The Good Doctor and the Insurance Consultant

MICHAEL KING

Erso Ahmet was an Australian orthopedic surgeon. He was the middle child of a hardworking, middle-class immigrant family, born in the western suburbs of Sydney, New South Wales. Erso's grandfather, a teacher in Palestine, had worked closely with the British forces during World War I, at times passing intelligence on the Ottoman Turk army positions during the battle of Jerusalem. After the war, Erso's grandfather, grandmother and five children (including Erso's father) made their way to Australia, arriving initially in Melbourne in 1919 before moving to Sydney a few months later.

Erso's father, like many immigrants new to Australia, wanted a better life for his children and knew the importance of education. His father owned a furniture business, and the children were expected to help with the business in addition to studying hard at school. Erso lived with his family in the suburbs before moving into town to study with his older brother. Erso attended medical school; his brother studied engineering. While at university, his parents introduced him to Ajda, and a year later the two were married. One year later, the first of their four children was born.

Erso graduated with honors and secured a placement with a large Sydney hospital for his residency internship. While working there, Erso anglicized his name to Edward but often went by Eddie. After working a number of years at the hospital, he went back to school and eventually became a specialized surgeon in orthopedics.

Erso moved into private practice and began to consult on work-related injury claims, including referrals from the state-based Worker's Compensation Agency. He found this work very interesting and learned how minor injuries can have a devastating impact on claimants and their families. However, he found the paperwork and the cap on professional fees a constraint.

On the advice of a colleague who was also a personal friend, Erso decided to undertake plaintiff consultancy. His friend was able to supply him with a reference to a national personal injury solicitor. Initially, work was not as plentiful as he had expected. In a discussion with his friend, he was told that his medical reports read like they were written for the Worker's Compensation Agency and needed to be more “generous and flexible.”

The next report that Erso wrote stated that the claimant had suffered “40 percent impairment to spinal function” and “30 percent of the whole body.” Erso was uncomfortable because he thought the wording was a little over the top. He waited for the lawyers to contact him and challenge it, but they did not. After the generous report, his reputation grew in the personal injury litigation circle. Referrals began coming in regularly, and soon his calendar was booked two and half years in advance.

A Growing Company

Auswide Insurance Limited has offices in all of Australia's capital cities and had been in business for decades. The company offers general insurance products, including home and contents, vehicle, boat, marine and travel. It also offers injury products, such as compulsory third party, public and product liability and life insurance.

Auswide leadership embarked on an aggressive expansion of operations and acquired a number of leading Australasian insurers, including one that offered workers' compensation insurance. After the various acquisitions, the company began a major software and information technology (IT) revitalization because many of its systems were outdated and incompatible.

As part of the expansion, the company grew its special investigation unit (SIU). Then the investigation areas were reorganized and in some states cut entirely. The SIU's headquarters was located in Brisbane, Queensland. It was managed in two sections: the general insurance arm and injury claim arm.

I was hired as a senior investigator in the injury claims unit and oversaw the expansion of the team from three investigators to nine over the next few years. Most of our investigations were involved with claim fraud arising from motor vehicle injuries. However, we investigated all types of claim fraud. Furthermore, to provide Australia wider coverage and to manage the large number of claims, we used the services of a number of external private investigation firms.

Auswide Insurance Limited is one of Australia's largest insurance companies, employing more than 3,500 staff and with an income of more than 3.1 billion.

On a Hunch

It was early Monday morning in October, and I just sat down at my desk and was once again admiring the pristine views of the Brisbane River as I waited for my computer to boot up when I received a phone call. The caller introduced himself as Peter Butler, Investigation Manager of Alpha Insurance. Peter and I had met briefly about a year ago at an anti-fraud conference in Sydney. As at any of these trade events, attendees spent a lot of time networking and handing out business cards.

After some small talk, Peter got down to the reason why he called. “I think there is an issue with one of your claimants . . . truthfully I have no idea if it is one of yours! I am doing the ring-around.” Peter went on to say “I received a call from an orthopedic surgeon whom we use for our workers' compensation claims. The informant went to a seminar in New Zealand, and one of the speakers was an Australian orthopedic surgeon. The informant told me that the speaker was on a compensation claim arising from a motor accident. I got the impression it was more likely to be gossip; you know what these after-5 drinks are like,” Peter said.

I said, “Why go to a seminar and present if you're on a claim?” Thinking a little more about it, I agreed that it was quite strange. I began to shift the various case folders and reports that were stacked on my desk, looking for a pen. “Can you give me the orthopedic surgeon's name?”

“Edward Ahmet,” Peter said.

“Thanks, Peter. I'll make some inquiries and have a look at what we got and I will let you know. It may take a few days.” After I hung up, I sat at my desk for a few minutes and thought about the odd situation. Initially I thought maybe nothing was wrong. Claimants are capable of working even if they are receiving workers' compensation, providing they have told their doctor and us. Actually, we are happy if they do; it means their health is improving, and we will save money. Then I recalled a story of a claimant who was reporting to be on a total disability claim. One of our investigators was watching television one night and realized that an actor in a television advertisement was the claimant! It would not hurt to check.

I opened up the claims database and reviewed all the active personal injury investigations. I decided to start my search by looking for any doctors. We had three listed, but none by the name of Edward Ahmet.

I called Peter back and I asked if we could speak with the informant. He said he would see what he could do. Peter organized a telephone conference with us and the informant, who was not one of the normal complainants we usually heard from (an ex-spouse, neighbor or coworker who was outraged that the claimant was going to get a big disability payment). Rather, this informant was Dr. Gregory Hugo, a respected orthopedic surgeon. Hugo started by saying “It may be nothing, but I think one of the speakers at the September conference is on a claim. There was talk at the conference about Dr. Ahmet's car accident and that he had been in the hospital a couple of years ago. He seemed fine and displayed no sign of injury. There was also some talk among the conference attendees about him working in Melbourne. He could still be on a compensation claim.”

I asked Dr. Hugo if he had a copy of the conference agenda. He said he did and could email it to me. I summarized the information I had and emailed it to Auswide's claims manager, Steven Phillips. I also asked if the claims officers could check their current cases for a claim by Edward Ahmet. Experience taught me to also check on the surname only. I had worked on a number of cases involving Asian claimants who used English first names rather than their own given names. It would not hurt to check.

Paging Dr. Ahmet

Recent mergers with various other insurers resulted in a number of different computer systems that could not “talk” with each other. Indeed, the investigation system was not scheduled to link with the claims data for about three months hence. So it was a long, two-day wait until I received an email from the claims manager with a list of all the claimants by the name of Ahmet. Toward the end of the list was Dr. Erso Ahmet. I thought to myself, this could not be a coincidence!

I emailed the claims officer asking for the case file to be sent through the internal mail. The next day was Friday, and it arrived on my desk at about ten o'clock. I opened the file, which was quite light on detail. The policy had been taken out five years ago. It was what we refer to as a stapled policy, which was developed specifically for those in the medical profession. It included income protection, accident injury and business expense coverage. The income protection policy was designed to cover lost wages for a period of five years. Two years after the policy had been taken out, the claimant was involved in a motor vehicle accident that resulted in him making a claim. A quick review indicated the following payouts:

The income protection account stated that as of October, we had paid $540,000 in claim protection over the last few years.

The file also included copies of Dr. Ahmet's income tax returns, which we require because the policy pays 75 percent of the income earned before the accident. The paid benefit is treated as income. On the income tax return, the doctor claimed business income was nil, and his occupation was listed as “orthopedic surgeon.” My first thought was the doctor had returned to work and not disclosed his employment. But then the name was not an exact match? Could it have been someone else?

I decided that the most effective way to get to the bottom of it was to call the doctor. I looked up the home phone number on the claim and called it. It rang several times and when a man answered, he identified himself as Dr. Ahmet. I explained that I worked for Auswide Insurance and needed to clarify a few details on his claim. We had a general chat about the claim and how he was feeling. He said he was still in occasional pain and on medication for it. I asked if he had attended a conference overseas. Without any hesitation he said, “Yes, in New Zealand.” To me the doctor sounded like he was happy to talk and he was not guarded in his responses. In short, he was asked by an old friend to speak at the New Zealand conference at the last minute when one of the speakers pulled out. He had not contacted his family doctor because the doctor was on vacation and he did not want to meet the replacement physician. Afterward, the conference had slipped his mind. So when he went back to the doctor the other week, he did not report it. He went on to say that the three-hour flight to Auckland was not nearly as long as the flight to Perth he had to make last year to see a specialist. He also told me he used the name Edward professionally because it was easier for people to remember.

I recall hanging up the telephone and thinking that it sounded reasonable. The story was believable, and the doctor did not deny going to the conference. Still, something did not feel right. I thought about how we had paid more than half a million in claims so far. Was he really working? The comments by Dr. Hugo echoed in my mind; surely he must have had some concerns himself.

I entered Dr. Ahmet's name into a Web browser to see what turned up — only one return with the name of Dr. E. Ahmet and the address and business phone number we had on his claim form. I dialed the number, but it was disconnected. I looked at the business address and noted that it was in a specialist medical center. I called the main line and spoke with a receptionist who told me that Dr. Ahmet no longer worked at the center and had not done so for some time. There were no other listings, and he was still living in Sydney. I also checked the white pages for listings in Melbourne but found nothing. Could Dr. Hugo have been wrong? I decided to issue instructions to one of our private investigators for some surveillance. I found myself actually hoping that I was being overly cautious.

Working Thrsough the Pain

Later I received a phone call from the manager of the private investigation firm, who told me that during the surveillance period, Dr. Ahmet boarded flights for Melbourne on three occasions. The manager asked if I wanted someone in Melbourne to pick up the surveillance of Ahmet when he traveled, and I hesitantly agreed. A lot of the time surveillance is hit and miss, but I wanted to see where this would go.

A few weeks later it was mid-December, and I was looking forward to my annual holidays, when an email arrived from the private investigation company. I opened the attachment and read the cover letter. In brief, the report summarized:

• The subject was observed across a four-week period. During this time, he was observed traveling on seven occasions from his residence to the Sydney domestic airport.
• On each occasion, he was observed boarding a flight to Melbourne.
• On three occasions, he was observed leaving Melbourne airport in a taxi.
• The subject was observed entering the foyer and taking the elevator to Level 27 at 140 William Street in Melbourne on two occasions.
• The investigator made inquiries with the reception staff on Level 27 and determined that a Dr. Edward Ahmet had an office on the floor.

It appeared that Dr. Erso Ahmet was working in Melbourne under the name Edward. I realized a number of things. First, we had never conducted a fraud investigation into an income protection claim — most of our resources were focused on injury claims arising from motor accidents. This could be a very resource-intensive investigation. Second, we had never investigated a doctor, let alone a specialist.

I commenced a review of what I knew with the aim to develop an investigative strategy. The claimant was an orthopedic surgeon who lived in Sydney and possibly worked in Melbourne. I made a wide range of inquiries with specialist practices throughout Melbourne to no avail. I thought perhaps Dr. Ahmet was taking referrals only. I knew that he would have to either write reports for insurers or personal injury solicitors, which would result in a paper trail for me to follow.

I put in a request to our IT department to search for all reports with the name “Ahmet.” We had just introduced a policy of scanning reports for personal injury claims, but I was warned that the process was far from guaranteed, as it relied on the claims staff scanning hard-copy reports. I was also told that several departments, including sections of liability claims, had not commenced this practice. Not the most auspicious start to the case.

I returned to work in late January and found out IT finished the report search for “Ahmet”; it found more than 2,000 documents. Then I narrowed the search to medical reports written by “Dr. Edward Ahmet.”

We had received the first claimant report written by Dr. Ahmet nearly three years earlier. Since then he had written almost 600 reports for personal injury solicitor firms. I examined each of the accounts and noted they recorded the doctor's business address as 140 William Street in Melbourne and another at Chiefly Tower in Sydney. Until then I was not even aware that Ahmet was working in Sydney. When I compared the dates with Ahmet's own medical claim, I noted that on several dates that he had reported to his doctor that he was still unfit to resume duties, he had in fact done consulting for personal injury solicitors. I began to calculate the fees he had charged for each of his reports. I diligently entered the fees into a spreadsheet and found they totaled $342,511.

Another shock followed soon. The search picked up all of Auswide's documents with the name Ahmet, and while sorting through them, I found an email and service contract dated four months earlier. Dr. Edward Ahmet had been offered a position on our injury claim panel of surgeons in Melbourne! Amazingly, he was now consulting for us on injuries caused by car accidents. During this time, he charged Auswide $15,000 in consulting fees. In one case, we wrote that he suspected that the claimant was exaggerating the limitations!

I totaled up the undisclosed work and benefits paid to date:

I entered the details of the investigators' reports, surveillance evidence and each of the 600 reports and other documents into our case management system. Once I had collected the evidence, I organized a meeting with Jill Duggan, manager of Legal Services. Jill said, “This is incredible. . . . He has been working for us.” We decided that the next course of action would be to offer the claimant an interview to see if he was willing to explain himself. Jill agreed to be present.

Indisputable Evidence

I called Dr. Ahmet and asked if he could come into our Sydney office next week, and he agreed. On the day of the interview I greeted Dr. Ahmet in the reception area at about 9:30 a.m. and invited him into a conference room. I decided to use this room as it was not as cramped or formal as the interview room. Our interviews are not recorded using audio or video recording equipment; we still managed the interview process the old-fashioned way — writing notes on paper.

Jill greeted Dr. Ahmet, who had arrived alone. I asked if he wanted anyone present. He waved away my concern and said no. Jill and I had conducted interviews together in the past, and, before this one, we had agreed that I would lead it and Jill would take notes. This would allow me to spend my time listening to Dr. Ahmet, asking relevant questions and introducing various exhibits.

I started by asking Dr. Ahmet about his health and how his claim had been managed so far. I then went through the necessary background details, such as name, address, occupation and his signed claim form. I asked him to elaborate on his medical and employment history. I did not want a confrontational interview so I spent time building rapport with him. This was important because, as an insurance investigator, I had no legal power to compel a person to attend or remain in an interview. I needed to foster an environment where he would be willing to tell me his story.

Dr. Ahmet asked if we were checking up on him, and I responded with “Should we be checking up on you?”

He simply gestured to a large number of case folders I had placed on the table behind us. I asked if he wanted to tell us anything before we started, but he said no.

When Jill and I planned the interview, we decided to play the surveillance video first. Normally we use video last, as it often provokes claimants who view surveillance as being spied on. However, since the video did not prove or disprove his injury, we wanted to see where it would take the interview. We played some of the footage taken by our investigators in Sydney.

I asked Dr. Ahmet if he had any comments. He said, “Not really — that suggests I am mobile. I have never said that I am not. It really does not show much at all. I went to the airport, so what?”

I said, “You went to the airport several times in a week.”

“So?” he asked.

I then played the video obtained in Melbourne, including the building he entered. After this I stopped the video, and Dr. Ahmet sat in the chair rather quietly. I reached behind me to the table with the folders, which I had already marked one to ten. I opened folder one and turned to the first medical report Dr. Ahmet had submitted to Auswide as a consultant. Dr. Ahmet put on his glasses on and reviewed the report.

I asked “Who is Edward Ahmet?”

He replied, “It is me.”

I asked, “You wrote this report?” He said yes.

I turned to the next report and showed him the name.

He said, “Yes, that is mine as well.” He went on to ask rather quietly, “Are they all mine?” pointing to the folders behind me.

I said, “All of these folders have reports written by Dr. Edward Ahmet.”

He simply said “Oh,” and looked down.

Next we went through various reports and other evidence. I asked about the Melbourne work, and Dr. Ahmet became agitated. It was the most emotion he showed during the interview. He said he was not being deceptive; it was easier for him to travel to Melbourne to consult for a day and return home. He said he could see four or more patients in the day and go home. Further, he told his family doctor in May of last year that he would like to return to work but was simply not able to work a full day.

I was familiar with the notes made by his family doctor, who had submitted various medical reports throughout the course of the claim. I said to Dr. Ahmet that he had been working but failed to mention this to his doctor or us. Dr. Ahmet said, “Not full time . . . it's nowhere near what I did when I worked full time, not even close.”

Toward the end of the interview, I asked Dr. Ahmet to confirm that he had been working while on his claim. He said, “Yes, I have been working. I simply could not stand sitting at home. A couple of years ago I was approached to do some consulting for a lawyer and then the work just kind of started to flow in.” He went on to ask “Did your investigation start because I was asked to be a panel doctor for your company?”

To my embarrassment, I had to say no. I explained it was because of his presentation at the New Zealand conference. I was curious to find out how he passed the vetting process for our claims area to become a panel doctor for Auswide Insurance Limited. Dr. Ahmet said he submitted all his records, which had his real name, and simply indicated that he was to be referred to as Edward. I was very surprised. No one ever suspected that a claimant would undertake work for us, so we had no internal checks in place. It was that easy.

Before the interview ended, Jill handed Dr. Ahmet a form stating that we would be canceling his insurance policy based on failure to disclose certain facts, namely that he had been working. I advised Dr. Ahmet that we were likely to consider the matter of possible fraud and recovery. He seemed shocked and said there was no way he committed fraud.

Trend Setting

After the interview, Jill and I discussed the matter privately. We considered recovery proceedings and the possibility of running a fraud case as per Australia's Insurance Contract Act. From past experience, we knew it is difficult to prove income protection claim fraud, especially if the injury is not in dispute and the claimant presents well in court. However, this was the first type of fraud we had uncovered involving a medical specialist, and, given the significance, we decided to pursue it.

When the civil trial was about to begin, Dr. Ahmet's lawyer argued that his client had suffered a breakdown and was not fit to undertake a trial. We decided to settle with Ahmet and received partial restitution of $300,000. We were also able to secure our investigation and legal costs.

As a result of this case, a number of other insurers began to review their claims for similar cases, and several frauds were uncovered. In one instance a doctor was convicted and sentenced to jail for three years for committing fraud.

We also took a rare step and approached the state police to pursue criminal fraud charges. In a meeting, Jill and I handed over all our evidence to police, but to my knowledge no progress has been made on a criminal case.

About the Author

Michael King, master's of justice, master's of arts (Justice Administration), bachelor of commerce. Michael has 17 years of fraud investigation experience, four as an insurance and financial fraud investigator with some of Australia's largest insurers and 13 as a compliance officer and fraud investigator for the Commonwealth Treasury. He has published a number of scholarly articles and has also taught within the School of Justice Administration Brisbane North Institute of TAFE and the Australian Security Academy.