By Adam Brandolph

Published: Monday, February 25, 2013, 2:18 p.m.
Updated: Tuesday, February 26, 2013

A former financial services manager for West Penn Allegheny Health System siphoned more than $700,000 from the struggling medical center to gamble at casinos in Pennsylvania, Illinois and Atlantic City, the Allegheny County District Attorney's Office said on Monday.

Ira L. Johnson, 52, of Penn Hills is facing 10 charges, including theft, unlawful use of a computer, receiving stolen property and misapplication of entrusted property. The former manager of patient financial services and manager of revenue/cash receipts has a preliminary hearing scheduled for March 5. Johnson couldn't be reached for comment. His wife declined comment.

Authorities said Johnson funneled checks made out to Allegheny Medical Practice Network and West Penn Physician Practice Network into a PNC Bank business checking account that he opened on July 26, 2007.

Detectives said Johnson withdrew money — sometimes more than $10,000 each time — at Rivers Casino on the North Shore, Meadows Racetrack and Casino in North Strabane, Presque Isle Downs in Erie, Mountaineer Casino Racetrack & Resort in Newell, W. Va., Harrah's Chester Casino and Racetrack, Bally's Atlantic City and Grand Victoria Casino outside Chicago. Bank statements showed no evidence that he used any of the money for West Penn Allegheny business, detectives said.

Dan Laurent, a spokesman for the health system, said Johnson was employed from 2006 until he was fired on Nov. 8, 2011, a day after he deposited two checks totaling $350 into his account.

West Penn Allegheny executives met with detectives from the district attorney's office on Jan. 4, when an employee noticed suspicious activity. The company eventually conducted an internal audit, which uncovered the missing money.

“Since we discovered his actions, we have thoroughly scrutinized and enhanced our internal control processes to deter any individual, regardless of work responsibility or intent, from perpetrating this type of crime again,” Laurent said. “WPAHS is grateful to the Pittsburgh police, Allegheny County and the District Attorney — all of whom responded immediately and are helping to ensure that justice is served in this case.”

Laurent said West Penn Allegheny has insurance to protect itself from such theft and plans to file for reimbursement.

Stephen Foreman, associate professor of health care administration at Robert Morris University, said the health system should have noticed the money was missing earlier.

“It makes you wonder because if he was intercepting checks, there should have been other systems in place that would have caught that,” Foreman said. “They need to explain how their systems allowed this to happen.”

The health system reported a $112.5 million operating loss in its most recent financial year, more than double the loss of the previous year.

“They may not have paid as much attention to internal issues,” Foreman said.

Adam Brandolph is a staff writer for Trib Total Media. He can be reached at 412-391-0927 or abrandolph@tribweb.com.

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