Health ministry audit reveals Rf11.8 million (US$761,290) fraud

A local company charged with procuring medical consumables and laboratory equipment for Malé and regional hospitals has defrauded the health ministry out of Rf 11.8 million (US$ 761, 290), an audit report has revealed.

F- Tech Solutions Pvt. Ltd doctored invoices and delivery notes and forged signatures to collect payment on goods that have not been supplied to the health ministry to this day, Auditor General Niyaz Ibrahim claimed.

The company had only supplied Rf 930, 512 (US$ 60,033) worth of medical consumables and laboratory equipment to the government, the report said.

The tender evaluation board awarded the contract to F- Tech Solutions even though the company had no prior experience in supplying medical equipment, had lied about previously supplying medical equipment to the health ministry in bidding documents, and had no import licenses or permits from the Maldives Food and Drug Authority to distribute medical supplies, the report noted.

The Rf 12.8 million (US$ 831,169) contract was awarded to F-Tech in September 2010 against the Anti Corruption Commission’s (ACC) advice at the time. The ACC had raised concerns over F-Tech’s lack of necessary licenses and permits.

According to the report, the State Minister of Finance at the time opened a Local Letter of Credit facility (LC) worth the total contract amount for F-Tech Solutions at the State Bank of India (SBI). The Auditor General said the move contravened the Maldives Finance Act which states only 15 percent of total contract value can be paid out in advance.

Further, although the contract was made between F-Tech and the health ministry, the state minister for finance authorised finance ministry staff instead of health ministry staff to sign delivery notes, the report said.

Niyaz said the state minister’s decision to establish a LC facility “opened up the opportunity” for payments to be made for unsupplied goods and “weakened the state’s internal control mechanisms.”

A Deputy Director General at the Ministry of Finance and Treasury authorised payment to F-Tech without confirming receipt of goods with the health ministry, even though SBI had noted discrepancies between the invoices and delivery notes. Nine of the 21 invoices were issued a month before the date printed on delivery notes, the report said.

Moreover, the Health Ministry did not annul the contract with F- Tech Solutions as per the agreement even though the company had failed to supply medical equipment for the period October – December 2011.

Instead, the ministry had procured the consumables itself and told F- Tech the amount would be deducted from the total payment to the company. However, no such deduction took place.

Niyaz recommends filing fraud charges against F- Tech Solutions, and filing negligence charges against the Tender Evaluation Board, and relevant Health Ministry and Finance Ministry officials. The report does not name the accused.

Niyaz has asked the police to investigate the case on April 18.

Doctored invoices

The report, published on April 19, said F – Tech Solutions had forged signatures on delivery notes and invoices claiming goods had been supplied to the health ministry. Even on the instances goods were delivered, the prices listed for goods were much higher than that pledged in the contract.

“This office notes that F- Tech Solutions forged signatures on some delivery notes and invoices. Further, the health ministry, hospitals and health centers have not received any of the goods said to have been delivered on the delivery notes. While the health ministry’s supply department has received goods noted on one invoice, the prices noted on the invoice are extraordinarily higher than prices pledged in the contract document,” the report said.

Nine of the 21 delivery notes worth Rf 5,787,272 (US$ 373, 372) were signed by a health ministry procurement officer. However, “the procurement officer in a statement to the office said the signature on the delivery notes were not his, that he had not signed the delivery notes, and that he had not claimed said medical supplies.”

Further, the procurement officer noted he was not authorized to receive medical supplies on behalf of the health ministry, and had not done so previously.

Two of the 21 delivery notes worth Rf 4, 215,642 (US$ 271, 977) were signed by a health ministry staff that did not exist in the health ministry records. However, the name matched the nickname of the ministry staff, but the staff told the Audit Office he had not signed or received goods on behalf of the ministry.

On the instances F – Tech Solutions had supplied goods, the company defrauded the ministry of Rf 1,816,793 (US$ 117, 212). The company had claimed Rf 2,368,954 (US$ 152, 836) on goods that were only worth Rf 522,161 (US$ 33,687).

The Maldives Customs Services has confirmed that F – Tech Solutions has never imported medical consumables and laboratory equipment, the report said. The goods that were supplied to the health ministry were bought on credit from a separate private company.

Further, even though F – Tech had agreed to import Rf 12.8 million (US$ 831,169) worth of goods, the import license approved to the company from the Economic Ministry was only worth Rf 500,000 (US$ 32,258).

According to local media Haveeru, F – Tech’s six directors are: Managing Director: Mohamed Abdulla, Director of Operations: Abdulla Rashid, Director of Administrations: Abdulla Shafeeg, Director of Sales and Marketing: Ahuyad Hisaan, Director of Logistics: Rilwan Shareef, and Director of Human Resources: Fathimath Shiuna.

Of the six, Haveeru notes Shareef and Shiuna are prominent former ruling Maldivian Democratic Party (MDP) activists.

The Supreme Court disqualified MP Ismail Abdul Hameed in February 2012 for authorising payment for goods before delivery while he was director at the Malé Municipalty in 2008. Hameed was sentenced to one year six months banishment.

Meanwhile, Deputy Speaker Ahmed Nazim was acquitted of four counts of fraud in February. The charges against Nazim concerned public procurement tenders of the former Atolls Ministry secured through fraudulent documents and paper companies.

MP ‘Redwave’ Ahmed Saleem was also cleared of corruption charges in February. The state has charged Saleem with the conspiracy to defraud the former Atolls Ministry in the purchase of the mosque sound systems.

In addition, the State Trading Organisation (STO) has withdrawn a a case worth more than a million US dollars lodged against Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed’s Meridian Services Private limited. The case concerned an unpaid sum of money worth Rf 19,333,671.20 (US$1,253,804.88) regarding Meridian’s use of the STO’s credit facilities.

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MP rejects authority of Criminal Court after judge releases armed “I was just cooking” civilian

Today’s Criminal Court hearing for a case involving ruling Maldivian Democratic Party (MDP) MP for Thimmarafushi Mohamed Musthafa was cancelled after the MP refused to accept the court summons on the grounds that the court’s judges were unlawfully appointed.

Musthafa added that Thimarafushi island council had advised against his attending the hearing.

Musthafa’s comment came after the Criminal Court today ordered the release of a man arrested for carrying a knife as protesters spread throughout Male’ on Friday evening.

Hassan Areef, who has prior convictions for violence, was arrested in Henveiru ward by the Maldives National Defence Force (MNDF) before being handed over to police.

Appearing in court today, Areef claimed he had been preparing a meal using a butter knife when he went outside to see the commotion, unintentionally carrying the knife with him, according to local media.

The criminal court accepted Areef’s version and ordered his release. Police have announced their intention to appeal the verdict.

Meanwhile, in a letter to the court, Musthafa justified his refusal by citing President Mohamed Nasheed’s position that lower court judges were not appointed in accordance with Article 149 of the constitution, therefore their rulings held no legal weight.

According to Article 149, “A person appointed as a Judge in accordance with law, must possess the educational qualifications,  experience  and  recognised competence necessary to discharge the duties and responsibilities of a Judge, and must be of high moral character.”

The article further requires judges to be a Sunni Muslim of at least 25 years of age, who has not been convicted of an offence and is of sound mind.

Musthafa has been charged for bounced cheques.

The MP faces multiple charges of cheque fraud, notably over transactions made by his company Seafood International Pvt Ltd.

Citing deception by food supplier General Meat Ltd, Musthafa threatened legal action against the Maldives Monetary Authority (MMA) in November if it did not pay the US$500,000 that the Bank of Credit and Commerce International (BCCI) owed Seafood International.

Musthafa alleged that the sum was due to be paid to his company according to a 1991 London court ruling.

Citing MMA as the “live branch of BCCI in the Maldives,” Musthafa previously stated that “the debt of a dead person has to be paid by a living legal parent. If the MMA does not pay us within seven days we will sue the MMA in court and when we sue, we will ask the court to take the amount of money for the loss we have had for the past 20 years as a cause of not having this money.’’

Meanwhile, a case filed in 2009 by opposition Progressive Party of Maldives (PPM) Vice President Umar Naseer claims Musthafa must be removed from Parliament due to a decreed debt which is in violation of Article 73(c)1.

The Supreme Court was due to rule on a case against Musthafa on October 20, however proceedings were interrupted when MDP called for a nation-wide protest against the judiciary during an emergency meeting.

Speaking to Minivan News at the time, MDP MP and spokesperson for the party’s Parliamentary Group, Mohamed Shifaz, said judges had been blackmailed and that the party would protest the politicised judiciary indefinitely.

This month, the opposition took up the protest baton and demanded the release of Criminal Court Chief Judge Abdulla Mohamed from military detention. The Judge was arrested on January 16, 2012. Protestors have demonstrated against the government since that date.

Contending that the judge was lawfully arrested, the government has requested international legal assistance to resolve what has been labelled a “judicial crisis”.

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RF18 million vanishes from Sheesha account

Rf18 million has allegedly gone missing from a State Bank of India (SBI) account owned by the three brothers who own local motorcycle retailer Sheesha.

Police have launched an investigation into the fraud case, reports Haveeru.

The transfer, allegedly unauthorised, was made from a personal savings account, Haveeru claims. The recipient account has not been identified.

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Electronic voting depends on public awareness in Maldives

The Maldives has expressed support for electronic voting systems in India and Pakistan, and is taking steps to introduce Electronic Voting Machines (EVMs) to its own electoral process.

At an informal meeting of Electoral Commissioners from SAARC member countries in India, the Maldives joined Bhutan, Afghanistan, Nepal and Sri Lanka in praising India’s use of EVMs and indicated that “legal amendments would be thought of to see that EVMs were made popular to ensure free and fair polls in their countries,” Indian news outlet The Hindu reported yesterday.

Commissioners met to discuss Afghanistan’s voting procedures in light of waning financial and other aid from NATO allies.

Maldives Elections Commission President Fuad Thaufeeq said the commission, which is developing a proposal for Parliament regarding EVMs, has met with the Committee on Independent Commissions to discuss their implementation.

“So far, we have been getting information from many countries in Europe, South America and Asia which have used these. Regionally, India, Nepal, and Bhutan have used the machines and we are also getting advice from them. Hopefully the system will work, but some laws will have to be changed and the public must support the decision,” said Thaufeeq.

Prior to the 2008 Presidential election, India had offered to donate several hundred EVMs to the Maldives. “But it was the wrong time,” said Thaufeeq. “The machines India was using could not do print-outs. This year, they upgraded and added a verification process. I think it’s necessary for the Maldives to have a verification system,” he said.

Thaufeeq indicated that the commission may approach India’s High Commission to renew their offer of donations. Otherwise, he said machines will be chosen through a negotiation process with various companies, and bids may be solicited.

Electronic and internet voting systems have been used worldwide for decades, and have triggered much debate.

India first used electronic voting machines in 1982; in 2002, they became an election standard nation-wide. However, India’s 2009 elections were discredited when Omesh Saigal, an IIT alumnus and IAS officer publicly proved that the electronic voting system may have been rigged.

In 2006, the Netherlands’ General Intelligence and Security Service proved that electronic voting machines could be eavesdropped from up to 40 metres. EVMs were subsequently eliminated.

Since the 2000 presidential election, the United States has reported problems with electronic voting machines in a number of local and national elections. Mis-punched cards, security flaws, and touch screen malfunctions were some factors that have tipped votes over the past decade.

Internet voting was proposed for the Maldives’ Parliamentary elections as a means of cutting costs and confusion for Maldivians living abroad. Project Coordinator at NGO Transparency Maldives Aiman Rasheed said the motion was swiftly rejected by Parliament, and although Transparency has not been officially informed of the discussion, doubts that EVMs will be treated differently.

Observing that EVMs are acceptable under the right conditions, Rasheed explained that the advantages of using EVMs in the Maldives did not justify the disadvantages.

“In a large country with dense population centers, they can be useful,” he said. “But the Maldives is so small, and population areas are so widely spread out, with only 400 polling stations I don’t think that they would be a major improvement.”

Rasheed said the disadvantages of EVMs could have a significant political impact, and believed the public should be involved in the decision.

“I think Parliament and the Elections Commission should carefully consider the cost-benefit. Is the quick count worth the room that the new system with EVMs would leave for accusations of fraud or lack of transparency?” he said, noting that Maldivians tend to have a high “trust deficit”, and pointing out that Maldivian law does not allow for exit polls.

Building public trust is driving the dialogue over EVMs in the Maldives. Dhivehi Rayyithunge Party (DRP) Deputy Leader Ibrahim ‘Mavota’ Shareef  agreed with Rasheed’s assessment.

“There is a lot of suspicion about new innovations that people are not familiar with. If done correctly, and people are informed, then EVMs shouldn’t be a problem for democracy in the Maldives,” he said.

However, Shareef observed that “any electronic machine with passwords can be corrupted,” adding that corruption is a higher risk for small communities. He recommended the Elections Commission “prove it cannot be manipulated” by issuing public education programs through the media.

“There is no public participation in the Election Commission’s discussion right now. Many islanders are unaware of how these things work. Without building trust, there will always be suspicion,” he said.

Rasheed explained that the “trust deficit” was a symptom of a young democracy.

“The Maldives’ biggest issue is that it has only had three free elections, and those were very recent. The latest Parliamentary and Presidential elections did very well under the circumstances, but the local elections have definitely declined in terms of transparency.”

Rasheed said that during these elections, political parties and NGOs sent volunteers to observe the electoral process, promoting transparency. Although new legal framework was implemented a mere one-and-a-half months prior to the Presidential election, and three months prior to the Parliamentary elections, “they did quite well,” said Rasheed.

Local elections, which had 18 months to prepare, performed well administratively “but they did not do so well in terms of transparency,” said Rasheed.

MDP MP Eva Abdulla also believes that free, transparent elections must be routinised before electronic modifications are made to the electoral process.

“I’m not sure if we are willing to move away from the physical voting system. It’s only been three years since we began trusting independent voting procedures,” she said.

Abdulla believes that Maldivians are quick to absorb new technology, but doubts that the advantages of EVMs are relevant to the Maldives.

Previously, island geography meant that counting and recording votes could take several days. “Now, officials count the ballots in front of the people on the same day, and we have our results immediately,” said Abdullah.

The Elections Commission has a different impression of the situation.

According to Thaufeeq, the average five to six hours that manual voting procedures involve is too long, and the costs of employing workers to manage the polls is too high. He said that while the transparency of open counting is important, there are significant advantages to electronic voting.

“Responses from MPs and the general public has indicated that people are more ready today than they were three years back. People are more familiar with technology right now, an EVM is similar to an ATM, which everyone can use,” said Thaufeeq. “But above all, we want the approval of Parliament and the public, to be sure that everyone is aware and comfortable with the system.”

Public examinability of voting procedures has been identified as an essential factor of free elections by government and independent groups worldwide.

In 2007, California Secretary of State Debra Bowen commission a statewide “Top to Bottom review” of electronic voting systems. According the report, every mechanism contained at least one security flaw that would allow a single non-expert to compromise an entire election.

In 2009, the Federal Constitutional Court of Germany found that when using voting machines the “verification of the result must be possible by the citizen reliably and without any specialist knowledge of the subject.”

Although the Maldives’ plans for implementing EVMs are far from concrete, the sentiments behind the suggestion are strong.

“Historically, the Maldives has had close elections with little information, which has generated suspicion of fraud,” Rasheed said. “If people can’t see what is happening, it will feed the country’s rising trust deficit.”

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Police arrest fake Bangladeshi doctor

Police have arrested a 41-year-old Bangladeshi national who was pretending to be a doctor and treating expatriate patients living in the capital.

Police Sub-Inspector Ahmed Shiyam confirmed that the “fake doctor” was arrested in Male’ on October 2 (Sunday).

“Police found some medical certificates, which we suspect are not valid certificates,” Shiyam said. “So far, we have learned that he mostly took care of Bangladeshi nationals working in Male’.”

Police found medical certificates as well as equipment and tools when they searched his residence, including syringes, a stethoscope, a blood pressure gauge and various kinds of medicine.

The police fraud and financial crime department is investigating the case.

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Uligamu islanders allege PA party registration fraud

Islanders of Uligamu in Haa Alif Atoll have alleged that more than 60 islanders that filled application forms for a computer course offered by Focus Education have been registered in the minority opposition People’s Alliance (PA) without their knowledge.

“It is believed that the person who ran the program on this island used the information of all persons that signed up for the course and filled application forms to sign up for PA,” an Uligamu Councillor, Ahmed Muiz, told Minivan News.

“The course was held early last year and people working in different sectors signed up for the course,” he said. “The reason why people allege that it was the person who ran the course on this island that has done this is because in all the forms filled to join PA, he has written his name as the witness.”

Muiz said that islanders have informed the PA and the Elections Commission (EC) about the fraud, but have not received an official reply so far.

“All the forms were fingerprinted too, but all the information except for the applicant’s named and some other basic information were wrong,” he said. “Like the mother’s name or father’s name was wrong in almost all of the forms that the Elections Commission has received.”

The People’s Alliance media coordinator did not respond to Minivan News at time of press.

Former PA Secretary General Ahmed Shareef, now Secretary General of the Elections Commission, told Minivan News that he had no information on the matter.

“There have been many similar cases filed in the commission. When dealing with such matters, we first inform the political party that this has happened and ask them to clarify how it has happened,” Shareef said.

If anyone has been registered to a political party without their knowledge, Shareef said, the person should inform the commission in writing or contact the political party in which the person was registered.

Police Sub-Inspector Ahmed Shiyam said the matter had not yet been reported to police.

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BML suspends Vilingili branch employee for alleged fraud

An employee at Bank of Maldives (BML) in the Gaaf Dhaal Atoll Vilingili branch has been suspended on allegations of fraud.

The bank did not identify the employee to the press.

A person from the island told Haveeru that the employee had allegedly sent a forged letter to the branch manager in the account owner’s name, requesting that Rf 2,000 (US$130) be transferred to another account.

It is believed that the money was transferred to the account of one of the employee’s friends.

The fraud came into light when the account owner’s mother went to the bank to withdraw Rf 2,000 only to find that the amount was not available.

“When the bank told her that the account did not have that much cash in it she objected, stressing that her child had deposited the amount. The employee was suspended after the bank tracked down the transaction,” the person said.

In a statement forwarded to Haveeru, the bank said employees found responsible for the fraud had been suspended and that the bank, like any other bank in the world, sometimes faced cases of staff fraud.

“But given the millions of transactions made at the bank annually, the numbers of fraud cases are considerably less compared to global rates of such incidences,” the statement read.

The statement further noted that the mechanism necessary for customer protection is fully established at the bank and that a system, which allows the tracking of transactions and all customer-employee exchanges, is accessible at all times.

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BML ‘phishing’ website targets mobile banking customers

The Bank of Maldives (BML) yesterday issued a statement warning that fraudsters had created a false BML website to deceive the company’s mobile banking service customers, obtaining their bank account number, credit card number and its security code through the fraudulent website.

The fraudsters were inviting BML customers to their fraudulent website under the bankofmaldives.net domain by sending text messages from 00455, claiming it was a registration website for the BML mobile banking service.

The fraud, known as ‘phishing’, is relatively common in the Western world and many banks instruct their customers to never access their website by clicking a link in an email. Technology analyst group Gartner estimate that 3.6 million adults fell victim to such scams in the 12 months ending August 2007, losing US$3.2 billion in the process.

Since then phishing attacks have become markedly more targeted and refined, with the emergence of ‘spear-phishing’, with individual and high-value targets such as corporate account executives being targeted.

BML warned that if any of its customers filled this registration form displayed in the fraud website, the fraudsters will be able to take advantage of them and misuse the information.

The statement said that the mobile banking was a service provided by BML “with high security and confidentiality.”

However, it is the responsibility of the customers to keep confidential information such as their card number, expiration date, pin number and security code, account number, internet banking user ID and its security and password, said the statement.

The BML said the most common method fraudsters used was to obtain information to misuse credit cards and debit cards after obtaining the data by sending emails from sources trusted by the victim, linked to fraudulent sources.

The fraudulent website is designed to appear just like the legitimate website.

BML warned customers to never use a link to access the bank’s website, and recommended its address www.bankofmaldives.com.mv be typed directly into the browser.

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Maldives to pardon Filipino fraudsters in exchange for Climate Summit support

The Maldives government intends to pardon seven Filipino nationals who were arrested in 2008 for credit card fraud and sentenced to 25 years in prison.

The seven workers, identified by the Philippine Daily Inquirer as Kenneth Navarro, Lito Lago, Dario Agao, Christian Ryan Pineda, Jeffrey Jenkins, Gilbert Bendana and Joey Omawas, were employed at the Dome Cafe at the Maldives International Airport until they were arrested in 2008.

The Inquirer reported that the seven were initially jailed for a one and a half months after they were charged with theft and fraud for stealing a customer’s credit card and receiving items bought with the card in May 2008.

They were conditionally freed while their case was heard, but on February 17, 2009 were sentenced to 25 years in prison and ordered to pay Rf100,000 (US$77,800) in damages after the court found their statements were “conflicting”, and ruled that all of them were guilty.

“The Phillipines government has made a formal requet for clemency to be granted, and the President has given instructions for the request to be accomodated,” confirmed the President’s Press Secretary Mohamed Zuhair.

The request had not yet been granted and the process was “ongoing”, Zuhair said, suggesting that should the prisoners be released, the government of the Phillipines “should underwrite the damages, or the government should request it. The issue of compensation is a legal matter,” he noted.

The Philippines government has meanwhile published a statement crediting the release of the seven waiters to a ‘farewell gift’ from President Mohamed Nasheed to outgoing Phillipines Ambassador to the Maldives and Sri Lanka, Zenaida Tacorda Rabago.

“Several avenues were sought for the release/deportation of the seven Filipinos” under the authority of pardon granted to President Nasheed through the recently approved Clemency Law, the release stated.

“In turn, President Nasheed requested that the Philippines support an Asian Summit on climate change,” and “intimated to the Ambassador the hiring of Filipino professionals from the medical, entertainment, and educational fields,” the statement read.

Rabago has also worked to free two Filipinos who have served seven months in jail while awaiting formal charges from the Sri Lankan Government.

State Minister of Foreign Affairs Ahmed Naseem said the Ministry had not been given “any specific instructions” on the matter, but approved in principle.

“We need to send these people away because the jail system here is not conducive to holding foreigners,” he said, noting that the matter had been handed to the Clemency Board.

The Maldivian government is meanwhile working on repatriating Maldivian citizens imprisoned overseas. Foreign Minister Dr Ahmed Shaheed, speaking in a meeting at the Maldivian Democratic Party (MDP) headquaters, last week, announced that government would seek to return Maldivian detainees from Syria.

Dr Shaheed said that he would soon travel to Syria with the main purpose of releasing the Maldivian detainees from Syrian jails.

”The main reason of scheduled trip to Syria is to release the Maldivian detainees from prison,” Dr Shaheed said. ”Hopefully, we can release these prisoners and bring them back to the Maldives.”

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