A former business office manager at a Massachusetts nursing home pled guilty and was sentenced to jail on August 5, 2021, in connection with stealing tens of thousands of dollars from elderly residents.
The former business office manager pled guilty to charges of larceny over $250 from a person over 60 years old (4 counts), larceny over $1,200 (2 counts), and false entry into corporate books (6 counts). After the plea was entered, the former business office manager was sentenced to two-and-half years in a house of correction, with one year to serve and the balance suspended for four years, during which time she will remain on probation. Additionally, she is to pay $19,050 in restitution to the victims and is prohibited from working in any long-term care facility or acting as fiduciary for anyone 60 years old over. The defendant paid the restitution in full before being taken into custody.
The Massachusettsās Attorney General (AG) began an investigation in early 2020 after the matter was referred by the Massachusetts Department of Public Health (DPH). A healthcare corporation acquired the nursing home in 2017 where the former office manager was employed. The healthcare corporation discovered discrepancies that led to further investigation of the companyās accounting. The AGās investigation revealed that between 2018 and 2019, the former business office manager was running a scheme in which she stole thousands of dollars from an 88-year old resident by writing checks to herself from the residentās personal bank account.
In an attempt to conceal her theft, she typically indicated in the memo line of the checks that it was for the residentās rent at the nursing home, when in fact the money was being deposited into her personal bank account and used for personal expenses. The AGās investigation additionally found that she was writing checks and making electronic payments from the residentās account to her own personal credit card.
The AGās Office investigation further revealed that, to hide the theft from the resident and keep the residentās residential fee up to date, the former business office manager used the reimbursements owed to a number of other residents to pay that fee. When residents of the nursing home or their insurance carriers overpaid the amount due for a particular month, the nursing home would owe the residents a credit that was to be deposited into their accounts at the nursing home, or the facility would give the resident a check for reimbursement. The former business office manager shifted credits from other residentsā accounts and applied them as a payment to the residentās account from which she was stealing to facilitate her scheme.
Additionally, the AGās office determined that the former business office manager made regular false entries into the accounting system and the corporate bools to misappropriate credits of other residents into the account she was stealing from. She was terminated from the nursing home in December 2019.
Issue:
Every nursing facility should have a double check system in place for all monetary transactions. All transactions should be legal and checked and approved by a second party to prevent misappropriation of funds. Misappropriation of funds can result in fines, other sanctions, and imprisonment. Additional detailed information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 2 Financial Integrity.
Discussion Points:
- Review the facilityās policy on accounting and the use of facility and resident funds. Update as necessary.
- Train appropriate staff on your policies for financial accounting and the protection and approved use of facility and resident funds. Document that these trainings occurred and file in each employeeās education file.
- Periodically audit to ensure that all monetary transactions have been double-checked and approved by a second party, and that all transactions have been previously approved. Ensure that an independent audit is conducted at least annually.
