On Thursday, June 3, Roosevelt Hairston, Jr, a former lawyer for the Children’s Hospital of Philadelphia, was arrested and charged for embezzling $1.7 million over the course of the 12 years he served as general counsel for the hospital
According to a Philadelphia newspaper, the charges represent one of the most serious embezzlement schemes in Philadelphia in recent history. However, they also reveal the failure of the hospital’s financial auditing system to identify and stop significant financial waste, or in this case – serious fraud. Could this happen to a physician’s medical practice? You bet – happens more than you might think.
According to the U.S. Attorney’s office, Hairston created false companies, forged invoices, and even created fake email accounts in order to continue the scheme and cover his tracks. His fraud continued, completely unabated, for about 12 years before hospital auditors finally caught up with him.
According to the federal statement, Hairston utilized his money laundering and embezzlement scheme by establishing himself in a “position of trust” within the hospital. So why did it take 12 years to catch him?
Aside from the embarrassment caused by such a highly placed and well-trusted person embezzling so much from the Children’s Hospital, the situation really begs the question – were hospital financial auditors sleeping on the job?
Why did it take 12 years for investigators to identify and uncover the stolen funds? Is financial waste such a prevalent part of the hospital’s financial systems that it takes 12 years to identify $1.7 million dollars in erroneous charges?
Apparently, Hairston got away with the scam for so long, because he had identified the tremendous flaws in the system, discovered areas where vendors and suppliers could charge the hospital without any questions asked, and then used those vulnerable financial areas to siphon almost two million dollars from the hospital.