Fake hospitals set up to allegedly dupe insurance firms, bogus patients roped in to act as real claimants, fabricated bills, tests and records: This was the modus operandi of a Rs 1-crore fake insurance claims racket, said the Gurgaon Police, which was unearthed after a raid at Galaxy One Hospital last month.
Police arrested A S Yadav (55), who was running the hospital at New Nihal Colony, and his two sons on February 25, as well as three employees during the raid on February 18, in connection with the case.
ACP (West) Abhilaksh Joshi said, “We found Yadav was running four other fake hospitals, which were set up as medical institutes only on paper but acted as sites for the fraud. These are in Farukhnagar (Gurgaon district), Dwarka etc. They were set up for a two-year period beginning 2018 just for the fraud.”
Police said the raiding team recovered nearly 60 allegedly fake insurance claim files linked to around 25 firms at Galaxy One. ACP Joshi said at the time that fraud to the tune of at least Rs 1 crore had been unearthed so far.
The matter first came to light during a raid by the Chief Minister’s flying squad in May last year at the same hospital, police said, when a doctor was found using ‘MBBS/MD’ with his name without possessing an actual degree.
The squad had acted based on complaints it received about alleged insurance fraud, and begun its probe after the May raid, investigators said. Over the course of that year, it prepared a report that was eventually attached with the formal complaint submitted on February 14 this year at Bajghera police station, said officers, after which an FIR was filed.
Police said Yadav was running Galaxy One from a rented property. Nestled on the main road of the locality that falls under Palam Vihar Phase 1, the now-locked ‘hospital’ occupies three storeys of a weathered building, its facade marked by blue signboards and posters depicting surgical procedures, maternal care, and medical consultations.
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Anatomy of a fraud
Speaking to The Indian Express, ACP Joshi said the scale and operations are staggering. “In normal course, medical claims involve three parties: the hospital, middlemen, and the insurance companies. These companies do not manually check claims and bills themselves, but have private investigators (PIs) to check necessary records like admission and history,” he said.
Explaining the modus operandi of the racket, police said first, a legitimate-looking hospital would be set up specifically to ‘defraud’ insurance companies.
These ‘hospitals’, through its staff and doctors, would allegedly fabricate in-patient admissions records, laboratory reports, pharmacy bills, and treatment bills — just to make it seem that patients had been hospitalised and treated, said police, based on their preliminary inquiry.
Police said they would allegedly rope in people willing to list themselves as patients, share their Aadhaar and other details, and have claims filed against their names. These ‘fake patients’, along with the hospital staff, shared the proceeds from the fraudulent claims.
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Then, police said people posing as PIs for the insurance companies — the ‘actual kingpins’ — did the rest of the work.
“Once they found compromised doctors willing to participate in the fraud, the latter (doctors) would arrange the hospital spaces needed. They (doctors and PIs) would together arrange and prepare the fake lab, admission and diagnostic reports needed to apply for and get insurance claims,” ACP Joshi explained.
Police said the fabricated information would be forwarded to the companies or their intermediaries (third party administrators), showing the fake doctors’ approval, then eventually be ‘okayed’ by the PIs. The claim money would be credited to the account of the patient, who then passed it on after keeping a cut.
Police said the three arrested employees of the Gurgaon hospital were allegedly involved in preparing and facilitating the fake insurance claims. They were identified as Sapna and Varsha, both from Gurgaon, and Gaurav who hails from Rajasthan, police said.
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A larger network?
Police also claimed Yadav was not acting alone but was a cog in a large chain they are trying to unravel. “He claimed to hold an MBBS-MD degree, but the flying squad had already found the MD degree was fake. We are looking into his other degree now. We froze his bank accounts but hardly found any money in those… or with him; he is part of a large network behind this,” ACP Joshi said.
The ACP said Yadav’s two sons helped him plan and executive everything. “The Nihal Colony hospital was registered in his son’s name.”
Joshi said it is difficult to determine the number of such accused PIs at this stage since the probe is at a nascent stage, but put the number of people participating as bogus patients at over 500.
He said as of now, they are all at large but are being traced by a Special Investigation Team (SIT) he is heading. Officials from the health department are being roped in for raids.
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When asked if the Enforcement Directorate (ED) will be intimated and involved, ACP Joshi said, “It is hard to show the chain of money movement in these cases, since a lot of it is moved around in cash and into multiple accounts. We are trying to trace that (the larger, complex chain of the money trail and accounts/account holders of everyone involved) and build a watertight case.”
Joshi also said he hoped this case would be among the first large-scale cases of its kind in the country under which police successfully use their new powers under Section 107 of the BNSS, which lets police have assets attached and then auctioned or disposed of to financially compensate victims.
