You Think that you Know SomeOne and then you find Out that you Don't

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. 

Article by Dan Fastenberg