the courts under prosecution, with a total alleged fraud value of $13.4 million.

One involves six people charged in relation to Operation Pyxis – an NDIS Taskforce investigation into an organised criminal group from Western Sydney which allegedly defrauded the NDIS of more than $2 million.

A NDIA spokesman said it was dedicated to stamping out fraud and payment noncompliance.

“That means not only working with our partners in the NDIS Fraud Taskforce to stamp out deliberate, criminal attempts to defraud the scheme, but also cracking down on payment compliance,” he said.

He said the overcharging by Plan Management Agents was an “example of payment noncompliance, when someone unintentionally does the wrong thing” and would not result in criminal charges.

A wad of cash seized by the AFOP during raids on an NDIS western Sydney syndicate. Picture: Supplied

One bought flashy cars and $14,000 of Louis Vuitton goods in just five weeks from the proceeds of fraudulent NDIS claims, while some members of a criminal syndicate fixated with Rolex watches were making up to $50,000 a day rorting not only the most-vulnerable in our community – but also tax payers. Here are just some of the people convicted for defrauding the NDIS.

Mohamed Omar arrives at the Melbourne County Court. Picture: Aaron Francis

EGYPTIAN HOLIDAY

A BMW, a Toyota HiLux and $14,000 of Louis Vuitton designer luxury goodies was how a Melbourne man used the money he stole from disabled people after exploiting a loophole in the National Disability Insurance Scheme.

Mohamed Osman Omar, 39, managed to scam $370,000 in just five weeks after setting up an NDIS-registered company and charging people for services he did not provide.

Omar made up numbers and billed 168 people for services without knowing their names or disabilities – a loophole the fraud team have now shutdown

In June 2019, he pleaded guilty to defraud­ing the NDIS of $370,336, attempting to defraud it of $85,099 and using the proceeds of crime.

But while he enjoyed a holiday in Egypt his victims were left struggling to pay for their care, including autistic children, one of which began suffering more frequent seizures due to his change in routine. Another mum had to ration nappies for her autistic twin daughters.

He was jailed for four years, with a minimum of two and a half years to serve.

Cary Thomas White pleaded guilty in Bundaberg District Court to five counts of gaining a financial advantage by deception.

BUYING AND SELLING BOATS

A father used his own son’s NDIS money to buy, fix up and sell boats which he claimed was to fund the purchase of a van to transport his disabled boy.

Cary Thomas White, 54, pleaded guilty in Bundaberg District Court, Queensland, to five counts of gaining a financial advantage by deception, between July 2019 and March 2020, amounting to $41,768.

The carer for his son, who is non-verbal and suffers from seizures, had applied for funding for a van for his son, but was declined.

He claimed he decided to fix up the boats and use the profits to buy the van.

He later purchased a van which had been fitted with facilities to help with the needs of his son.

The judge acknowledged the context of the offending showed dedication to supporting his son.

Nevertheless, White was sentenced to 21 months’ imprisonment, reduced to three months with a two year good behaviour bond.

Alaedine Rifai, also known as Alan Rifai, is the director of Universal Group Australia, a NDIS provider accused of defrauding the government scheme. Picture: Supplied

ROLEXES AND MILLIONS

Dreams of buying Rolexes was a motivator for the ringleaders of a criminal syndicate that was earning some members up to $50,000 a day.

“We will get Rolexes when we hit the million, it will take months to get the cars,” Alaedine Rifai, from Sydney, said in a text to his partner, mother of his child, and co-defendant Amal Hilmi.

“I want gold teeth, charge everyone!” another text said.

In total the pair, along with four other family members, rorted $1.5 million from their disabled victims.

The fraudulent payments enabled the greedy couple to buy flashy cars including a Porsche, Mercedes and an Audi, luxury watches and handbags and land on the Indonesian island of Lombok.

Rifai and Hilmi were both sentenced four years and nine months.

Mitchell Landry, who defrauded $321,940 from the National Disability Insurance Agency by pretending to mow lawns for disabled people. Picture: NCA NewsWire / Andrew Henshaw

PROPERTY MOGUL

A $64,000 Mercedes-Benz van and three properties was bought by a Victorian man after he rorted the NDIS for $340,000.

Mitchell Landry, 23, was jailed for three years for billing the NDIS for multiple bogus services he claimed had been provided by his legitimate business Mitchells Property and Mowing Services.

The court heard Landry from Bendigo had high-function autism, which had led to him being bullied at school, as had his weight.

Landry’s lawyer said he was going to be found out one way or another, as it was an “absurd undertaking on his behalf”.

DISHONEST

A Queensland carer was jailed for obtaining $43,000 following false claims for services for her client that she didn’t provide.

Audrey Pamba was convicted of four counts of general dishonesty in the District Court in Southport in August last year.

She was jailed for 21 months, but released after two months with a good behaviour bond period of two years.

Originally published as NDIS rorts exposed as criminal syndicates also exploit fraud-plagued sector