Plotting Fraud

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Sometimes you have to wonder how an author comes up with a plot for a best-selling novel. Elements that make for great fiction can include a protagonist using their position of power to steal from the poor in order to fund a lavish lifestyle. A mystery with a suspicious insurance policy and an accidental death could also capture the interest of readers. Other ideas might include forgery and intimidation of a witness to prevent serving time in prison. (Today’s non-fiction ”Fraud of the Day” article actually includes all of these elements. Read on to discover the thrilling conclusion.)

The protagonist of the story is a former Chief Financial Officer (CFO) of two community health care centers and was serving a 28-month sentence prior to getting into trouble a second time. Her first run-in with the law involved her association with the former Chief Executive Officer (CEO) of the two community health care centers. She helped him divert $11 million from the two companies to other companies owned by the former CEO. (She helped him conduct real estate transactions, secure bank financing, and make financial transactions at the two health care centers. She was definitely an accessory to the multiple crimes the CEO committed.)

Here’s where it gets more interesting. When asked to testify at her former boss’ trial, she refused and plead the Fifth to prevent incriminating herself. However, the woman who is described as ”calculating and vindictive,” made a huge mistake and tried to intimidate a witness and a prosecutor who was investigating the health care fraud case by sending drugs and other items through the mail. (She was trying to implicate the husband of the prosecutor in the illegal trade of drugs.) As a result, she received a 28-month sentence in prison.

In addition to these unscrupulous actions, she also used her former position of power as CFO to steal $1.7 million from the two federally-funded centers that served the poor and the homeless living in Birmingham, Alabama. (The conniving woman used the money she stole to pay off her mortgage, buy a vacation home and partially pay for a second one. She also deposited some of the funds into several accounts in the names of her three children.)

The 50-year-old fraudster pleaded guilty to wire fraud, mail fraud and money laundering. She agreed to surrender her CPA license and will serve 17 years in prison to be followed by five years of supervised probation after release. She also has to forfeit nearly $2 million from her illegal scheme. On top of that she must pay more than $500,000 to the Internal Revenue Service and $30,000 to a life insurance company regarding an accidental life insurance policy she took out on her brother-in-law. (She pretended to be his sister. She also owes a doctor $10,000 for forging their signature on a false death certificate. I wonder how the brother-in-law fared through all of that.)

There are times when you hear a story that you think couldn’t possibly be true. While this one had a lot of twists and turns that even the most intuitive readers could not have predicted, the ending is definitely predictable. (Let’s hope this woman’s long stint behind bars will be the final chapter with no follow-on illegal adventures to come. Not every story needs to be made into a trilogy.)

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Former Birmingham Health Care CFO sentenced in $11 million fraud,” published on AL.com on August 9, 2016.

Birmingham Health Care’s former chief financial officer, who last year pleaded guilty to stealing $1.7 million from the federally-funded center for the poor and homeless, was sentenced Tuesday to serve 17 years in prison.

Terri McGuire Mollica, 50, also was ordered by Chief U.S. District Court Judge Karon O. Bowdre to serve five years under supervised probation once she is released.

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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.