The former office manager of a Georgia chiropractic office was sentenced to serve more than five years in prison after a federal jury found her guilty of committing bank fraud and other federal crimes in an embezzlement scheme that cost an established spinal center more than $200,000 in losses and resulted in its closure.
The defendant was sentenced on October 9, 2024, to serve 66 months in prison followed by three years of supervised release. In addition, she must pay $298,042.72 in restitution to the physician who owned the spinal care center. She was found guilty of one count each of bank fraud, wire fraud, and federal program theft following approximately one hour of deliberations by a federal jury on June 27, 2024. There is no parole in the federal system.
According to court documents and evidence submitted at trial, the defendant’s company was hired in Sept. 2019 under a one-year contract to perform marketing work for the spinal care center. In May 2020, the defendant was hired as office manager at the center, and her new salary included marketing work. She was given signatory authority over the center’s bank account and was responsible for issuing and signing all biweekly payroll checks, including her own.
The defendant collected her salary as office manager and, without the authorization of the center, continued to write and endorse checks to her business for extensive marketing work totaling more than $200,000. In addition, she gave herself an unauthorized pay raise and used money from the center’s bank account to purchase $11,015.67 worth of items from the Apple store that she shipped to her residence.
When she quit on December 19, 2022, none of the Apple items could be located at the center, but some were found inside her home when federal agents executed a search warrant on May 4, 2023. A portion of the embezzled funds came from COVID-19 Federal Economic Disaster Loans (EIDL) directed to aid the center.
Compliance Perspective
Issue
Failure to implement generally accepted accounting principles (GAAP) and establish appropriate checks and balances can constitute neglect of the facility’s fiduciary duty. This neglect may jeopardize the protection of residents’ financial assets and those of the facility, potentially violating state and federal laws. Every nursing facility should have a system in place to ensure that monetary transactions and supply purchases are properly verified and approved by a second party to prevent misappropriation of funds, which can lead to fines, sanctions, and imprisonment.
Discussion Points
- Review policies and procedures to ensure a system of checks and balances is in place, preventing any single individual from both approving invoices and writing checks, thereby reducing the risk of embezzlement.
- Provide training for staff in the accounting and billing departments to recognize, question, and report any reasonable suspicion of criminal behavior to their supervisor or via the Hotline.
- Conduct periodic audits of the facility’s and residents’ financial accounts, company invoices, bank statements, and credit card accounts to identify potential misuse or embezzlement. Address any concerns immediately.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
