Tennessee Man Charged in Manhattan Federal Court with Misappropriating More Than $8 Million from Private Health Care Services Companies
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of STEVEN RAWLINS, a former outside consultant to two healthcare services companies. As alleged, from 2009 through 2013, RAWLINS misappropriated at least $8 million from two healthcare services companies. In his capacity as a consultant for both companies, RAWLINS abused his authority to withdraw company funds for payment of legitimate business expenses and tax obligations by, among other things, using such funds to pay personal expenses incurred by RAWLINS, his family, and his associates.
RAWLINS was arrested by the FBI this morning at his residence in Tennessee, and was presented in federal court in the Middle District of Tennessee earlier today.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, as a consultant for two companies, Steven Rawlins broke his clients’ trust by misusing more than $8 million. His alleged crimes carry a maximum penalty of up to 20 years in federal prison.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As an outside consultant hired to handle internal financial matters, Rawlins allegedly took advantage of his authority and helped himself to millions of dollars of embezzled funds. His lifestyle flourished while his victims paid the ultimate price, incurring staggering financial losses resulting from the crime with which he is accused. Today, he faces the error of his ways and the due process of law.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:
From 2004 to 2013, RAWLINS was retained as an outside consultant by a private healthcare services company, which is headquartered in Tennessee (“Company-1”) to assist with financing and accounting matters. RAWLINS’s responsibilities included securing financing for Company-1 and facilitating tax payments. During that time period, RAWLINS was retained by another private healthcare services company, which at the time had operations in Florida and New York (“Company-2”), to perform a similar role. As part of his responsibilities, RAWLINS was authorized to bill both Company-1 and Company-2 for legitimate business expenses incurred in connection with his services.
RAWLINS abused his authority to withdraw company funds and ultimately misappropriated more than $8 million, which he used to pay personal expenses incurred by himself, his family, and his associates. For instance, as part of his responsibilities as a consultant to Company-1, RAWLINS represented that he would handle necessary tax payments by Company-1 to the State of Tennessee. From 2011 to 2012, RAWLINS withdrew over $693,000, purportedly in order to pay Company-1’s outstanding tax liabilities to Tennessee. In reality, during that time period, Company-1 owed less than $16,000 in applicable Tennessee state taxes. Moreover, from 2012 to 2013, RAWLINS caused over $615,457 to be withdrawn from a Company-1 bank account in order to pay bills associated with an American Express credit card account. That American Express account was in turn used to pay for numerous personal expenses incurred by RAWLINS, or those associated with him, including a payment of $30,000 to a Ferrari dealership on Long Island and a payment of over $21,500 to a professional hockey franchise.
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RAWLINS, 58, of Brentwood, Tennessee, is charged with one count of wire fraud. He faces a maximum sentence of 20 years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to the victim. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI. He added that the investigation is continuing.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward Y. Kim and Andrew J. DeFilippis are in charge of the prosecution, and Margaret S. Graham is in charge of the forfeiture aspects of the case.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.