Beware of the Heedless Horoscope

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The Battle Creek Enquirer has the otherworldly story of a superstitious Michigan CEO, who is now serving prison time for using half a million dollars in company money to finance a phony psychic.

A recent report details how the man, after twenty five years at the helm of a thriving mental health non-profit, hired a Key West ”coach” to help guide his company through a leadership transition. He compensated the ”consultant” by sending hundreds of thousands of dollars in payments to a Key West address recorded by the city as a palm reader shop. A subsequent investigation by the company’s Board revealed financial irregularities and a defined-benefits pension plan that the CEO had implemented without their approval, and highlighted his many conflicts of interest with vendors. (Half of a million dollars isn’t exactly chump change and, once spent, certainly leaves a discernible hole in the ol’ bank account.)

The palm reading shop turned out to be nothing but a shadow company, and its proprietor was neither a consultant nor a psychic—just another scammer. (Shocking, I know.) When all was said and done, the CEO had drained the mental health provider of more than $500,000 dollars to pay for phony advice from a con man posing as a medium.

The CEO was indicted after the Board turned over their findings to the Michigan Attorney General. Charged with three felonies, he admitted to spending $510,000 in public funds under fraudulent consulting contracts. He pleaded guilty to multiple counts of Medicaid fraud and one count of embezzlement by a public official, and waived his multi-million dollar interest in the (super secret)pension plan he set up.

It is reported that the defendant told the presiding judge, ”Knowing what I know now, I wouldn’t do it again,” and that one of his attorneys reportedly blamed his crimes on ”a psychological dependence on a psychic.’? Considering that the Board spent more than $1 million in related attorney fees, bringing the total cost of this scam to more than $1.5 million, it’s at least somewhat believable that this man does, in fact, operate in a comprised psychological state. (But back in my day, we sent these guys straight to the looney bin. You can thank the 1960s for taking that option off the table.)

In addition to being fired by the Board, the CEO received two and a half years in prison – nearly double the amount of prison time outlined in sentencing guidelines, and it is reported that the judge wanted to give him more. He was also slapped with more than $1 million in fines, half of which must be repaid to the non-profit and the other half, to the state.

Source: Today’s ”Fraud of the Day” is based on ”Brinker gets more than 2-1/2-year prison term for fraud,” by Jennifer Bowman and published by the Battle Creek Enquirer on January 15, 2016.

MASON — Former Summit Pointe CEO Erv Brinker will spend more than 2½ years in prison for stealing a half-million dollars from the mental health agency he once was applauded for leading.

The 69-year-old was sentenced in Ingham County Circuit Court on Wednesday to 32 to 120 months of imprisonment after pleading guilty to three charges — two counts of Medicaid fraud and one count of embezzlement by a public official. Brinker admitted to paying a psychic $510,000 of public funds under fraudulent consulting contracts.

His sentence is nearly double the 17 months of prison time called for by criminal sentencing guidelines. Judge William Collette said the guidelines for such crimes “are absolutely ridiculous.”

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.