kzn doctor fined R1m for fraud 
Posted 21 December 2006 

A Durban doctor was fined R1-million (or 15 years in prison) in the Durban magistrate's court on Wednesday after pleading guilty to 207 counts of Road Accident Fund (RAF) fraud and one charge of racketeering.  This was highest fine of its kind in a magistrate's court in the country and the first conviction in an RAF racketeering case.

Devandra Perumal, 44, pleaded guilty to defrauding the fund in KwaZulu-Natal to the tune of R3,8-million between March 14 2000 and July 9 2002 through his enterprise which he conducted through a pattern of racketeering activities.

He submitted false claims to the fund, which included claims that people had sustained injuries in accidents when they had not. Perumal also certified medical documents for submission to the fund without examining the claimants.

The state argued in aggravation of sentence that the fund was losing millions of rands annually as a result of people, like Perumal, who lodged fraudulent claims.

The state further argued that such actions should be viewed in a serious light as they could potentially bankrupt the fund and place in jeopardy the interests of other law-abiding members of society who might have genuine claims.

The defence and state reached an agreement that Perumal would pay a fine of R1-million or face 15 years in prison.

A further 15 years was suspended for five years on condition that he is not convicted of racketeering, fraud or theft.

He was also ordered to pay the fund a further R23 424.19 which, according to evidence, was the amount by which he personally prejudiced the fund.

Magistrate Moon Lalbahadur told Perumal that his first payment of R500 000 must be paid by March 31 next year.  He must then pay instalments of R68 000 by the same date in 2008, 2009 and 2010, and R148 000 in 2011 and 2012.

Half of the fine will be paid to the fund, one quarter will be paid to the road safety campaign Arrive Alive and the final quarter will be paid to the clerk of the court at the Durban magistrate's court.

The magistrate said the offence was very serious because it was premeditated.  "The legislature views this offence in a very serious light . . . This offence was committed from greed rather than need," the magistrate said.

"The RAF was created by authorities to serve a specific purpose and it is time that people realise the RAF serves those who need it."

The magistrate said he had dealt with many cases involving professionals and often asked why such people needed to resort to crime.  "I hope this sends a message that those who are convicted are not going to get away," he said.  State attorney Barend Groen said this was the first racketeering conviction involving the fund in the country and the highest fine imposed in such a matter in the country.

"We have worked on this matter since August last year and there have been hundreds of convictions involving claimants, but this is the first big fish," he said.

Three other doctors who were Perumal's co-conspirators have yet to go on trial.  "We hope this is a deterrent to others with similar ideas,"Groen said .

He said that the case was a good combined effort by the fund, the South African Police Service and the Directorate of Public Prosecutions. Perumal will still have to face the Health Professions Council of South Africa, where he could face further sanctions.

Carvin Goldstone, This article was originally published on page 1 of The Mercury on 21 December 2006