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Press Release

KC Woman Pleads Guilty to Embezzling $558,000 from Health Care Foundation

For Immediate Release
U.S. Attorney's Office, Western District of Missouri

KANSAS CITY, Mo. – A Kansas City, Mo., woman pleaded guilty in federal court today to embezzling almost $558,000 from the health care foundation that employed her as an accountant.

Kathleen Frederico, 51, waived her right to a grand jury and pleaded guilty before U.S. District Judge Greg Kays to a federal information that charges her with one count of wire fraud.

Frederico was employed as the accounting and special projects manager at Saint Luke’s Foundation, a non-profit organization established to support Saint Luke’s Hospitals and Health Systems with funding for medical and nursing education, research, charity care, and medical programs, from May 7, 1999, until she was terminated from employment on Feb. 23, 2018.

By pleading guilty today, Frederico admitted that she conducted two related fraudulent embezzlement schemes while employed at Saint Luke’s Foundation. The government’s evidence is that Frederico stole a total of $557,675 from the foundation.

She began embezzling from the foundation in June 2003 and continued to embezzle until March 29, 2017. The investigation has revealed Frederico’s spending of the embezzled funds included more than $150,000 on shopping and retail; more than $67,000 in cash; more than $30,000 in travel; more than $21,000 in internet drug purchases; and mortgage payments, utility bills, and other living expenses.

In the primary fraud scheme, Frederico created unauthorized checks made payable to herself. To conceal the embezzlement, she entered a different payee into the general ledger and created or falsified corresponding invoices. The government’s evidence is that through this method, Frederico embezzled at least $452,342.

Frederico also created unauthorized checks in which the foundation paid her personal credit card bill, and on two occasions, a relative. The government’s evidence is that through Frederico’s second fraud scheme, she embezzled at least $105,333.

Under federal statutes, Frederico is subject to a sentence of up to 20 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the FBI.

Updated June 4, 2019

Financial Fraud