Head Of Mental Health Clinic Charged In Fraud Scheme Involving Federal Funds
PHILADELPHIA – An indictment was unsealed today charging Renee Tartaglione, 60, of Philadelphia, PA, with conspiracy, fraud, and theft involving a nonprofit clinic which provides mental health services to persons eligible under Medicaid. According to the indictment, Tartaglione defrauded the Juniata Community Mental Health Clinic (JCMHC) by misappropriating funds of the clinic. The charges were announced by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge William F. Sweeney, Jr., IRS Criminal Investigations Special Agent-in-Charge Akeia Conner, and Philadelphia Inspector General Amy Kurland.
Specifically, it is alleged that between 2007 and 2015, Tartaglione, as President of JCMHC’s Board of Directors, defrauded and stole money from JCMHC through a series of actions designed to benefit Tartaglione at the expense of the clinic. It is alleged that Tartaglione purchased the building on 3rd Street in Philadelphia which housed the clinic and then raised the rent, repeatedly, causing the clinic’s rent for the 3rd Street building to increase from $4,500 per month to $25,000 per month.
It is further alleged that in July of 2010, a co-conspirator, known to the Grand Jury, made a deposit on the purchase of a building located on 5th Street in Philadelphia using a check signed by defendant Tartaglione. In December 2011, the conspirators, through Tartaglione’s company, Norris Hancock LLC, purchased the building on 5th Street, and, in December 2012, leased it to JCMHC under a lease that called for rent of $35,000 per month for the first two years, and $75,000 per month for the next three years. The indictment alleges that the rent Tartaglione charged the nonprofit clinic was substantially in excess of the market rent.
The indictment alleges that neither the rent increases nor the lease agreements were approved by JCMHC’s Board of Directors and that Tartaglione and her co-conspirators created false and fictitious documents in an attempt to make the transactions appear legitimate.
The indictment also charges that Tartaglione defrauded and took money from JCMHC through kickbacks from persons who were issued checks drawn on JCMHC’s accounts, and by causing JCMHC to pay Norris Hancock more than 12 months of rent in some years.
The indictment further alleges that Tartaglione falsified Federal income tax returns by underreporting her income for tax years 2008, 2009, 2010, and 2012.
“Non-profit organizations, including those that deliver health care, hold a special place in our society, and the people who manage them are required to act in the best interests of the nonprofit,” said Memeger. “When instead, those trusted leaders decide to commit fraud, and line their pockets with the funds of the nonprofit, they appropriately face the severe consequences of a federal prosecution.”
“The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” said Conner. “With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist federal law enforcement agencies with these types of cases by following the money.”
“We’re committed to holding nonprofits accountable because of what’s at stake: the well-being of some of our most vulnerable friends and neighbors,” said Kurland. “For those who depend on our nonprofits, the impact of fraud is real and direct. It’s the bed that’s no longer available at a local shelter. It’s the shuttered soup kitchen in a neighborhood that desperately needs one.”
If convicted of all charges, the defendant faces a substantial prison term, restitution, possible fines, supervised release, and special assessments.
This case was investigated by the FBI, IRS Criminal Investigation, and the Philadelphia Office of the Inspector General. It is being prosecuted by Assistant United States Attorney Bea Witzleben.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.