GLENDALE (WITI) -- 49-year-old Janice Nieman of Milwaukee has been charged in connection with the embezzlement of $1 million from Wheaton Franciscan Healthcare over the last decade. Nieman served as an employee in the finance department of Wheaton Franciscan Healthcare in Glendale.
Managers at the facility discovered the massive cover up while looking through payroll records.
A criminal complaint in the case charges Nieman with three counts of theft (value exceeding $10,000) and one count of unauthorized use of personal identifying information or documents (obtain money).
The complaint says Nieman served as a payroll specialist, and had been employed at Wheaton Franciscan's 400 West River Woods location in Glendale for 15 years.
The complaint says Nieman had the responsibility of processing payroll for Wheaton Franciscan All-Saints, Inc., Wheaton Franciscan Home Health & Hospice, Inc. and Wheaton Franciscan Healthcare-St. Francis, Inc. -- along with St. Michael Hospital of Franciscan Sisters of Milwaukee Inc, and Wheaton Franciscan Healthcare - Terrace at St. Francis, Inc.
The complaint indicates that on no fewer than 2,010 occasions between 2004 and 2013, using personal identifying information from one of 848 different employees, Nieman would make false entries into the Wheaton payroll system -- leading to the unauthorized transfer of monies into her personal bank account.
The total amount transferred to Nieman's account is $844,881.83 -- and the total loss to Wheaton victims is $1,076,926.77 -- according to the complaint.
The complaint indicates Nieman showed up at the Glendale Police Department on October 17th and fully and freely admitted to diverting payroll funds into her own account.
According to the criminal complaint, the centerpiece of this scheme revolved around Paid Time Off employee accounts.
The complaint says each Wheaton employee had a Paid Time Off account, accessible via the company's computer-based employee payroll system.
In the normal course, an employee would report "X" hours of time off, and those hours would be applied by the Payroll Department against the employee's Paid Time Off account. The employee would then be paid as if they had actually worked the time off.
In the normal course, the employee would be given a physical pay slip reflecting the Paid Time Off payment.
According to the criminal complaint, Nieman took a series of calculated steps in manipulating the system so as to effect an unauthorized Paid Time Off transaction:
The criminal complaint says Nieman would transfer the Paid Time Off funds into an account she herself used for direct deposit as a Wheaton employee.
According to the criminal complaint, prior to April 12 of 2013, Wheaton used a payroll system not accessible online by employees -- which generated a paper pay slip distributed to employees.
The computer-based payroll system was implemented in April of 2013 -- and employees were able to view their payroll information and payroll history online.
The complaint says Nieman continued to manipulate Paid Time Off transactions via the computer-based payroll system with one significant change. According to the complaint, Nieman began targeting terminated employees that would not have access to the online payroll history report.
Nieman's undoing was prompted by a call from an employee who terminated her employment in May of 2013, but returned to work with Wheaton in June of 2013.
According to the complaint, that employee spoke with a senior payroll specialist -- concerned upon her renewed access to the online payroll system, which showed two payroll payments dated May 24th, 2013. That employee said one of the payments was received via direct deposit into her bank account, but the other payment, which appeared to be for 40 hours of work, was not deposited.
The complaint says the senior payroll specialist looked into the payments and was able to determine that the second payment was deposited into Nieman's account.
The discovery led to a more thorough search of records, leading to the discovery of all of the transactions in this case -- according to the complaint.
According to the criminal complaint, substantial portions of the money embezzled in this case was spent at Potawatomi Bingo Casino -- a total of $483,327.62.
The complaint says on at least 77 days, Nieman cycled more than $10,000 through the slot machines at Potawatomi.
According to the complaint, Nieman's bank statements reflect frequent gambling activity -- almost exclusively at Potawatomi.
When questioned by officials, Nieman told them she frequently used the names of registered nurses when diverting funds in this case because nurses made more money than other employees, according to the complaint. Nieman told officials she didn't choose lower paid employees because they were more likely to request pay records.
Nieman told officials her gambling issues began when she lost her job before she began employment with Wheaton. Nieman told officials she was depressed, and to deal with the stress she went to Potawatomi to gamble.
Nieman has a court appearance scheduled for Friday, December 20th.
Wheaton Franciscan on Monday, December 2nd released the following question and answer statement to FOX6 News:
What is Wheaton Franciscan's reaction to the charges?
The charges are in line with what we anticipated and are appropriate given the scope of the theft.
What is Wheaton Franciscan doing to make sure this doesn’t happen again?
Since the discovery of the theft, we immediately implemented additional controls to ensure that this scenario never happens again. For example, we revised the process for adding Paid Time Off hours to an associate’s account and the process for making changes to direct deposit information. Furthermore, we facilitated a comprehensive independent review and assessment of all financial controls. No additional weaknesses were identified in the independent audit.
Is there a danger of future associates stealing personal associate information?
By the nature of the job of processing payroll in any organization, individuals have access to personal information. Integrity is one of our organizational values, and the theft that took place was a huge breach of the trust by that former associate.
How will this affect current operations or the community?
We are working with our insurance company and expect to recover a significant portion of the direct amount taken through our policy that covers theft. There will still be other financial costs and time spent by our leaders and staff that won’t be recovered. It is an inconvenience to the affected associates but does not have any direct impact on our patients. However, to the extent that we are a not-for-profit organization that reinvests back into the communities we serve, this is an unfortunate use of time and money.
Cost of this process and the estimated losses (that include theft) as a whole?
The theft itself and tax implications to Wheaton totaled $1.1 million. The cost of other expenses is estimated at $200,000-$250,000. It will be some time before we know an exact number.
Process for affected associates?
We established a process where associates could either consult with their own tax preparer or use a tax professional from a company designated by Wheaton. From the beginning, we’ve been committed to ensuring that those affected associates would not experience negative financial consequences as a result of this situation. We regret that this theft occurred and have done what we can to minimize the inconvenience to our current and former associates.