Here are 10 big fraud and abuse cases involving hospital executives.
1. Former director at Weymouth, Mass., South Shore Hospital charged with embezzling donations — In February, William S. Burke, former director of the hospital's cardiovascular center, admitted to diverting charitable contributions from the hospital's "Dare to Care" fundraising program and medical-supply rebates to the cardiovascular center to a personal bank account. The alleged embezzlement occurred from 2007-2009. Mr. Burke was sentenced to one year and one day in prison and was also ordered to pay $107,488 in restitution.
2. Former CFO of Tustin (Calif.) Hospital and Medical Center pleads guilty to kickback scheme — In February, Vincent Rubio has agreed to plead guilty to paying kickbacks for the recruiting of homeless people from Los Angeles' skid row. Mr. Rubio admitted helping arrange payments to people who recruited homeless people and transported them to the hospital, which would then run up bills that were paid by Medicare and Medi-Cal, the Times reported. Mr. Rubio also acknowledged he pocketed kickbacks from the recruiters and failed to report the money when he filed for income tax.
3. Former CFO of Acadian Medical Center in Eunice, La., sentenced for embezzlement — In March, Melissa Hanks Bordelon was sentenced to 18 months in prison for defrauding her employer by embezzling nearly $200,000. From Sept. 2004-Feb. 2008, Ms. Bordelon embezzled these funds through the hospital's student loan repayment program for physicians. As CFO, Ms. Bordelon had the hospital issue checks in excess of the loan payments and then used the extra funds for personal expenses. In addition to her prison time, Ms. Bordelon has also been ordered to pay more than $192,000 in restitution to the hospital.
4. Former president of Roger Williams Medical Center in Providence, R.I., sentenced to three years in prison on corruption charges — In July, Robert Urciuoli was convicted of bribing a state politician in an attempt to bring the hospital's legislative agenda to the forefront. He was initially convicted under the "honest services" fraud statue, but the U.S. Supreme Court recently ruled that the statute only related to cases of kickbacks and bribes. Mr. Urciuoli tried to appeal the conviction and contested that the scope of law was limited during his prosecution, but the federal appeals court upheld his conviction.
5. Former Beverly (Mass.) Hospital executive indicted in $500,000 bribery and kickback scheme — In July, associate vice president of Beverly Hospital Paul Galzerano has been indicted in a bribery and kickback scheme that brought him nearly $500,000 in profits. Two contractors a $50 million expansion project allegedly submitted inflated proposals for the work and paid the difference to Mr. Galzerano through payments on his mortgage and credit card bills. Mr. Galerzano also allegedly removed antiques, including a $10,000 century-old grandfather clock, paintings and other valuables, from the hospital and put them in his home, which he planned to sell. Mr. Galzerano has pleaded not guilty to the charges, and his trial is scheduled to begin in March 2011.
6. Former CFO of Danbury (Conn.) Hospital pleads guilty to wire fraud — In August, William Roe was accused of charging Danbury Hospital and St. Rita's Medical Center in Lima, Ohio $200,000 for software and services that were never rendered by his firm, Cycle Software Solutions. Mr. Roe was also charged with witness tampering and obstruction of justice after emails from Mr. Roe to John Murphy, MD, CEO of Danbury Hospital were released to the U.S. Attorney's Office. Mr. Roe's sentencing is scheduled for May 22.
7. Former CFO of H.C. Healthcare in Gainesville, Fla., could serve 90-year prison term for fraud scheme — Natalie Ann Krasnow was the former CFO of H.C. Healthcare, which owns and operates Jasper, Fla.-based Trinity Community Hospital. Ms. Krasnow was responsible for applying and accounting for grants from the Florida Department of Health, which were distributed with the intention of improving Trinity. Allegedly more than $660,000 was received by the hospital, but very little if any was used toward making such improvements. In September, Ms. Krasnow was arrested and faces a maximum sentence of 90 years in prison.
8. Senior director of UMass Memorial Medical Center in Worcester, Mass., sentenced for embezzlement — In October, John E. Lawler, senior director of major capital projects, was sentenced to two years in jail for embezzling more than $2.5 million from the Massachusetts health system. Mr. Lawler, who oversaw a $129 million construction project, pleaded guilty to embezzling money from the hospital by setting up fake bank accounts in the name of a construction company and depositing payment checks from the hospital in the fake accounts for his own gain between 2003 and 2007. In addition to jail time, Mr. Lawler has been ordered to pay $300,000 in restitution.
9. Former president and CEO of Archbold Medical Center in Thomasville, Ga., convicted of Medicaid fraud — In November, Ken Beverly, former president and CEO of Archbold Medical Center has been accused of falsifying documents to the Georgia Department of Community Health in order to pocket $9 million in Medicaid funds that were not rightfully due. According to the 20-page indictment against Mr. Beverly, the former hospital executive also pressured former chief financial officer William Sellers to help him falsify the information. After a federal jury found Mr. Beverly guilty of the Medicaid fraud charges, he now awaits sentencing.
10. Former purchasing director at Mount Sinai (N.Y.) Medical Center guilty to bid rigging and fraud — In December, Mario Perciavalle pleaded guilty to entering into a conspiracy with co-conspirators, between June 2004 and Sept. 2005, to rig bids on maintenance and insulation services contracts at Mount Sinai by intentionally submitting high, non-competitive bids to make it appear that there had been competition for the contracts when, in fact, there had not been. Mr. Perciavalle also pled guilty to engaging in a mail fraud conspiracy between March 2003 and Sept. 2005 in which he awarded work to a co-conspirator's company at the same time he asked for and received cash kickbacks totaling at least $20,500 from the co-conspirator. Mr. Perciavalle also pled guilty to mail fraud as a result of payments mailed by Mount Sinai to the co-conspirator for work done on the rigged contracts. Mr. Perciavalle now awaits sentencing.
1. Former director at Weymouth, Mass., South Shore Hospital charged with embezzling donations — In February, William S. Burke, former director of the hospital's cardiovascular center, admitted to diverting charitable contributions from the hospital's "Dare to Care" fundraising program and medical-supply rebates to the cardiovascular center to a personal bank account. The alleged embezzlement occurred from 2007-2009. Mr. Burke was sentenced to one year and one day in prison and was also ordered to pay $107,488 in restitution.
2. Former CFO of Tustin (Calif.) Hospital and Medical Center pleads guilty to kickback scheme — In February, Vincent Rubio has agreed to plead guilty to paying kickbacks for the recruiting of homeless people from Los Angeles' skid row. Mr. Rubio admitted helping arrange payments to people who recruited homeless people and transported them to the hospital, which would then run up bills that were paid by Medicare and Medi-Cal, the Times reported. Mr. Rubio also acknowledged he pocketed kickbacks from the recruiters and failed to report the money when he filed for income tax.
3. Former CFO of Acadian Medical Center in Eunice, La., sentenced for embezzlement — In March, Melissa Hanks Bordelon was sentenced to 18 months in prison for defrauding her employer by embezzling nearly $200,000. From Sept. 2004-Feb. 2008, Ms. Bordelon embezzled these funds through the hospital's student loan repayment program for physicians. As CFO, Ms. Bordelon had the hospital issue checks in excess of the loan payments and then used the extra funds for personal expenses. In addition to her prison time, Ms. Bordelon has also been ordered to pay more than $192,000 in restitution to the hospital.
4. Former president of Roger Williams Medical Center in Providence, R.I., sentenced to three years in prison on corruption charges — In July, Robert Urciuoli was convicted of bribing a state politician in an attempt to bring the hospital's legislative agenda to the forefront. He was initially convicted under the "honest services" fraud statue, but the U.S. Supreme Court recently ruled that the statute only related to cases of kickbacks and bribes. Mr. Urciuoli tried to appeal the conviction and contested that the scope of law was limited during his prosecution, but the federal appeals court upheld his conviction.
5. Former Beverly (Mass.) Hospital executive indicted in $500,000 bribery and kickback scheme — In July, associate vice president of Beverly Hospital Paul Galzerano has been indicted in a bribery and kickback scheme that brought him nearly $500,000 in profits. Two contractors a $50 million expansion project allegedly submitted inflated proposals for the work and paid the difference to Mr. Galzerano through payments on his mortgage and credit card bills. Mr. Galerzano also allegedly removed antiques, including a $10,000 century-old grandfather clock, paintings and other valuables, from the hospital and put them in his home, which he planned to sell. Mr. Galzerano has pleaded not guilty to the charges, and his trial is scheduled to begin in March 2011.
6. Former CFO of Danbury (Conn.) Hospital pleads guilty to wire fraud — In August, William Roe was accused of charging Danbury Hospital and St. Rita's Medical Center in Lima, Ohio $200,000 for software and services that were never rendered by his firm, Cycle Software Solutions. Mr. Roe was also charged with witness tampering and obstruction of justice after emails from Mr. Roe to John Murphy, MD, CEO of Danbury Hospital were released to the U.S. Attorney's Office. Mr. Roe's sentencing is scheduled for May 22.
7. Former CFO of H.C. Healthcare in Gainesville, Fla., could serve 90-year prison term for fraud scheme — Natalie Ann Krasnow was the former CFO of H.C. Healthcare, which owns and operates Jasper, Fla.-based Trinity Community Hospital. Ms. Krasnow was responsible for applying and accounting for grants from the Florida Department of Health, which were distributed with the intention of improving Trinity. Allegedly more than $660,000 was received by the hospital, but very little if any was used toward making such improvements. In September, Ms. Krasnow was arrested and faces a maximum sentence of 90 years in prison.
8. Senior director of UMass Memorial Medical Center in Worcester, Mass., sentenced for embezzlement — In October, John E. Lawler, senior director of major capital projects, was sentenced to two years in jail for embezzling more than $2.5 million from the Massachusetts health system. Mr. Lawler, who oversaw a $129 million construction project, pleaded guilty to embezzling money from the hospital by setting up fake bank accounts in the name of a construction company and depositing payment checks from the hospital in the fake accounts for his own gain between 2003 and 2007. In addition to jail time, Mr. Lawler has been ordered to pay $300,000 in restitution.
9. Former president and CEO of Archbold Medical Center in Thomasville, Ga., convicted of Medicaid fraud — In November, Ken Beverly, former president and CEO of Archbold Medical Center has been accused of falsifying documents to the Georgia Department of Community Health in order to pocket $9 million in Medicaid funds that were not rightfully due. According to the 20-page indictment against Mr. Beverly, the former hospital executive also pressured former chief financial officer William Sellers to help him falsify the information. After a federal jury found Mr. Beverly guilty of the Medicaid fraud charges, he now awaits sentencing.
10. Former purchasing director at Mount Sinai (N.Y.) Medical Center guilty to bid rigging and fraud — In December, Mario Perciavalle pleaded guilty to entering into a conspiracy with co-conspirators, between June 2004 and Sept. 2005, to rig bids on maintenance and insulation services contracts at Mount Sinai by intentionally submitting high, non-competitive bids to make it appear that there had been competition for the contracts when, in fact, there had not been. Mr. Perciavalle also pled guilty to engaging in a mail fraud conspiracy between March 2003 and Sept. 2005 in which he awarded work to a co-conspirator's company at the same time he asked for and received cash kickbacks totaling at least $20,500 from the co-conspirator. Mr. Perciavalle also pled guilty to mail fraud as a result of payments mailed by Mount Sinai to the co-conspirator for work done on the rigged contracts. Mr. Perciavalle now awaits sentencing.