A former Tennessee medical group director, 62, was sentenced to 18 months in federal prison for wire fraud. According to the information presented in court, from 2012 until 2020, she served as the director of risk management at a large medical group and worked at one of its hospitals. During her time there, she developed a fraud scheme that allowed her to steal hundreds of thousands of dollars from the organization.
In May 2020, she stole and attempted to deposit a check made out to the organization into her own account. The check was for more than $146,000. After bank personnel became suspicious, they froze her account and alerted the medical group of her actions. After the matter was referred to law enforcement, it was discovered that beginning in 2017, she had stolen and attempted to steal more than $355,000 over a three-year period, using the hospital’s money to pay personal expenses, finance vacations, and to give to family members.
Following the 18-month prison term, she was sentenced to two years of supervised release and a $100 special assessment. She was also ordered to pay $209,181.47 in restitution to the organization. In imposing the sentence, the Court noted that she had abused the trust of her employer, and the seriousness of her offense warranted a prison sentence.
Issue:
Failure to have a system that uses generally accepted accounting principles (GAAP) with appropriate checks and balances and an annual audit conducted by an independent Certified Public Accounting (CPA) firm, may be considered neglect of the facility’s fiduciary duty to protect residents’ financial assets and the assets of the facility, in violation of state and federal laws.
Discussion Points:
- Review policies and procedures to ensure that a system of checks and balances is in place to prevent one person from being able to both approve invoices and write checks, and further embezzle funds.
- Train staff involved in the facility’s accounting and billing departments to be aware, to question, and to report to their supervisor or through the Hotline any reasonable suspicion of criminal behavior.
- Periodically audit the facility’s and residents’ financial accounts, company invoices, bank statements, and credit card accounts to discover possible misuse and embezzlement of funds. Immediately address any potential concerns.
