Fraud schemes targeting Tennessee, Wisconsin health systems end in prison time for defendants

The Department of Justice (DOJ) announced prison sentences this past week for individuals participating in a pair of fraud cases involving money stolen from health systems in Tennessee and Wisconsin.

The first, announced June 16, was against Melanie Haste, the director of risk management for West Tennessee Healthcare from 2012 to 2020.

Haste stole a $146,000 check for the organization and attempted to deposit it in her own account, according to the U.S. Attorney’s Office for the Western District of Tennessee.

Suspicion led to an account freeze and a law enforcement investigation that found Haste had stolen and attempted to steal more than $355,000 from the organization. The DOJ said she used the money for personal expenses, vacations and gifts to family members.

Haste pleaded guilty to one count of wire fraud in January and was sentenced to 18 months in federal prison. A judge also ordered her to pay roughly $209,000 to the health system in restitution.

In imposing the sentence, the court noted that Haste had "abused the trust of her employer, and the seriousness of her offense warranted a prison sentence,” the office wrote. “There is no parole in the federal system.”

The second sentencing, announced June 16, involves a kickback scheme between a former executive of Janesville, Wisconsin-based Mercyhealth and the owner of a marketing agency that worked with the system.

Ryan Weckerly, the owner of Morningstar Media Group, collaborated with former Mercyhealth Vice President of Marketing and Public Relations Barbara Bortner from 2015 until 2020, according to the U.S. Attorney’s Office for the Western District of Wisconsin.

Their scheme involved inflated marketing invoices submitted by Weckerly for marketing work, according to the DOJ. Bortner used her position to approve the invoices and ensure Morningstar Media Group would remain the primary marketing agency for Mercyhealth, and, in turn, received payments from Weckerly that were funded by the inflated invoices.

Bortner also created a fake company to mask the kickback payment scheme, to which Weckerly wrote more than 100 checks, according to the DOJ. The total of these checks exceeded $2 million, the DOJ wrote, and were accompanied by more than $1 million in additional cash kickbacks to Bortner.

Bortner had been with Mercyhealth for over 30 years and was axed from the health system in 2021.

“Our patients and the communities we serve expect us to conduct our business affairs with the highest degree of integrity,” Mercyhealth CEO Javon Bea wrote in a memo to staff at the time of Bortner’s firing. “We are all deeply saddened and disappointed that a member of our team has betrayed that trust.”

In last week’s sentencing, Weckerly received 12 months and one day in federal prison, to be followed by six months of home confinement and two and a half years of supervised release. He had pleaded guilty in November to wire fraud and aiding and assisting in the filing of a false tax return.

Bortner had been sentenced in May to three and a half years in prison. She pleaded guilty to wire fraud and tax evasion in October.

Both co-defendants were ordered to pay more than $2.4 million in restitution to Mercyhealth.

The majority of fraud tracked down by the DOJ is housed in the healthcare industry. In fiscal 2021 alone, more than $5 billion of the total $5.6 billion in False Claims Act recoveries were tied to healthcare industry cases, the department announced in February.