Fertility Society rocked by allegations of $3m fraud as D-day looms on regulator's future
The Fertility Society of Australia and New Zealand funds and runs the industry regulator, the Reproductive Technology Accreditation Committee. (Adobe Stock)
In short:
A person who worked as an external contractor to the society is suspected of transferring amounts totalling more than $3 million into a personal bank account between 2018 and 2023, disguised as "supplier expenses".
The Fertility Society is yet to report the matter to police, but launched preliminary legal action last year.
What's next?
A review of the IVF regulator, which is funded and run by the Fertility Society, will be considered by Australia's health ministers on Friday.
Shocking allegations of embezzlement at the fertility industry's peak body have been revealed just days before Australia's health ministers meet to decide the future of how the organisation self-regulates the IVF sector.
Details of a suspected fraud totalling more than $3 million was disclosed for the first time on Monday night at the annual general meeting of the Fertility Society of Australia and New Zealand (FSANZ), which was attended by dozens of members including high-profile IVF doctors, scientists and researchers.
The millions allegedly went missing between 2018 and 2023 when a trusted person who worked as an external contractor for many years transferred funds into a personal bank account disguised as "supplier expenses".
The allegations raise serious questions about the Fertility Society's internal controls and its ability to adequately regulate the fiercely competitive and profitable IVF sector which generates an estimated $800 million annually.
It is the latest shock revelation to emerge from Australia's fertility sector following a series of devastating errors, mix-ups and cover-ups by major IVF clinics.
The Fertility Society funds and runs the industry regulator, the Reproductive Technology Accreditation Committee (RTAC), which is under mounting pressure to be abolished due to its perceived lack of transparency and independence from industry.
A "rapid review" launched in June will deliver its report on the future of IVF regulation to Australia's health ministers on Friday.
Federal Health Minister Mark Butler admitted last week that "self regulation isn't working" after ABC Investigations reported an IVF mix-up in which a Brisbane couple received the wrong sperm and were then silenced by Queensland Fertility Group.
Federal Health Minister Mark Butler. (ABC News: Ian Cutmore, file photo)
Society considering taking legal action to claw back money
More than a year after discovering it may have lost more than $3 million, the Fertility Society has yet to report the matter to police.
In a statement, it told the ABC that the company was taking legal action "in relation to alleged historical financial misconduct".
"At no time has FSANZ been at any risk of insolvency," its statement said.
"As we are in the process of taking legal action, we cannot comment further."
The society's own financial report named the person involved and said it was receiving legal advice on potentially clawing back $3,122,731 from them "including measures to preserve assets sufficient to compensate for the losses incurred".
The report said some transactions for expenses may have been legitimate but their "validity remains uncertain".
The person worked for the Fertility Society first as an employee of an external contractor and, more recently, as an independent contractor.
ABC Investigations spoke to the person involved. They said they were not aware any allegations were being disclosed at the society's annual conference.
They declined to comment on the allegations.
Court documents show that the society launched preliminary legal action in May last year in Victoria's County Court as the board struggled to piece together the magnitude of the suspected fraud.
The missing money was discovered under the current president, Petra Wale, who had only been in the role a few months.
Lawyers for the society issued a discovery demand for the former contractor's credit card and bank statements dating back to 2005.
Financial crime consultant and former Australian Federal Police officer Chris Douglas told the ABC that the allegations were very serious.
"If true, the amount involved and period of alleged offending call into question the quality of the internal controls at the Fertility Society," he said.
"Being an accreditation body, it must operate at the highest standards and that includes all aspects of corporate governance."
He said it raised the question of how the organisation could be trusted with confidential information if it could not prevent internal fraud from occurring.
"The public, particularly people seeking IVF services, would be justified in feeling concerned," he said.
In a statement, the FSANZ said it "continues to support the fertility sector, to drive improvement and uphold high standards of care for patients".
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