On July 9, 2024, Brooklyn District Attorney Eric Gonzalez and New York State Inspector General Lucy Lang announced that an emergency medicine doctor had been charged with grand larceny and other crimes for allegedly stealing approximately $1.448 million by using a business credit card for personal purchases and cash advances.
The defendant, a medical doctor, was the chairman of emergency medicine at a medical center and at various points was the acting head of a hospital and medical school, and was the chief medical officer. From December 1, 2016, to January 31, 2023, he allegedly made personal purchases using a credit card designated solely for business use by clinical practice members of the medical center.
The District Attorney said that, according to the investigation, the defendant’s spending totaled approximately $1.448 million and included cash advances of approximately $115,000; pet care totaling $176,000 (including $120,000 paid to a pet resort in New Jersey); $348,000 spent on personal travel; $109,000 in payments to a sports club in New York for membership and personal training; $52,000 in catering expenses; $46,000 in tuition payments for his children; and assorted payments for online shopping, flowers, liquor, electronics, and other items.
The alleged thefts were discovered by the medical center during an audit. The defendant was arraigned on a nine-count indictment in which he was charged with first- and second-degree grand larceny, first-degree falsifying business records, and third-degree criminal tax fraud. He was released without bail and ordered to return to court on September 25, 2024.
Compliance Perspective
Issue
The Centers for Medicare & Medicaid Services (CMS) requires skilled nursing facilities to have a compliance and ethics program that is effective in preventing and detecting criminal, civil, and administrative violations under the Social Security Act, and in promoting quality of care. Every nursing facility should have a double check system in place for all monetary transactions, and all transactions should be reviewed and approved by a second party to prevent misappropriation of funds. Routine audits should be conducted at each facility on monetary transactions and the results of the audits should be reported to the compliance and ethics committee and to the governing body. The audits should have a corrective action plan to address any identified discrepancy, and all discrepancies should be investigated and rectified immediately.
Discussion Points
- Review your policies and procedures for operating an effective compliance and ethics program. Also review the facility’s policies and procedures on accounting and the use of facility and resident funds. Update as necessary.
- Train all staff on your compliance and ethics policies and procedures upon hire and at least annually, including their responsibility to identify and report any concerns of fraud, waste, or abuse of funds in a timely manner. 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 the signed document in each employee’s 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. Also audit staff understanding to ensure that they are aware of the steps that should be taken if they suspect theft, and their reporting options, including the use of the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
