Former University Of Louisville Executive Charged With Embezzling Funds Tied To UofL Medical Groups And Tax Fraud
– Diverted $2.8 million
– Failed to report $2,470,735 to Internal Revenue Service
LOUISVILLE, Ky. – A former University of Louisville accountant, promoted to Executive Director of the Department of Family & Geriatric Medicine at the University of Louisville School of Medicine (DFGM) was arraigned today on a seven-count federal indictment charging theft and bribery in programs that receive federal funds, money laundering, mail fraud, and filing false federal income tax returns, announced David J. Hale, United States Attorney for the Western District of Kentucky.
As part of the nearly six year scheme, Perry Chadwick Vaughn, 36, of Sellersburg, Indiana, allegedly diverted contractual checks and patient payments to the University Family and Geriatric Medicine Associates account then withdrew $2,809,489 for his personal use and benefit.
According to the indictment, between January 2007 through August 2013, Vaughn was the Executive Director of the Department of Family and Geriatric Medicine at the University of Louisville School of Medicine (DFGM-UofL) and business manager of its affiliated private physician practice groups (collectively “DFGM-Practice Groups”). As Executive Director, he was responsible for all business and accounting functions, including payroll, budgeting, tax reporting, accounts receivable, accounts payable, and bank reconciliations. The DFGM-Practice Groups included the Department of Family and Community Medicine, University Family Practice, University Family and Geriatric Medicine Associates, and University Family Practice Associates Center for Primary Care. The indictment alleges Vaughn used his position as Executive Director to defraud and obtain money by false pretenses from DFGM-UofL and used his position as business manager to defraud and obtain money by false pretenses from four UofL private physician practice groups.
Between November 2007 through March 2013, Vaughn allegedly diverted forty contractual checks issued to DFGM-UofL to bank accounts of DFGM-Practice Groups totaling $666,810. He then made withdrawals and payments from DFGM-Practice Groups bank accounts for his own personal use and benefit. Between January 2007 and August 2013, Vaughn allegedly diverted $604,025 in patient payments from DFGM-UofL accounts into bank accounts of the DFGM-practice groups. He then made withdrawals and payments from DFGM-Practice Groups bank accounts for his own personal use and benefit. During that same time period, Vaughn allegedly made withdrawals and payments from DFGM-Practice Groups bank accounts totaling $2,809,489 for his personal use and benefit. $1,270,835 of the funds were from payments diverted from DFGM-UofL to DFGM-Practice Groups bank accounts. The remaining $1,538,654 in funds taken from the DFGM-Practice Group bank accounts were from general funds of the DFGM-Practice Groups. During that same time period Vaughn allegedly made a number of misrepresentations to University of Louisville Audit Services by transferring funds between bank accounts to conceal his theft and by providing false bank statements of the DFGM Practice Groups.
Further, Vaughn is charged with money laundering for making financial transactions involving the proceeds of unlawful activities designed to conceal the nature, location, source, ownership, or the control of the proceeds of the specified unlawful activities. According to an Affidavit attached to a criminal complaint, from 2011 to 2013, Vaughn purchased/leased nine luxury vehicles with a combined value of nearly $475,000. Further, Vaughn purchased real estate, a $9,000 bracelet, luxury vacations, and a Las Vegas casino.
Further, Vaughn is charged with four counts of filing false federal income taxes with the United States Internal Revenue Service (IRS) for calendar years 2008 through 2012. Vaughn is charged with failure to report $377,492 in total income for calendar year 2008, $610,470 in total income for calendar year 2009, $160,121 in total income for calendar year 2010, $546,022 in total income for calendar year 2011, and $776,630 in total income for calendar year 2012.
In addition, on September 3, 2013, U.S. District Judge John G. Heyburn II granted the United States’ motion for Temporary Restraining Order enjoining and prohibiting Vaughn, (including family members, financial institutions, and other entities having possession or control of Vaughn's assets), from transferring, selling, dissipating, concealing, or otherwise disposing of, in any manner, his assets in real or personal property, owned, gained or acquired by him or on behalf of his ex-wife.
A trial date has been set for June 3, 2014. If convicted at trial, Vaughn faces up to 55 years in prison, a 16 year period of supervised release, and a fine of $1,250,000.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and is being investigated by the University of Louisville Police Department, the United States Secret Service, the Internal Revenue Service, Criminal Investigations, and the United States Postal Inspection Service.
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The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless