On August 6, an Oklahoma woman who defrauded more than eight million dollars from a hospital was sentenced to 49 months in prison, followed by three years of supervised release. She was also ordered to pay $8,293,611 in restitution.
According to court documents, the defendant devised a scheme to defraud her employer while employed as a telecommunications specialist at an Oklahoma hospital. For approximately nine years, she arranged for the hospital to purchase laptops, phones, and tablets from a company that provided telecommunications support services to the hospital. The electronic devices were not sought by the hospital nor required for operations.
The defendant caused the company to email her invoices for the devices, which she falsely represented as being acquired for the hospital’s business operations. She then falsified the invoices by, among other things, forging the signature of her direct supervisor at the hospital. As a result, the defendant caused the hospital to pay for the devices without the knowledge or permission of her supervisors. Once the devices were acquired, she sold them to acquaintances and other individuals to fund her gambling addiction. She forged signatures on more than 2,200 invoices, and her scheme resulted in a loss to the hospital of approximately $8,293,611.00.
Compliance Perspective
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. Every nursing facility should have a double check system in place for monetary transactions and the purchasing of supplies. All transactions should be legal and checked and approved by a second party to prevent misappropriation of funds. Misappropriation of funds can result in fines, other sanctions, and imprisonment.
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.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
