The fancy lifestyles of two executives at Cooper Hospital-University Medical Center in Camden, N.J., tipped off federal authorities who uncovered the source of their extravagance: $3.8 million they and an associate looted from the hospital.
The three pleaded guilty in federal court last week to kickback and false billing schemes. The defendants are to repay $2.2 million as part of their plea agreements, said U.S. Attorney Faith S. Hochberg. That figure could rise if additional suspects are convicted. The investigation into wrongdoing at the hospital is continuing, and the institution is cooperating, she said.
The probe is unrelated to a similar case involving officials and vendors of Monmouth Medical Center, a large hospital in Long Branch, N.J., in which about $3 million was stolen through various schemes. Among those convicted in 1992 were the hospital's chief financial officer and three senior managers.
"Because of the publicity in the Monmouth case, information came forward in this case" from a "conscientious citizen" suspicious about the Cooper executives, Ms. Hochberg said.
"They were living in much more lavish style than their position and salaries would indicate," she said.
Pleading guilty to embezzlement and tax evasion charges were John M. Sullivan, former hospital executive vice president for finance; P. John Lashkevich, a former controller in the hospital's finance department; and John H. Crispo, owner of Financial Management Corp. and J-Jet Recover Systems.
Mr. Sullivan, 46, of Moorestown, N.J., and Mr. Crispo, 56, of Vineland, N.J., also pleaded guilty to conspiracy, bribery and money laundering. They face up to 45 years in prison and fines of $2.5 million when sentenced Oct. 7.
Mr. Lashkevich, 34, of Mount Laurel, N.J., faces up to 15 years in prison and a fine of $500,000.
All three have agreed to cooperate in the ongoing probe and were released on bond pending sentencing before U.S. District Judge Joseph H. Rodriguez, who accepted their guilty pleas.
"In order to solidify the relationship that FMC had with the hospital, (Mr.) Crispo began to make payments to (Mr.) Sullivan. (Mr.) Sullivan actually reported ($300,000 of) those payments on his income tax," said Assistant U.S. Attorney Paul H. Zoubek.
The money was listed not as bribes, but as outside income from Mr. Sullivan's professional consulting firm, which existed only on paper, Mr. Zoubek said.
Mr. Sullivan admitted he took $540,000 from Mr. Crispo. More than $200,000 came in monthly payments that began at $2,500 in 1987 and rose to $10,000 in 1993 to ensure that FMC did hospital billing work. Mr. Sullivan also got $340,000 for directing more than $20 million in delinquent accounts to Mr. Crispo's collection agency, J-Jet.
Messrs. Sullivan and Crispo created more than $2.8 million in phony invoices from FMC and some fictional companies for purported collection services. Each pocketed more than $1 million.
Mr. Lashkevich admitted the false-billing scheme netted him $807,000.