Insider busted for social insurance scam in Vietnam

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Labor authorities in southern Vietnam has requested a probe into a scam which sought out pregnant women in order to claim postnatal insurance on their behalf.

The Vinh Long Social Insurance Department in the Mekong Delta said the operation, disguised as the Online Communication Company, was based in Can Tho and had many offices across the delta, including Vinh Long.

It was created by Doan Van Cuong in December 2010, who left the Can Tho social insurance department in 2007 with insider knowledge of the industry's rules and loopholes.

Huynh Thi Ngoc Linh, director of the Vinh Long Social Insurance Department, said the department discovered the scam after it received documents from Cuong's company asking for postnatal assistance worth VND119.5 million (US$5,730) for five "employees."

The unusual thing was that all five women had their insurance paid for six months, exactly the limit required by the law, Linh said.

Vietnamese law allows women to receive four months salary as a postnatal assistance from social insurance as long as they had fully paid social and health insurance premiums and contributed to unemployment subsidies for at least six months prior to giving birth.

Investigations by the Vinh Long department uncovered that the women had not in fact worked for the company.

Cuong merely used their personal information to make them look like his employees, paying them VND4 million (US$193) each for their cooperation.

Pham Thi B., a woman approached by the company in Tra Vinh Province, said she agreed to let Cuong use her information as his offer was too good to refuse.

"I didn't have to work, and the company would pay everything, the insurances and the unemployment subsidies. It was so easy so I agreed," B. told news website VietNamNet in a Wednesday report.

Cuong's scam netted him at least VND110 million in Tra Vinh Province between March and July last year, before it was busted by the Vinh Long agency five months ago.

The company has not paid taxes or social insurance premiums since, and their offices have been abandoned.

The company's listed phone numbers as well as those of Cuong and his office heads did not work.

Nguyen Trong Nam, an inspector from HCMC Social Insurance Department, said the scam brought the company "super profits" from little investment in six months.

According to Vietnam's Penal Code, if convicted, Cuong could face a sentence of between two and seven years in jail as the total funds he acquired through fraudulent means ranged between VND50 and 200 million.

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