Former Hacienda HealthCare CEO And CFO Indicted On Fraud And Racketeering Charges

By Kathy Ritchie
Published: Wednesday, September 2, 2020 - 4:33pm
Updated: Friday, September 4, 2020 - 8:20am

Hacienda HealthCare facility
Sky Schaudt/KJZZ
Hacienda HealthCare facility in Phoenix.

The Arizona Attorney General’s Office announced that two former Hacienda HealthCare executives have been indicted on fraud and racketeering charges.

The Attorney General’s Office also announced that Hacienda has agreed to a massive financial settlement. 

Ex-Hacienda CEO Bill Timmons and his former chief financial officer, Joseph O’Malley, were indicted on fraud and racketeering charges.

The indictment alleges Timmons and O’Malley misallocated funds from AHCCCS, the state’s Medicaid system, and the Department of Developmental Disabilities by manipulating costs to avoid repayments of state funds in favor of inflated salaries and bonuses.

"So starting in 2013, Hacienda entered into a cost settlement reconciliation contract with the state in which Hacienda would be given a certain amount of money per day per patient, and the contract stated that if Hacienda received an overpayment, Hacienda would reimburse the state essentially," said Katie Connor, a spokesperson with the Arizona Attorney General’s Office.

ut Connor says the contract was with Hacienda’s intermediate care facility. The Attorney General’s Office alleges they were using that money to pay for their other facilities.

Timmons could face a maximum sentence of 37 years, while O’Malley could face a maximum of 12 years.

The Attorney General’s Office also reached a financial settlement with Hacienda. It has agreed to pay the state back more than $11 million.

Hacienda made headlines in early 2019 when an incapacitated resident was allegedly raped by her nurse and later gave birth.