A federal judge last week sentenced Jay Murphy, former chief financial officer for Cape Coral (Fla.) Hospital, to 18 months in jail and required him to pay $290,000 in restitution to the scandal-plagued facility.
Murphy had pleaded guilty in U.S. District Court in Fort Myers, Fla., last December to theft charges. He also was required to forfeit a $90,000 interest in his house and pay the Internal Revenue Service unspecified back taxes, penalties and interest, said Chris Rolle, an attorney for Cape Coral with the Tampa, Fla.-based law firm of Foley and Lardner.
Rolle said Murphy was given the maximum sentence. Murphy, who has agreed to cooperate with prosecutors in their ongoing investigation, had admitted stealing $290,000 from Cape Coral between August 1989 and July 1992.
A total of $1.2 million was allegedly embezzled from the hospital from
1987 to 1992. In addition, another $425,000 to $3.8 million worth of silver residue from X-ray film also is missing, officials said.
The other two executives Cape Coral fired in relation to the financial scandal have not been charged, Rolle said. J. Michael Ward, former chief executive officer, and Daniel Edgar, former chief operating officer, have filed lawsuits against the hospital to recover $4.3 million in severance pay and other compensation (June 20, 1994, p. 3).
Attorneys for Ward and Edgar have described the money as "loans and bonuses."
Cape Coral lost nearly $18 million in 1994. The hospital agreed to be acquired by Naples, Fla.-based Health Management Associates in January to bail out nervous bondholders and turn around its operations.
Murphy was unavailable for comment at press time.