Allegations of embezzlement exceeding $3 million have surfaced at the Fertility Society of Australia and New Zealand (FSANZ), just days before a crucial meeting of Australia's health ministers. The revelations were made during the society's Annual General Meeting, attended by numerous members, including prominent IVF doctors and researchers.

The suspected fraud reportedly occurred between 2018 and 2023. A trusted external contractor allegedly transferred funds into a personal bank account, mislabeling them as "supplier expenses." This incident raises significant concerns about the internal controls of the Fertility Society and its capacity to regulate the competitive IVF sector, which generates approximately $800 million annually.

This incident is the latest in a series of troubling events within Australia's fertility sector, which has faced scrutiny due to various errors and cover-ups by major IVF clinics. The FSANZ oversees the Reproductive Technology Accreditation Committee (RTAC), which is under increasing pressure to be dissolved due to concerns over its transparency and independence.

A "rapid review" of IVF regulation is underway, with a report expected to be presented to health ministers on Friday. Federal Health Minister Mark Butler acknowledged last week that "self-regulation isn't working," following reports of a mix-up involving a Brisbane couple who received the wrong sperm.

Despite discovering the alleged fraud over a year ago, the Fertility Society has not yet reported the matter to law enforcement. In a statement, the organization indicated it is pursuing legal action related to the alleged financial misconduct. "At no time has FSANZ been at any risk of insolvency," the statement read. The society is seeking to recover $3,122,731 and is receiving legal advice on how to preserve assets to compensate for the losses.

The society's financial report identified the individual involved and noted that while some transactions may have been legitimate, their validity is uncertain. The contractor had worked with the Fertility Society both as an employee and as an independent contractor. When approached for comment, the individual stated they were unaware of any allegations being disclosed at the annual conference and declined to provide further remarks.

Court documents reveal that preliminary legal action was initiated in May of the previous year as the board attempted to assess the extent of the suspected fraud. The missing funds were uncovered under the leadership of current president Petra Wale, who had only recently assumed the role. The society's lawyers have demanded access to the former contractor's financial records dating back to 2005.

Chris Douglas, a financial crime consultant and former Australian Federal Police officer, emphasized the seriousness of the allegations. He stated, "If true, the amount involved and period of alleged offending call into question the quality of the internal controls at the Fertility Society. Being an accreditation body, it must operate at the highest standards and that includes all aspects of corporate governance."

Douglas also raised concerns about the organization's ability to safeguard confidential information if it cannot prevent internal fraud. He noted that the public, especially those seeking IVF services, would have valid reasons to feel apprehensive.

In response to the situation, FSANZ reiterated its commitment to supporting the fertility sector and maintaining high standards of care for patients.