Hospital Payroll Director Caught Embezzling

He served for seven years as assistant controller for Grady Memorial Hospital Corp., an Atlanta, Georgia, health care provider to thousands of patients, many of whom are uninsured or indigent.

While serving as payroll director, he had nearly exclusive control over Grady’s payroll systems. Over a three-year period, he falsified additional vacation pay and severance pay for former Grady employees and had the funds deposited into his own accounts.

Because he was careful about reversing his fraudulent changes to the payroll system and had most of the funds deposited into a business account rather than his own, the scheme went undetected. The payroll director was laid off in a workforce reduction in 2011, before the fraud was discovered.

Covering his tracks

Prior to leaving Grady in 2011, he became less careful about covering his tracks, and as a result, some of the falsified pay was reported as income on the former employees’ federal W-2 tax forms.

In early 2012, one of those employees noticed the inflated income amount and reported it to hospital officials. Further investigation led to the discovery of 136 fraudulent transactions in all. Over the course of the scheme, the payroll director stole more than $480,000.

On December 5, 2014, a jury convicted him of six counts of theft from an organization receiving federal funds, six counts of wire fraud, and two counts of bank fraud. At trial, witnesses from Grady explained how the payroll director manipulated the payroll system, as well as the effect of the financial loss on Grady’s ability to provide medical services.

More than seven years

Donald Thomas, 55, of Atlanta, was sentenced by U.S. District Judge Charles A. Pannell Jr. to seven years and three months in prison and three years of supervised release, and ordered to pay $482,851.76 in restitution to Grady Hospital.

“As a result of the defendant’s embezzlement, Grady Hospital lost hundreds of thousands of dollars that otherwise would have gone towards patient care,” said Acting U.S. Attorney John Horn. “Grady has made monumental changes to restore its financial health, and Thomas used his position of trust at the hospital to harm these efforts simply for his own personal gain. Today he goes to prison.”

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