Healthcare Compliance Perspective:
Compliance Officers must ensure that Human Resources and Accounting regularly audit systems involving employee on-boarding and payroll processing.
New York’s Attorney General announced last week that the owner of a home health care agency based in New York had been sentenced to one year in jail for defrauding 67 employees out of over $135,000 in wages. In July 2016, the 67-year-old man, pled guilty to engaging in a scheme to induce health care workers to provide home health care services to the agency’s clients without pay. He was also accused of falsifying business records, failing to pay wages, and defrauding the state unemployment insurance contribution system. In addition to jail time, the judge of the County Supreme Court ordered him to pay full restitution of $135,161.79 in back wages owed to his employees and over $66,000 in state unemployment insurance fund contributions. He was also ordered to dissolve the health care agency.
Between December 2012 and June 2015, the man hired caregivers to assist patients who were elderly, sick, infirm, or disabled with basic daily needs such as bathing, getting dressed, and preparing their food. However, an investigation conducted by the Attorney General’s office revealed that the man failed to pay these workers consistently after they performed those vital duties. In addition to failing to pay workers for all of their hours worked, the man created false tax documents, such as W-2 Forms, and reported wages that he never paid to the workers. He also failed to pay the required quarterly New York State unemployment insurance contributions for all employees.
