Three former leaders of a Western Pennsylvania-based medical organization have pleaded guilty to defrauding the nonprofit of millions of dollars, the Department of Justice says.
PREVIOUS COVERAGE >>> 5 men, including 3 PA residents, accused of defrauding $2 million from nonprofit
The defendants are Drew Pierce, 58, of West Middlesex; Jack Laeng, 72, of Lake Milton, Ohio, and Mark Marriott, 58, of Sharpsville.
The three pleaded guilty in federal court to charges of conspiracy to commit wire fraud and money laundering. Marriott also pleaded guilty to filing a false tax return.
The court was informed that the Primary Health Network, based in Sharon, provides medical services to underserved communities regardless of their ability to pay.
From July 2015 through January 2019, Pierce served as CEO, Laeng as former CEO and Marriott as facilities manager.
The defendants used a company they owned, TopCoat, to overcharge PHN by inserting it between PHN and third-party vendors, prosecutors say. TopCoat paid the vendors and then billed PHN at inflated prices, with the defendants pocketing the difference.
In one instance in 2017, TopCoat received over $200,000 more from PHN than it paid to the actual vendor, prosecutors say. Additionally, Pierce, Laeng and others orchestrated a separate scheme involving kickbacks from third-party contracts, receiving over $1.7 million between 2013 and 2020.
Pierce, Laeng and Marriott are scheduled to be sentenced in March. They face up to 20 years in prison for wire fraud conspiracy and up to 10 years for money laundering conspiracy, with additional penalties for Marriott’s tax offense.
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