Former Allina official charged with quarter-million dollar embezzlement
A former Allina Health vice-president suspected of embezzling $269,000 from the company has been charged with seven counts of theft by swindle, Hennepin County Attorney Mike Freeman and Minnesota Department of Commerce Commissioner Jessica Looman announced Thursday.
David Matthew Johnson, 53, of Inver Grove Heights, is expected to make his first appearance Feb. 14. Because the theft by swindles began in about 2004, the criminal complaint only accounts for crimes committed within the five-year statute of limitations. However, investigators suspect he embezzled closer to $775,000.
In May, Allina Health officials became suspicious that Johnson, vice president of talent and human resource services, had been submitting false mileage and personal reimbursement requests. On May 11, two Allina employees spoke to Johnson about their suspicions and allowed him to use his laptop to prove the validity of his expense reports, the complaint states. When he was unable to do that, he was placed on administrative leave and escorted from the headquarters building at 2925 Chicago Ave. S.
“We charge numerous employee embezzlement cases every year and it follows a pattern,” Freeman said. “The employee is highly trusted and, over time, the good financial safeguards stop being applied to that employee. But no one can predict which employee will let greed get the better of him or her, so those safeguards must be applied to everyone, all the time.”
Allina turned over much of its information to the Minnesota Department of Commerce Fraud Bureau investigators and they also executed search warrants at a credit union where Johnson had his accounts and for his company-issued laptop computer.
“Like all fraud, embezzlement involves not only theft but also an abuse of trust,” Looman said. “Unfortunately, embezzlement can go on for a long time, even years, before it’s detected because perpetrators will go to great lengths to cover up their crimes.”
According to the criminal complaint, Johnson’s scheme included false mileage reimbursements, falsified expense reports and improper use of his company credit card.
Workers at Allina began comparing Johnson’s work calendar and parking garage entrance and exit history with the dates and times of meetings he said he was attending when he submitted mileage and parking reimbursement requests. They also learned from meeting organizers that many of the meetings he claimed to be at never happened and those that did, he often was not there,
Johnson claimed to have taken 290 trips to St. Cloud for the St. Cloud Diversity Council, 195 trips to the TKDA Architectural firm, 175 trips to the Twin Cities Diversity Roundtable, 143 trips to the Health Occupation Student Association and 117 trips to the State Farm corporate headquarters in Woodbury. In addition, he routinely claimed to have driven to Allina health facilities in Buffalo and Cambridge. Employees there said Johnson never visited them.
In filing false expense reports, Johnson often used invoices involving the name of a printing company, the criminal complaint states. For instance, one invoice he forwarded for payment was to that company for $2,850. Investigators found what appeared to be the original invoice for $285 but a zero was added. Johnson would often attach a personal check from his credit union account to those invoices involving the printing company. However, none of those checks were ever sent to the company, so no funds were withdrawn from Johnson’s account. The printing company went out of business around 2000.
In 2014, Johnson was issued a company credit card. Almost immediately, without authorization from Allina, he purchased season tickets for the Minnesota Vikings, Minnesota Timberwolves, Minnesota Lynx and University of Minnesota. His bank account records indicated he had purchased those season tickets out of his personal account before getting the company credit card, according to the criminal complaint. He also asked the ticket sales representatives to send multiple, smaller invoices for the tickets so he would not exceed the credit card limit. The $184,344 he charged to his corporate credit card for tickets fell entirely within the statute of limitations.
Criminal Complaint (PDF)