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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Georgia

Tuesday, December 9, 2014

Former Grady Hospital Payroll Director Convicted Of Embezzlement Scheme

ATLANTA - Donald Thomas, the former payroll director for the Grady Memorial Hospital Corporation, has been convicted by a jury for stealing over $480,000 from one of Georgia’s largest hospitals.

“Thomas embezzled from a longstanding public institution that provides medical care to the poor and underserved in the Atlanta area and beyond,” said United States Attorney Sally Quillian Yates.  “By its guilty verdict, the jury has held him accountable for stealing from taxpayers and Grady’s patients.”

J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “At a time when health care institutions such as Grady Hospital are under the strain to meet the needs of their community, to include those served by publicly funded programs, the criminal actions of former Grady Hospital Payroll Director Thomas are all that more egregious.  The conviction of Thomas should serve as a reminder that the FBI is part of an oversight process involving any and all allegations of thefts from federal health care programs and their related institutions and anyone involved in such activity could find themselves in front of a jury trial on similar charges.”

According to United States Attorney Yates, the charges and other information presented in court: From December 1994 through June 2011, Thomas served as Assistant Controller for Grady Memorial Hospital Corporation (“Grady”).  Grady is one of the largest providers of charitable care in the state of Georgia.  It relies significantly on federal funding, including Medicare and grants, to provide medical services regardless of ability to pay. 

From January 2008 until June 2011, Thomas oversaw payroll for all 5500 Grady employees.  He had access to and knowledge of Grady’s payroll system, which he used to falsify additional vacation pay and severance pay for terminated Grady employees.  Since the employees had already left Grady, Thomas calculated that it was less likely that his fraud would be detected.  After adding the additional compensation to the terminated employees’ payroll records, Thomas then removed their bank account numbers and replaced them with his own.  As a result, the fraudulent payments were deposited into his own bank accounts.  A total of 134 fraudulent payments were made in this manner.

Additionally, in two instances, Thomas falsified pay and created paper checks for the additional compensation.  The checks were made payable to terminated Grady employees; however, Thomas forged the employees’ signatures to endorse the checks, and deposited them into his own bank account.

The scheme was discovered when a terminated employee contacted Grady to inform the payroll staff that her 2011 W-2 tax form showed more compensation than she had actually earned.  Further investigation revealed that her payroll records had been altered and additional pay in her name had been deposited into an account controlled by Thomas.  Though Thomas had attempted to cover up his embezzlement by reversing most of the fraudulent changes, in a few instances, he had failed to do so.  As a result, additional wages and compensation were added to several employees’ year-end W-2 tax forms.

Over the course of the scheme, Thomas obtained over $480,000 in falsified vacation and severance pay. 

The jury convicted Thomas, 55, of Atlanta, Ga., of six counts of theft from an organization receiving federal funds and six counts of wire fraud related to the fraudulent direct deposit payments.  He was also convicted of two counts of bank fraud related to the forged checks.  Sentencing is scheduled for February 25, 2015, at 10:30 a.m. before United States District Judge Charles A. Pannell, Jr.

This case is being investigated by the Federal Bureau of Investigation.

Assistant United States Attorneys Shanya Dingle and G. Scott Hulsey are prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at or (404) 581-6016.  The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is         

Updated April 8, 2015