K375M fraud fears at health

Ministry of Health is feared to have lost about K375 million to electronic fraud purportedly at the hands of a foreign agent who operated its Health Services Joint Fund (HSJF).

The funds were meant to cover for emergency procurement of supplies to prevent the spread of Covid-19.

Three donors, namely Germany, United Kingdom and Norway contributed resources to the fund and, according to documentation, the account has since been suspended, a development that may lead to suffocation of some operations.

The fraudsters are alleged to have hacked e-mails of some officials running the fund and an agent, identified as DT Global International Development USA Ltd, ended up authorising payment of 327 000 euros to a newly opened account.

In a brief response to a written questionnaire, Ministry of Health Principal Secretary Samson Mndolo on Tuesday said the matter was being handled by the office of Attorney General (AG) Thabo Chakaka-Nyirenda.

The AG, according to our sources at the Ministry of Health, has since written a demand letter to DT Global International Development USA Ltd to reimburse Ministry of Health, including legal collection costs, or risk a legal action.

The documents we have seen further show that DT Global International want the AG to rescind his demand letter because the firm has launched investigations into the matter.

Nyirenda yesterday refused to comment on the matter.

But the sources said the ministry sought a legal opinion from him last month regarding the stolen funds and that the AG provided the opinion and committed to take up the matter.

The documents further reveal that the ministry was swindled through authorised push payment fraud to its programmes under HSJF.

The authorised push payment fraud is where fraudsters trick their victims into willingly making large bank transfers to them.

HSJF operates a bank account with First Capital Bank in Malawi, the documents show.

DT Global, the fiscal agent, was contracted to provide financial, fiduciary and procurement oversight services while Management4Health, a Germany based firm, was contracted to provide technical support on infrastructure, procurement and programme management.

Since July 2019, the team of Management4Health, among others, has supported the Ministry of Health in developing an Emergency Response to prevent the spread of Covid-19 by preparing for an emergency procurement of supplies through Unicef.

The programme mobilises Covid-19 supplies, equipment and pre-position them, equipping the infectious disease treatment centres and quarantine units, and strengthening laboratory capacities to detect Covid-19.

The role of DT Global included managing the project’s finances and management of bank accounts.

The documents show that Susanne Manns, a German, is the director of operations for Management4Health and her official e-mail was allegedly hacked by fraudsters who interfered with a chain of e-mail communications between herself and a Mr. Eudosia Andoh.

Andoh is a Ghanaian who serves as team leader for the DT Global.

The fraudsters, the documents show, provided Andoh with instructions and new banking details for the Management4Health to use the said banking details when processing fresh payments.

The original bank details were for Frankfurter Sparkasse, a bank domiciled in Germany where the Management4Health is based while the new bank details were in respect of TSB Bank, a bank domiciled in London.

The fraudsters succeeded and the funds, according to the documents, ended up into the wrong account. The Ministry of Health did everything right, the documents show.

The development partners have since halted all payments from HSJF pending information on how the stolen funds would be refunded, the documents show. The donors also require a new standard operating procedure to avoid recurrence of the incident.

The donors have further demanded that the defrauded amount should not be paid back through the HSJF.

The documents show that DT Global transferred the money to a person called Bronislaw Glowacki when the fiscal agent never dealt with the said Glowacki before.

The documents show that thousands of people would be harmed in Malawi because the fraudsters who stole these scarce funds are preying on a vulnerable situation.

In a letter dated June 5 2023 by DT Global addressed to the AG, it states that the firm was conducting an investigation into the facts and circumstances surrounding the allegations raised in his letter of demand.

Reads the letter signed by the firm’s general counsel Merelyn Aked: “Our investigations involve multiple donors, several banks and various…parties, and are presently at a preliminary stage.

“We also consider the timing of the letter of demand to be rather unfortunate and somewhat premature. DT Global would prefer to work together with your client and the other parties involved…to resolve this matter, in a timely manner to the satisfaction of all parties.”

DT Global requested the AG to consider withdrawing the letter of demand to enable them time to complete their preliminary investigation in four week’s time.