US Attorney Jane E. Young announced that a former New Hampshire woman pleaded guilty in federal court to charges related to defrauding her former employer. The defendant, 55, now residing in Albuquerque, New Mexico, pleaded guilty to federal wire fraud charges. US District Judge Samantha Elliott scheduled sentencing for February 26, 2025.
According to statements made in court and from the public record, the defendant was a long-time employee of a Bedford, New Hampshire-based medical group specializing in obstetrics and gynecology until the practice closed in early 2023. Beginning in 2020, the defendant became the office manager and was responsible for processing payroll through a third-party service.
Taking advantage of the trust placed in her, the defendant manipulated the payroll system by logging into the third-party service and altering her pay rate to a higher amount than what she was entitled to. Over the course of approximately three years, the defendant unlawfully obtained these ill-gotten gains.
The charges carry a maximum sentence of 20 years in prison, three years of supervised release, and a fine of up to $250,000. As part of her plea agreement, the defendant has agreed to pay restitution in the amount of $168,366.66.
Compliance Perspective
Issue
Failure to implement generally accepted accounting principles (GAAP) and establish appropriate checks and balances in a nursing facility can constitute neglect of its fiduciary duty, potentially violating state and federal laws. A proper system should ensure that all monetary transactions and supply purchases are verified and approved by a second party to prevent misappropriation of funds, which could lead to fines, sanctions, or imprisonment. To minimize the risk of fraud, payroll responsibilities should be divided between at least two individuals, ensuring no single person is responsible for processing, disbursing, and distributing payroll.
Discussion Points
- Regularly review your payroll policies and procedures to ensure they align with current regulations and best practices. Update them as necessary to address any gaps or changes in law or business operations.
- Provide training for relevant staff on your policies for financial accounting, as well as the protection and approved use of facility and resident funds. Ensure that training on these procedures is documented, with signed acknowledgements filed in each employee’s education file.
- Periodically audit the payroll process to verify its accuracy and ensure compliance with established procedures. Specifically, audit to ensure that all monetary transactions have been double-checked and approved by a second party. Use these audits to identify potential issues and implement corrective actions as needed.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
