On October 30, Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that a federal grand jury in New Haven had returned a 17-count indictment against a Waterbury woman for various fraud offenses.
According to the indictment, from approximately 2018 to May 2021, the defendant was employed as a Medicaid Coordinator at an assisted living facility in Stamford, referred to as “Company A.” In this role, she assisted residents with applying for nursing home-level Medicaid reimbursements, monitored their patient trust accounts, and ensured compliance with Medicaid regulations. She was also responsible for maintaining journal entries for these accounts, including crediting and debiting funds as needed.
It is alleged that between December 2019 and May 2021, the defendant defrauded Company A and its residents by generating checks from the facility’s system, forging a fellow employee’s signature, and negotiating these checks. She purportedly provided cash proceeds to certain residents while keeping the funds for herself. To conceal her actions, she made false entries in the accounting ledger, debiting the fraudulently obtained cash from residents’ trust accounts. Many residents were unable to track their own expenses due to health or cognitive limitations.
Additionally, the indictment alleges that the defendant canceled residents’ supplemental health insurance coverage but continued to deduct funds from their trust accounts for her personal gain. When residents’ accounts received Economic Impact Payments (COVID-19 stimulus payments), she took those funds and debited their accounts at approximately $60 per day until the payments were exhausted.
The indictment further alleges that during her scheme, the defendant fraudulently negotiated approximately 500 checks. When confronted by family members of residents, she provided them with false account statements misrepresenting the balances in those accounts.
The indictment also includes allegations that between May and July 2023, while employed as a bookkeeper at a law firm in Hartford, referred to as “Company B,” the defendant issued fraudulently generated checks drawn on the firm’s bank account. She forged an authorized employee’s signature and cashed the checks, falsely recording them in the company’s books as “Petty Cash.”
Overall, the defendant is accused of stealing more than $200,000 through these fraudulent schemes. The indictment charges her with five counts of wire fraud, each carrying a maximum term of imprisonment of 20 years, and 12 counts of bank fraud, with a maximum term of 30 years for each count.
Compliance Perspective
Issue
F602 in the State Operations Manual, Appendix PP, states that residents have the right to be free from abuse, neglect, and misappropriation of resident property. Every nursing facility should have a double check system in place for all monetary transactions, with all transactions reviewed and approved by a second party to prevent misappropriation of funds. Facilities are required to report any allegations of misappropriation or exploitation of a resident’s funds or personal property to local authorities and the state agency. Misappropriation of funds can result in fines, other sanctions, and imprisonment.
Discussion Points
- Review the facility’s policies and procedures on accounting and the use of facility and resident funds. Update as necessary.
- Train appropriate staff on financial accounting policies and the protection and approved use of facility and resident funds. Document these trainings and file them in each employee’s education file. Educate residents and their representatives at Resident and Family Council meetings or through newsletters and bulletin board postings about the importance of regularly monitoring bank and credit card statements and keeping cards secure.
- Periodically audit to ensure that all monetary transactions have been double-checked and approved by a second party, including those accessing resident funds. Conduct an independent audit at least annually. Additionally, assess staff understanding of the procedures to follow if they suspect theft, including their reporting options, and the use of the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
