Memorial Herman Printing And Mail Services Manager Admits To Embezzling Nearly $10 Million In False Invoicing Scheme
HOUSTON – Kenneth Joseph Wild II, 49, of Katy, has pleaded guilty to defrauding his employer, Memorial Herman Health Systems, of nearly $10 million over a 14-year period, announced U.S. Attorney Kenneth Magidson.
In a proceeding before the Honorable Kenneth M. Hoyt this morning, Wild entered his guilty plea to a criminal information charging a single count of mail fraud.
Wild’s plea agreement explains that on or about Feb. 23, 2001, he was appointed as manager of Printing and Mail Services, a division within Memorial Herman which oversees and outsources the creation of all informational and promotional materials disseminated by Memorial Herman. In this role, Wild had the responsibility for approving invoices submitted for printing services utilized by Memorial Herman and for forwarding those invoices to accounts payable for payments to be remitted via checks delivered by U.S. mail.
On or about March 8, 2001, just two weeks after Wild’s promotion to management, an entity named Digital Designs Limited began submitting invoices to Memorial Herman for printing and data conversion services purportedly provided to Memorial Herman. Wild used his position to cause the Digital Designs invoices to be approved. Over the span of 14 years, from March 2001 through March 2015, Wild submitted 229 invoices totaling $9,302,667.29 in the name of Digital Designs for services that were never provided to Memorial Herman.
On March 11, 2015, Memorial Herman’s chief audit and compliance officer received an anonymous, hand-written letter alleging the Digital Designs account was an anomalous, ghost account and asking for an investigation. As a result, Memorial Herman swiftly conducted a preliminary review of the account and immediately reached out to law enforcement to report the incident.
The investigation revealed that the address listed for Digital Designs was a P.O. Box opened by Wild in 1996. In October 2001, Wild had obtained an assumed name certificate from the Harris County Clerk’s Office for “Digital Designs of Texas, P.O. Box 36345, Houston, TX 77236.” The investigation further revealed that payments remitted to Digital Designs were deposited into a bank account which was assigned to Wild with a dba of Digital Designs. Wild deposited the checks from Memorial Herman into that account and then transferred those funds to other accounts he controlled. He then used the funds to support his extravagant lifestyle which included, among other things, making significant personal expenditures, purchasing a home and making substantial improvements and extensive international travel for himself and his family and friends.
As part of his plea agreement, Wild agreed to forfeit his home and all of its contents, his vehicles, his 401K pension plan with Memorial Herman and any other financial assets in his possession. These funds will be used to pay restitution to Memorial Herman.
Judge Hoyt accepted the plea today and has set sentencing for June 29, 2015, at which time Wild faces up to up to 20 years in federal prison and a possible $250,000 maximum fine. He has been in custody since his arrest on March 21, 2015, where he will remain pending that hearing.
The charges are the result of an investigation by U.S. Postal Inspection Service. Assistant U.S. Attorney Jason Varnado is prosecuting the case.