Jackson Health System audit manager charged with payroll scam

By John Dorschner

An audit manager who served as a financial watchdog for cash-strapped Jackson Health System is accused of masterminding a payroll fraud plan that bilked $83,000 from the public hospitals using “ghost employees,” prosecutors said Wednesday, adding that the investigation is continuing and more arrests are expected.

In the latest accusation against an employee of Jackson, which has lost more than $400 million during the past three years, Tiffany Gordon-Smith was charged with participating in an organized scheme to defraud, grand theft and unlawful compensation.

Her lawyer, Peter Raben, said Wednesday that Gordon-Smith has made arrangements to surrender “and is eager to have her day in court.”

The two “ghost employees” were arrested Wednesday. Janet Lockwood and Kenneth Mitchell are charged with participating in an organized scheme to defraud and grand theft. They could not be immediately located for comment.

The charges involve $83,000 in Jackson paychecks made out over eight months to Lockwood and Mitchell. According to a statement supporting the arrest warrant, Miami-Dade Detective Noel Varela said Lockwood was paid $17,000 by Jackson for four months — at the same time that records show she was attending U.S. Navy boot camps in Michigan and Illinois.

Jackson is struggling to maintain its role as the safety net for Miami-Dade’s poor and uninsured.

Miami-Dade State Attorney Katherine Fernandez Rundle likened the scheme to “taking money from the homeless…..Here everyone is struggling to keep Jackson alive for this community, and then you have people on the inside … stealing from this community.”

She added: “We have other leads. … We anticipate there will be more arrests. We know this isn’t over. We know there are other thefts to be found” at Jackson.

Jackson Chief Executive Carlos Migoya, who began his job in May, said he and his staff were working with law enforcement officials to stop fraud inside the hospitals.

Jackson has had continuing problems with employee criminal activity. In 2009, former employee Rebecca Garcia was sentenced to 10 months in jail for stealing 3,000 patient records that were later sold to attorneys. In May 2010, 50 vials of Botox valued at $18,000 vanished from a Jackson pharmacy. A security camera that should have been trained on the vials had malfunctioned; no one has been charged in the case.

In documents, Varela said the scheme was first revealed on July 1, 2010, when Jackson Internal Audit Director Marlane Berg told Miami-Dade investigators that a Jackson employee, Steffani Thomas, had revealed to her that she had learned from her sister, Sarah McRae, that Gordon-Smith, a former audit manager in the revenue cycle division until March 2010, had “committed fraud in excess of $300,000 for payments to temporary workers.”

Some worked only minimal hours but received full-time paychecks and overtime, while others were paid but never worked at all at Jackson, Thomas said, according to Varela’s statement.

Gordon-Smith was in charge of overseeing the work of All Medical Personnel, which provided temporary workers to Jackson, Varela said. That included the initial authorization of the workers’ time sheets.

All Medical Personnel could not be reached for comment on Wednesday.

The police investigation found that Gordon-Smith had strongly recommended Lockwood and Mitchell for employment at Jackson “even though they did not meet the minimum qualification criteria” for their jobs, according to Varela’s statement.

The investigation focused on Lockwood and Mitchell because they received unusually large payments. From Aug. 21, 2009, to Feb. 5, 2010, All Medical Personnel billed JMH for 1,133 hours totaling $49,301.23. Mitchell received $28,038. All Medical billed Jackson for $34,323 for Lockwood’s work, including $13,983 in overtime. Lockwood received at least $17,000.

An ex-girlfriend of Mitchell, Federica Camacho, told investigators that Mitchell cashed the checks and turned most of the money over to Gordon-Smith, keeping $400 per paycheck for himself.

Payments from Lockwood’s account were made to Brittiany Turner, Gordon’s niece, who told investigators she cashed the checks and gave the money to Gordon. In other cases, checks from Lockwood’s account went directly to Gordon-Smith, according to the statement.