A New Jersey woman admitted to embezzling more than $544,000 from a residential facility in Maywood, New Jersey, where she was employed, Senior Counsel Philip Lamparello announced on January 23, 2026. The 69-year-old defendant pleaded guilty to embezzling, stealing, and obtaining by fraud more than $544,000 in facility funds.
According to documents filed in the case and statements made by the defendant in open court, from in or about January 2017 through in or about December 2021, the defendant served as the managing director of a residential facility with approximately 136 units that provided housing for individuals over the age of 62 or with disabilities. Her responsibilities included supervising employees, providing information to the US Department of Housing and Urban Development (HUD), which provided significant funding for the facility, and paying the facility’s bills. She also issued salary and bonus checks to herself and at least four other employees in amounts approved by the facility’s Board of Trustees.
The defendant admitted that she issued salary checks that significantly exceeded the amounts approved by the Board on an annual basis, including checks to herself and four other employees. For example, she admitted that in 2021 she issued salary payments to herself exceeding her approved annual salary of $132,613 by more than $40,000, and that she inflated her approved bonus for the prior year by more than $2,500. She also admitted to issuing salary, bonus, and retirement account checks that exceeded the Board’s approved amounts for four other employees from 2017 through 2021. In addition, she admitted to issuing a supplemental insurance payment to a relative who was not employed by the facility.
In total, the defendant admitted to embezzling approximately $544,289.95 from the facility through these various means. As part of her plea agreement with the Government, she agreed to forfeit this amount.
The embezzlement charge carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 23, 2026.
Compliance Perspective
Issue
Failure to follow generally accepted accounting principles (GAAP) and maintain appropriate checks and balances can place a facility at risk for misuse of funds. This may jeopardize the protection of resident and facility assets and result in violations of state and federal laws. Every nursing facility should have systems in place to ensure that monetary transactions and supply purchases are properly reviewed and approved by a second party to prevent misappropriation, which can lead to fines, sanctions, and imprisonment.
Discussion Points
- Review policies and procedures to ensure a system of checks and balances is in place, preventing any single individual from both approving invoices and writing checks, thereby reducing the risk of embezzlement. Facilities may benefit from periodic review of these policies with an external consultant to ensure alignment with regulatory expectations and industry best practices.
- Provide training for staff in the accounting and billing departments to recognize, question, and report any reasonable suspicion of misconduct or illegal activity to their supervisor or via the Hotline. Med-Net Academy offers the Red Flags of Fraud course, which educates staff on identifying warning signs of fraudulent activity, understanding the consequences of failing to detect or report fraud, recognizing suspicious behavior by internal or external parties, and following proper procedures for reporting concerns and handling external communications.
- Conduct periodic audits of the facility’s and residents’ financial accounts, company invoices, bank statements, and credit card accounts to identify potential misuse or embezzlement. Address any concerns immediately. Facilities may also consider utilizing external reviewers or mock audit processes to proactively identify gaps, strengthen internal controls, and mitigate risk before issues escalate.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*