Miami Beach Community Health Center CEO Pleads Guilty in $6 Million Embezzlement Scam
|U.S. Attorney’s Office March 20, 2013|
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; Michael A. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), announced that defendant Kathryn Abbate, 64, of Hollywood, Florida, pled guilty today to theft of money from programs receiving federal funds, in violation of Title 18, United States Code, Section 666. Sentencing is scheduled for May 29, 2013 at 11:30 a.m. before U.S. District Judge Marcia G. Cooke. At sentencing, the defendant faces a maximum statutory sentence of up to10 years in prison.
According to the factual proffer field with the court, the defendant served as chief executive officer of the Miami Beach Community Health Center (MBCHC) from 2002 to mid-2012. During this time, MBCHC was a Federally Qualified Health Center (FQHC) that provided medical care to persons regardless of ability to pay or insurance status. As an FQHC, MBCHC received millions of dollars of federal funding each year from 2008 to 2012 through cash grants and Medicaid reimbursements.
According to the factual proffer, beginning around 2008 and continuing through around May 2012, Abbate embezzled money from MBCHC. First, Abbate caused MBCHC to pay her non-accrued vacation pay and other forms of compensation that totaled over $3 million from 2008 to 2012. Second, Abbate embezzled money from MBCHC by causing non-payroll checks to be issued from MBCHC payable to her. Specifically, from 2007 to 2012, Abbate caused MBCHC to disburse approximately 837 checks made payable to her totaling approximately $3 million (the Abbate Checks) for “community development.” No backup documentation (such as an invoice or receipt) was provided for any of these checks and money from these funds was misappropriated by Abbate, including for personal use.
According to the factual proffer, in May 2012, auditors requested backup documentation for the Abbate checks disbursed by MBCHC in 2011, totaling approximately $1 million. In response, Abbate caused false backup documentation to be provided to the auditors, falsely indicating that the $1 million had been paid to five doctors at a medical facility. In fact, however, the money had not been paid to these doctors but had been misappropriated by Abbate.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. The case is being prosecuted by AUSAs Michael N. Berger and Patrick Sullivan.