UMass Worker's Multimillion Dollar Scam Uncovered After His Death, School Says

Scheme gets uncovered only after worker's fatal car crash.


UMass Medical School Employee Stole Millions Before Death


When Leo Villani died in January after a car accident, his coworkers at the University of Massachusetts Medical School mourned the loss of a great colleague. They remembered a financial analyst who kept his $46,000 a year job despite getting a big inheritance, someone who was always "singing" and "laughing," as coworkers told the Boston Globe. What they didn't learn until after his death was that the 54-year-old Villani had been embezzling millions for years, according to authorities.

He'd claimed that his 4,000 square-foot McMansion and Porsche were financed with his "inheritance;" but the school said in fact, Villani spent the last five years routing $3.4 million intended for the state Medicaid insurance program to a fake corporation he had set up. The reported scheme was only uncovered after Villani's death when a review of his work uncovered "discrepancies" in the account, which was supposed to be used for administering payments for the state Medicaid program, known as MassHealth.

While the state attorney general Martha Coakley is now investigating, it's unlikely any criminal charges will be brought, according to the Boston daily. The school has, however, already fired a supervisor in Villani's division. (The report did not mention Villani's relationship with the fired employee.)

Villani's wife Julie has not commented to the press, but she is reported to be cooperating with the investigation. State investigators have said that they are hoping to recover all of the missing funds, but if they do not, they may sue Villani's estate.

"It's unbelievable. The level of it, the depth of it, was staggering," Edward Keohane, vice chancellor for communications at UMass Medical School, told the Boston Globe. "It was an appalling scam by a guy who was committed to defrauding an organization."

According to the Globe report, Villani had reportedly at least once referred to top managers in his division, Commonwealth Medicine, as "poverty pimps," an allusion to the fact that some earned whopping salaries, as much as $590,320 a year, even while being responsible for administering Medicaid. MassHealth, which provides health insurance for the poor and nursing home residents, is being blamed for contracting with Commonwealth Medicine without considering other bids from competitors.

"A contract like this should have been opened to . . . competitors who could have provided security and double and triple checks against theft," Gregory Sullivan, who was the state's inspector general until last fall, told the Boston Globe.

And with little oversight, Villani was also able to pull off his scheme, critics argue. Villani allegedly created an account he called, "Massachusetts Estate Recovery," which he must have known many MassHealth participants used as shorthand on checks that were supposed to be written to the "Massachusetts Estate Recovery Unit." As a result, he didn't even have to change anything on the some 75 to 95 checks he's alleged to have stolen.

Keohane defended the school, telling the Globe: "We stand by the financial controls that have enabled us to successfully recover over $500 million in the last decade for the Commonwealth."

As AOL Jobs reported in the spring, worker embezzlement schemes are at a five-year high, as many frauds that were launched at the beginning of the financial crisis are only now being discovered.

In total, there were 538 new arrests or indictments of workers who allegedly stole a total of $735 million last year from schemes worth more than $100,000, according to Boston-based security firm, Marquet International. The total is the highest in five years, and as Marquet CEO Chris Marquet told AOL Jobs in May, "major embezzlements usually take five years to be found out, so many schemes that began at the beginning of the crisis are just beginning to pop up."

And as it turns out, Villani does not fit the profile of the usual workplace embezzler. Nearly two out of 3 alleged workplace embezzlers from major schemes last year were women, according to Marquet International. The majority were in their 40's and worked as bookkeepers or treasurers. Why? The embezzlers "need to have risen to the level of authority in an organization where they are able to scheme against the company," Marquet said. And, he said, "bookkeepers and people in that role tend to be women."

Villani, for his part, was certainly remembered for his unassuming persona when he passed away. "He would go to group cookouts and lunches," one colleague told the Boston Globe.
Filed under: Employment News
Dan Fastenberg

Dan Fastenberg

Associate Editor

Dan Fastenberg was most recently a reporter with TIME Magazine. Previously, he was a writer for the Thomson Reuters news service's Latin America desk. He was also a reporter and associate editor for the Buenos Aires Herald while living in South America.

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vglass2362

An old phrase, "Figures don't lie but lairs often figure." It's unfortunate but opportunity and temptation can simply be too great for some people, hence crimes of opportunity. I suspect these things often start small with the intention of replacing the money taken but then with time and greed that initial plan is forgotten. This can be nothing new; I can envision an Earl or Duke personally counting the noses of his herd, not trusting the tax collectors working for him. The temptation must be great for book keepers who view things as beans and things rather than actual money; just numbers and we all know one can make most any argument with numbers no matter the position. But just like that snow ball rolling down hill, sooner or later momentum and gravity take over and it is impossible to stop. Bank robbery without the gun or bomb; without the bank actually. And whose job is it anyway to count noses?

November 05 2013 at 6:25 PM Report abuse rate up rate down Reply
Bubble Burster

WHY am I NOT surprised?

I have no doubt that his close friends also benefited from this FRAUD.

Yes, what a shining example he is for ACADEMIA.

September 26 2013 at 12:17 PM Report abuse rate up rate down Reply
MJ Brewer

It's sad we have thieves that would steal at all, much less from people who can't afford going without. His wife had to know something was up with that car and house she was in. This is so devastating and remarkably sad.

September 20 2013 at 12:37 AM Report abuse rate up rate down Reply
DEBORAH

He was a quiet man...

September 19 2013 at 11:16 PM Report abuse rate up rate down Reply
ectullis

Now we know why he was always laughting and singing

September 19 2013 at 9:49 PM Report abuse +4 rate up rate down Reply
John

welcome to the future of Obamacare

September 19 2013 at 9:44 PM Report abuse -4 rate up rate down Reply
1 reply to John's comment
Pastor Hillary

Mass Health care was started by GOP Mitt Romney!

September 19 2013 at 10:31 PM Report abuse +2 rate up rate down Reply
1 reply to Pastor Hillary's comment
jiminey99

So??

September 19 2013 at 10:36 PM Report abuse -1 rate up rate down
CPA11973

the U of M should volunteer to repay every cent that is otherwise not recovered. At the same time the school should be renamed Universilly Of Massive Fraud (typo's intended)

September 19 2013 at 9:35 PM Report abuse rate up rate down Reply
Jackjmass

See, who would have thought that such a nerdy looking guy was so nervy?

September 19 2013 at 9:31 PM Report abuse -2 rate up rate down Reply
miket1947

This is what happens in these liberal states. Government gets so big and complicated that crooks sneak in and pull stuff like this.

September 19 2013 at 9:26 PM Report abuse -3 rate up rate down Reply
brachm5

"Sloth" another one of the 7 deadly sins better known as Laziness......that's why no one uncovered this deception Unless there was a paycheck attached to checking this guys numbers, No one did anything!!!!!!!!!!

September 19 2013 at 9:23 PM Report abuse -1 rate up rate down Reply

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