SUNY Downstate EM Doc Accused of $1.5M Fraud

In a case that spotlights the importance of comprehensive monetary controls in clinical locations of work, a main Novel York Metropolis emergency medication doctor stands accused of using his industry credit ranking card to elevate nearly $1.5 million from his scientific follow and exhaust it on cash advances, private commute, lavish pet providers and products, and further.

Michael Lucchesi, MD, who had served as chairman of Emergency Tablets at SUNY Downstate Scientific Center in Novel York Metropolis, used to be arraigned on July 9 and pleaded now not responsible. Lucchesi’s attorney, Earl Ward, did now not reply to messages from Medscape Scientific News, however he informed the Novel York Post that “the funds he aged had been now not stolen funds.”

Lucchesi, who’s in his unhurried 60s, faces 9 counts of first- and 2nd-level enormous larceny, first-level falsifying industry records, and third-level criminal tax fraud. Per a press assertion from the district attorney of Kings County, which encompasses the borough of Brooklyn, Lucchesi is accused of using his scientific follow’s industry card for cash advances (about $115,000), excessive-discontinuance pet care ($176,000), private commute ($348,000), gymnasium membership and private coaching ($109,000), catering ($52,000), tuition funds for his kids ($46,000), and various expenses much like on-line browsing, plant life, liquor, and electronics.

Loads of the alleged pet care spending — $120,000 — went to the Inexperienced Leaf Pet Resort, which has two areas in Novel Jersey, collectively with one with “56 acres of nature and various tail wagging.” About a of the alleged spending on gymnasium membership used to be at the Novel York Sports activities Clubs chain, where monthly membership tops out at $139.Ninety 9.

The alleged spending took place between 2016 and 2023 and used to be chanced on by SUNY Downstate all the design in which through an audit. Lucchesi reportedly left his design at the clinical institution, where he made $399,712 in 2022 as a professor, per public records.

“As a excessive-ranking doctor at this most important healthcare institution, this defendant used to be entrusted with acquire admission to to most important funds, which he allegedly exploited, stealing extra than 1 million greenbacks to pay for a lavish each day life,” said District Prison professional Eric Gonzalez in a assertion.

SUNY Downstate is in a fight for its life amid efforts by Novel York Governor Kathy Hochul to shut it down. Per The Novel York Cases, it is the splendid notify-bustle clinical institution in Novel York Metropolis.

Lucchesi, who had beforehand served because the clinical institution’s chief clinical officer and acting head, used to be launched without bail. His next court date is September 25, 2024.

Dimension of Alleged Theft Is ‘Very Unheard of’

David P. Weber, JD, DBA, a professor and fraud specialist at Salisbury College, Salisbury, Maryland, informed Medscape Scientific News that the counterfeit exercise of a industry or aquire credit ranking card is a develop of embezzlement and “no doubt a number of the unceasingly considered kinds of frauds towards organizations.”

William J. Kresse, JD, MSA, CPA/CFF, who experiences fraud at Governors Say College in College Park, Illinois, important in an interview with Medscape Scientific News that the excessive amount of alleged fraud on this case is “very original,” as is the length it is claimed to gain took place (over 6 years).

Kresse highlighted a 2024 checklist by the Affiliation of Licensed Fraud Examiners, which stumbled on that the median fraud loss in healthcare, on the muse of 117 conditions, is $100,000. Among the conventional develop of fraud within the exchange is corruption (47%), followed by billing (38%), noncash theft much like stock (22%), and expense compensation (21%).

The most important functions of the present case imply that “SUNY Downstate had worn or inadequate interior controls to discontinuance this design of fraud,” Salisbury College’s Weber said. “Alternatively, compare moreover makes obvious that the tenure and design of the perpetrator play a most important characteristic within the scale of the fraud. Internal controls are purported to follow to all employees, however the increased within the group the perpetrator is, the more straightforward it goes to also moreover be to gain interaction in fraud.”

Even Puny Scientific Places of work Can Act to Stay Fraud

What can also moreover be done to discontinuance this design of fraud? “Each and each worker must be required to publish right receipts or scanned copies, and the compensation requests must be reviewed and inputted by a separate division or build of abode of work of the group to guarantee the expenses are dependable,” Weber said. “As well, all credit ranking card statements must be readily available for review by the group both simultaneously with the invoice going to the worker or readily available for audit or review at any time without notification to the worker. Funds which would be in definite categories must be prohibited automatically and coded to the card so this form of cost is rejected by the credit ranking card bank.”

Smaller agencies — treasure many clinical practices — can also simply now not gain the manpower to address these roles. In that case, Weber said, “The secret is segregation or separation of tasks. The bookkeeper can now not be the actual person receiving the bank statements, the funds from patients, and the invoices from distributors. There desires to be at the least one various particular person within the loop to gain some level of adjust.”

One strategy, he said, “is that the follow have to institute a policy that handiest the doctor or owner of the follow can receive the mail, now not the bookkeeper. Even supposing the follow leader doesn’t certainly review the bank statements, simply opening them sooner than handing them off to the bookkeeper can provide a level of deterrence [since] the worker can also simply acquire caught if any individual else is reviewing the bank statements.”

Randy Dotinga is an unbiased author and a board member of the Affiliation of Health Care Journalists.