Joseph Satava III, 69, was charged by way of information with one count of theft or embezzlement in connection with health care. An information bypasses the grand jury process and typically involves an agreement with the defendant for a plea.
Dan Wightman, one of Satava’s defense attorneys, said his client has reached a plea agreement with federal prosecutors following months of negotiations, although he declined to discuss the specifics.
“It’s a tragic case because this is a guy who’s never done anything wrong in his life,” Wightman said.
Satava allegedly stole the money between August 1997 and November, according to a news release from the office of U.S. Attorney for Northern Ohio Steven Dettelbach.
Satava, who began working for Medical Mutual in 1971, used his position as a manager to identify weekly printouts of company accounts to identify new companies that had signed up for health insurance and what their first payments were, according to the news release. Those payments were known as “binder payments” and were credited to the clients’ accounts at the end of each month.
Most weeks Satava allegedly selected two to four companies that had made binder payments under $5,000 and created reimbursement checks for the same amount, the release said. He then created paperwork that listed the name of an employee with the client company and filled out paperwork stating that the insurance coverage had been denied.
Rather than run the checks through the normal “binder suspense account,” Satava charged the checks to another account that processed billions of dollars per year.
“As such, the checks created by Satava were immaterial in amount relative to the volume of funds passing through this account, so the checks were not detected,” the release said.
By using the larger account, Medical Mutual didn’t know about the reimbursement checks, which Satava forged the client company employee names to before depositing them in his own checking account, according to prosecutors.
Satava allegedly created 1,382 checks using the method during his time as manager of credit and collections. He used the money to cover living expenses, including purchasing furniture and household items, paying the living expenses for his adult son, a car loan, travel, personal vacations and a retirement home on Lake Erie.
“It started small and unfortunately it ended up being what it is,” Wightman said.
He said the thefts were discovered around the time Satava retired from the company.