Crabtree was fired from the hospital after working there six years in 2008 without explanation and now lives in Castle Rock, Colo. He did not respond to several phone messages at his home.
The lawsuit said the scheme began within months of Crabtree's initial hiring.
Hospital CEO Alex Valdez said information about the scheme was discovered through an anonymous packet that someone mailed to him in late January 2008. Hospital officials, including its board of directors, moved quickly to investigate the fraud allegations once they learned of them, and that's why Crabtree was fired, he said.
The hospital's board also alerted law enforcement authorities about the possible fraud and hopes Crabtree is investigated on criminal charges, Valdez said.
He declined to say which agencies were notified. "I don't want to do anything to jeopardize ongoing investigations."
Lynn Southard, a spokeswoman for the New Mexico Attorney General's Office, said the case was referred to the office's investigations division.
"As is the case with any referral, the matter was assigned for further review and inquiry," she said in a statement. "Per our media policy, we cannot comment on the status of that inquiry at this time."
Valdez stressed that despite the magnitude of fraudulent billings, the hospital was able to recoup the money through its insurance carrier and, as a result, didn't suffer financially.
"From the hospital perspective, we have been made whole," he said.
The woman Crabtree had a relationship with and her two brothers billed the hospital for $3.2 million through a number of companies in New Mexico, Arizona and Texas that they controlled, according to the lawsuit. Their names are not included.
The companies involved sometimes shared a single bank account. In addition, Crabtree and the others set up a meeting in an effort to convince St. Vincent officials that the companies were legitimate, according to the lawsuit.
Crabtree also tried to prevent "knowledgeable St. Vincent Hospital personnel" from interacting with the others involved "in order to minimize the risk of discovery," according to the lawsuit.