Medical Center Sues Maintenance Workers for Fraud

Palmdale Regional Medical Center in Palmdale, California has filed a lawsuit against three former maintenance workers accusing them of fraud and breach of duty of loyalty, Human Resources Director reports. The lawsuit claims the hospital paid the three men for services they never rendered.

The lawsuit claims Scott Finstein, who served as director of plant operations at the medical center from 2008 to 2019, engaged in a scheme in which he approved invoices for payments to vendors who hadn’t performed the tasks they were hired to complete. Finstein coordinated and oversaw maintenance work performed by internal employees and outside contractors.

The lawsuit also lists Richard Yanik, who the hospital allegedly paid more than US$250,000 for various building repairs and services which he never performed. The hospital paid a third man listed in the lawsuit, Thomas Mathis, more than $147,000 from 2011 through 2018 for various products, supplies, and services—such as degreaser and hand cleaner—which he never delivered. Over the same time period the hospital paid Mathis more than $260,000 for services he allegedly never completed, such as testing the fire alarm system.

Finstein submitted his resignation to the medical center in January 2019 after a co-worker who was not involved in the scheme tipped off hospital authorities about Finstein’s alleged fraud. An investigation found that the medical center suffered a financial loss of $663,942.16 due to Finstein’s alleged false invoicing scheme.