Enrique Peña Nieto's administration diverted millions allocated to the health sector to shell companies

Amid the COVID-19 pandemic, it has become evident that Mexico lacks equipment, facilities, and staff to face the public health emergency 

Enrique Peña Nieto's administration diverted millions allocated to the health sector to shell companies
During the previous administration, a massive fraud took place at the IMSS, when public funds were diverted to shell companies - Illustration by Dante de la Vega
English 05/05/2020 15:23 Zorayda Gallegos Mexico City Actualizada 15:56
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During the previous administration, a massive fraud took place at the IMSS, when public funds were diverted to shell companies that allegedly sold ventilators, uniforms, and medicine to the health institute; however, the Tax Administration Service (SAT) determined that the operation was a simulation because these companies didn’t have employees or the necessary infrastructure to fulfill the contracts. 

Between 2014 and 2018, the Mexican Social Security Institute (IMSS) hired 133 shell companies and paid them MXN $320.9 million to strengthen the hospitals’ infrastructure, which is now facing COVID-19

The majority of the resources were allocated to the fictitious purchase of 15 ventilators; 250,000 surgical uniforms; 80,377 isolation gowns;  114,746 sheets and bed covers for hospital beds, as well as hundreds of surgical instruments, medical equipment, and articles such as needles, medicines, and gauzes. 

The information presented in this article is the result of the analysis of the information released by Impunidad Cero y Justicia Justa, in a study titled “False invoices: the epidemic in the health sector.”

The investigative journalism team searched for information in regards to the 133 shell companies at CompraNet and the IMSS’ website. 

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Embezzlement at the health sector 

In March, Impunidad Cero y Justicia Justa revealed that between 2014 and 2018, state and federal health authorities diverted MXN $4,179 million to shell companies. The IMSS was the second most affected institution. During this period, several men led the institute: José Antonio González Anaya (2012-2016), Mikel Arriola (2016-2017), and Tuffic Miguel (2017-2018). After journalists reviewed the purchases made by the IMSS to shell companies, they discovered that the supplies allegedly bought by the institute are needed to fight COVID-19. 

In 2017, a contract was signed with Interacción Biomédica for MXN $4.7 million to allegedly purchase 9 ventilators. Each ventilator was sold at MXN $532,652. Furthermore, the contract was signed on November 28, four months after the SAT declared it was a shell company and its name was published on the Official Gazette. 

When the SAT includes a company in the shell companies list, it means it followed a procedure and allowed the company to present evidence and explain the situation; nevertheless, the company couldn’t dismiss the accusations. Therefore, authorities found that the company issued tax receipts without having the necessary resources, employees, infrastructure, or capacity to fulfill services or produce and commercialize the products included on the receipts. However, a year later, the IMSS in Michoacán granted the company another contract for MXN $2.3 million. 

Between 2017 and 2018, Biomédica sold more ventilators and medical equipment to the IMSS for MXN $10.7 million. The purchase included radiating heat cribs, electromyographs, and vital signs monitors.

Furthermore, this company also signed contracts with the ISSSTE and other state health institutions. For example, the company signed a contract with the state of Mexico for MXN $1,474 million.

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Embezzlement at construction projects

Tradeco Urbana, a shell company under Grupo Tradeco, benefitted from the simulated operations the most. Moreover, during Felipe Calderón’s administration, Grupo Tradeco benefitted from the construction of the Baluarte Bicentenario bridge, the tallest one in Latin America. 

In late 2013, Tradeco Infraestructura, along with Tradeco Urbana, was awarded a contract for MXN $447.6 million for the construction of a hospital in Jesús María, Aguascalientes but after several delays in the construction, the IMSS canceled their contract in 2015.

In November 2015, the ISSTE awarded Tradeco Infraestructura and Grupo IGSA a contract for the construction of a hospital but it was later canceled and Tradeco Infraestructura was banned from working for the government for the next 30 months.
Now, it’s been revealed that between 2014 and 2015, the IMSS paid MXN $147 million to Tradeco for the construction of a hospital in Aguascalientes. In October 2017, the SAT determined that Tradeco Urbana issued tax receipts in relation to inexistent operations. 

Arquitectura e Ingeniería Celsus is another shell company that allegedly did construction work in rural hospitals in Oaxaca. The company was awarded three contracts for MXN $690,000. Ax Servicios y Concesiones allegedly renovated operation rooms in a hospital in Ciudad del Carmen, Campeche.

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Essential supplies

The supplies that likely didn’t arrive at the hospitals because they were purchased from shell companies include 12 defibrillators with ventilatory assistance, four portable aspirators, wheelchairs, nebulizers, hospital beds, incubators, and goggles. 

At least MXN $14.6 million transferred to shell companies were allocated to the purchase of medical equipment for ER areas. 

Additionally, several companies issued invoices for MXN $7.2 million but in the end, the invoices were invalid for the acquisition of equipment such as forceps, scrapers, clamps, tissue separators, trays, metallic containers, scissors, and prongs.

The health sector also allocated MXN $3.5 million for the alleged acquisition of medicines and healing material such as syringes, compresses, alcohol, gauzes, cotton, elastic bandages, patches, antiseptic, and surgical masks. 

Also, authorities diverted MXN $33.1 million for the purchase of hospital clothing; MXN $21.7 million for bedding, and MXN $3 million for mattresses. 

Hinfra is the shell company that benefited the most from the contracts to purchase hospital clothing. In 2017, the IMSS paid the company MXN $24.7 million for surgical uniforms, as well as MXN $11.7 million for isolation gowns. However, in 2016, the Superior Audit Office (ASF) warned that the company previously simulated operations. Additionally, Hinfra is involved in the alleged embezzlement of MXN $12 million in Chihuahua and the state’s Attorney General’s Office revealed Jesús Manuel Esparza Flores, a former state auditor accused of fraud, awarded a contract to the company for services it never fulfilled. 

Hinfra, a company created in Puebla in 2013, is the second shell company that benefited the most from the contracts awarded by the IMSS. In total, it allegedly sold supplies for over MXN $60 million to the health institute

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Simulated maintenance

The IMSS also diverted MXN $44.6 million, which were allocated for maintenance services in hospitals; however, the companies that were awarded the contracts were shell companies too. 

In 2014, the institute paid MXN $5.6 million in maintenance services to Comercializadora Radchen

In 2016, the IMSS in Nuevo León awarded Grupo Global de Negocios a contract for MXN $2.3 million for the maintenance of forklifts. In addition, it spent MXN $8.5 million for the purchase of therapeutical articles and sports jerseys. 

In its investigation, EL UNIVERSAL found that at least 61 people were involved in the embezzlement case. 

Denise Tron, an investigator working for Justicia Justa, explains that these shell companies operate in two different ways: some simulate their activities and use false addresses, while other combined simulated and real operations. 

Tron adds that “We’re realizing, with coronavirus, that we don’t have a healthcare system that can face and treat people as we would expect.”

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