Dirty Teeth: Health Scandal Could Be Biggest in German History

A scandal involving fraud and dental prostheses is threatening to become a disaster of epic proportions for Germany's much-maligned health system.

For the past 15 months, a dental lab in Mülheim in North Rhine-Westphalia reportedly cheated several statutory health funds out of at least €50 million ($50 million) by importing cheap dental protheses from China, officials say.

Tip of the iceberg

According to investigators, the company, Globudent, then presented them as products made in Germany and charged the health funds the usual local rate, which is five times higher.

In a statement faxed to DW-WORLD, the company denied all charges, describing the allegations as "unfounded," and said prosecutors had not been able to prove any of the claims.

Oliver Giebel, press spokesman with the Lower Saxony branch of AOK, one of the country's biggest health funds, told DW-WORLD this was just the tip of the iceberg. "We estimate that there are other companies involved in countries like Thailand, Manila, Hungary and Poland and that the amount could become a three-digit figure in the millions."

Biggest post-war scandal?

The AOK says the affair could become the biggest post-war case of fraud within the German health system.

And it is all the more damaging considering Giebel's allegation that at least 2,000 dentists are involved who have accepted kickbacks for agreeing to use the cheaper Chinese imports.

"It all began around 15 months ago after a dentist in Braunschweig was approached by a Glodudent employee, an attractive female rep, with a business proposition," Giebel recounted.

The dentist and the company then agreed to terms with the former making a 20 percent profit on the substitute protheses.

Raking in profits

A set of prothesis costs around €900, but Globudent only paid a fraction of that price, €180, to its Chinese business partners. The remaining €720 were divided between Globudent and the dentists involved in the fraud.

Giebel says that several dentists have gone one step further and set up their own dental lab, raking in much higher profits.

Prosecutors said on Thursday that four Globudent managers had been arrested and were due to appear in court.

So far reports that the quality of the cheaper products could pose a health hazard have not been confirmed. Globudent insists that, more often than not, the quality is higher than in Germany.