CPAP clinic employees convicted of embezzlement by employer | USAO-MN
MINNEAPOLIS — A federal jury has convicted two men of mail fraud and conspiracy to embezzle several hundred thousand dollars from Park Nicollet Health Services, U.S. Attorney Andrew M. Luger said.
Following a seven-day trial before Senior U.S. District Judge David S. Doty, Gregory Carl Koch, 59, of Minneapolis, and Jerome David Kangas, 58, of Blaine, were found guilty on 28 September 2022 mail fraud and conspiracy to commit mail. fraud. Kangas was also found guilty of structuring foreign exchange transactions.
According to evidence presented at trial, in June 2013, Kangas was hired as a clinician at the Park Nicollet CPAP Clinic, where Koch was the supervisor and then director. CPAP machines are commonly used devices to treat sleep apnea. Between June 2013 and June 2018, Koch and Kangas defrauded Park Nicollet out of hundreds of thousands of dollars in compensation. Although Kangas only worked after hours and on weekends to answer calls from CPAP patients, Koch entered over 8,500 weekday hours into Park Nicollet’s records to get Kangas paid for the work he did. he did not perform. On most days that Kangas was paid, evidence showed that he either worked for another employer or out of town. Evidence at trial also showed that Koch logged into the company network for Kangas and helped Kangas reset his computer password to cover up that Kangas was not performing as required by his job description. The scheme was uncovered when Koch was fired in 2018 following Park Nicollet’s acquisition by HealthPartners.
The structuring of the foreign exchange transaction related to a 12-day period in July and August 2017 when Kangas made six withdrawals between $5,000 and $5,500 at four different branches of Wells Fargo Bank, for a total of $30,500. Federal law requires banks to report foreign currency transactions over $10,000, as a means of detecting financial crimes. Four days after the last withdrawal of $5,500 from Kangas, Koch made a cash deposit of $29,300 into his own US bank account.
Koch and Kangas face potential sentences of five years on each count. A sentencing date has not yet been set.
This case is the result of an investigation by the FBI.
This case was tried by Assistant U.S. Attorneys Michelle E. Jones and Robert M. Lewis.