BIRMINGHAM – Federal agents arrested the former financial officer of two nonprofit health clinics for the poor and homeless on multiple charges related to a scheme to defraud millions of dollars from the clinics and the federal government health agencies that provide most of their funding.
Terri McGuire Mollica, 48, of Birmingham, was arrested on an 82-count indictment returned by a federal grand jury last week. The indictment charges Mollica with wire fraud, mail fraud, money laundering, aggravated identity theft and filing false income tax returns. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office Special Agent in Charge Derrick L. Jackson announced the charges after a judge unsealed the indictment following Mollica’s arrest.
Mollica was the chief financial officer of Birmingham Health Care from April 2005 through November 2008. She also performed fiscal duties for Central Alabama Comprehensive Health Inc., a nonprofit clinic in Tuskegee intended to provide primary and preventative health care to people in east Alabama, regardless of their ability to pay. BHC’s chief executive officer, identified in the indictment by the initials J.D., served for a time as the chief executive officer of the Tuskegee clinic and, in 2008, BHC took over fiscal responsibility of CACH.
The indictment charges that between January 2008 and March 2012, Mollica aided and abetted J.D. and others in diverting about $11 million in federal grant money, assets and property of BHC and CACH to private entities created by J.D. Mollica then conducted financial transactions to transfer money from the private entities to herself, J.D. and others, according to the indictment. It charges that she illegally received about $1.7 million through the scheme.
“Federal funds meant to provide healthcare to the poor and the homeless are not a moneybox for criminals,” Vance said. “My office will vigorously prosecute health care fraud, working to ensure these funds go to the people they are intended to help, and that criminals go to jail.”
“If you are stealing tax dollars to line your own pockets, you should be looking over your shoulder,” Schwein said. “The FBI and our partner agencies are right behind you, ready to hold you to account and make you answer for your crimes.”
“Today’s arrest demonstrates that individuals who engage in corrupt behavior will be held accountable for their actions,” Hyman-Pillot said. “The allegations against Terri Mollica and others are deplorable. This is a classic example of abusing power while in a position of trust. These individuals made a profit by defrauding the government and will be brought to justice,” she said.
“It’s both unconscionable and illegal when scammers defraud federal grant programs designed to assist those in need and then pocket the funding to enrich themselves, as Terri Mollica is accused of doing,” Jackson said. “Such greed-fueled fraud cheats both taxpayers and those in need, but our hardworking investigators and law enforcement partners are committed to making sure that such fraudsters are held accountable for their actions,” he said.
BHC began receiving grants from the Health Resources and Human Services Administration, an arm of the U.S. Department of Health and Human Services, more than 20 years ago. Federal grants administered by HRSA and HHS constitute the overwhelming majority of BHC and CACH funding.
Mollica and others misrepresented and concealed information from HRSA to ensure the agency would continue to grant money to the Birmingham and Tuskegee community health clinics, according to the indictment.
J.D. incorporated numerous private companies using “Synergy” in the name. He also incorporated Integrated Health Systems of Alabama in 2006 and later reconstituted it as Integrated Health Systems Alliance in July 2008. In late 2008, J.D. left his position as CEO at BHC “purportedly to operate” his private companies, according to the indictment. In October 2008, Mollica became the chief financial officer of Synergy Medical Solutions. She also served as CFO of IHSA, and had access to the financial accounts of the other Synergy entities, the indictment says.
Mollica faces 21 wire fraud counts for interstate wire transfers between November 2009 and June 2011. The transfers were from a Wachovia Bank account for one of the Synergy entities or from a BHC account at Regions Bank to Mollica, or to accounts she controlled.
Mollica faces 34 mail fraud counts for mailing checks drawn on a BHC account at Regions Bank and mailed to a Birmingham post office box that she controlled, or drawn on one of the Synergy accounts and mailed to out-of-state post office boxes for E-Trade or Wells Fargo. Most of the checks from the Synergy accounts were for more than $20,000.
Mollica faces 13 money-laundering counts for taking money obtained through either the wire or the mail fraud and, in an attempt to disguise the source of the money, depositing it into a Wells Fargo Bank account she owned. All the cashier’s checks listed in money laundering counts 56 through 68 were deposited between August 2011 and March 2012, involved amounts less than $6,000, and were made payable to “Loan Trans – Wells Fargo.”
Mollica faces six other money-laundering counts charging she used criminally derived funds of more than $10,000 in transactions with a financial institution. The indictment lists four $25,000 transactions between November 2010 and May 2012, and one $30,000 transaction in March 2012.
Mollica faces five counts of filing false federal income tax returns for the calendar years 2008 through 2012, charging her with not reporting $1.7 million received through the scheme to defraud the government. According to the indictment, she owes the IRS more $500,000 for those tax years.
Separate from the scheme to defraud the government and the community health clinics, Mollica faces two mail fraud counts and an aggravated identity theft count in a scheme to defraud Globe Life and Accident Insurance Company. According to the indictment, Mollica took out a life insurance policy on her brother-in-law, but stated the insured was her brother. When the man died, Mollica sent letters to the insurance company demanding payment and submitted an amended death certificate bearing a forged signature of the certifying physician.
The indictment seeks to have Mollica forfeit to the government more than $900,000 seized from financial accounts in her name, as well as any money held in stock trading accounts in the name of three separate minor children, and a money judgment for the total amount involved in the fraud scheme.
The maximum penalties for the offenses charged are as follows:
• mail and wire fraud, 20 years in prison and a $250,000 fine;
• money laundering (counts 56-68), 20 years in prison and a $500,000 fine, or twice the value of the property involved;
• money laundering (counts 69-74) involving criminally derived property valued at more than $10,000, 10 years in prison and a $250,000 fine;
• aggravated identity theft, mandatory two years in prison added to any sentence imposed for the underlying felony and a $250,000 fine;
• filing a false tax return, three years in prison and a $100,000 fine.
The FBI, IRS and HHS-OIG investigated the case. Assistant U.S. Attorneys Tamarra Matthews Johnson and Melissa Kay Atwood are prosecuting the case.
