Taipei doctor indicted for decades-long, multi-million dollar fraud

Taipei, Sept. 4 (CNA) A Taipei Veterans General Hospital (TVGH) doctor was indicted by prosecutors Thursday for conspiring with medical device manufacturers to charge TVGH for fake purchases, with them jointly defrauding the hospital of nearly NT$30 million (US$978,053).

According to the indictment by the Shilin District Prosecutors Office, the doctor, surnamed Cheng (鄭), oversaw administrative matters at TVGH's Neural Regeneration Center, and was also a professor at National Yang Ming Chiao Tung University.

Between 2002 and 2023, prosecutors said, Cheng instructed a lab scientist, surnamed Chang (張), to enter into fake procurement contracts with a couple, surnamed Yu (余) and Chu (朱), who ran a medical device company.

For smaller purchases, Cheng and Chang would inflate the bill with items they did not actually need or intend to receive.

Yu and Chu's company would comply by providing an invoice but not shipping the items. Cheng and Chang would then falsely claim receipt of the items, while all the suspects divvied up the funds disbursed by the hospital, the indictment said.

Prosecutors said Cheng and Chang also intervened to help the company win long-term contracts, providing additional opportunities for fraud.

In total, the suspects submitted at least 38 fake procurement claims, defrauding the hospital of NT$28.11 million, the indictment said.

Using similar techniques, Cheng and Chang also embezzled NT$5.65 million in research funding from the National Science and Technology Council, the indictment said.

Prosecutors estimated that Cheng and Chang used at least NT$6.39 million of the illicit funds to pay credit card bills, while also spending the money on vehicles, stocks, insurance policies, shopping and travel.

The fraudulent activity was ultimately uncovered after a source within the hospital tipped off the Ministry of Justice's Agency Against Corruption, which transferred the case to Shilin prosecutors for investigation.

In the indictment Thursday, prosecutors charged the suspects with crimes including aggravated fraud under the Criminal Code, violations of the Anti-Corruption Act, and causing a public official to make a false entry in an official document.

The indictment noted that Chang, Yu and Chu all admitted their crimes during questioning, and Chang voluntarily paid back her illicit gains.