The former pharmacy director at Children’s Hospital & Medical Center accused of embezzling more than $4.6 million from the hospital was sentenced to four years in federal prison Monday in U.S. District Court.
Lisa Kwapniowski, 49, was also ordered to pay the hospital more than $3.7 million in restitution. She has already repaid $1.157 million, including almost $278,000 she submitted to the court Monday from the sale of a home. After her prison term is complete, she will be required to serve three years of supervised release.
Kwapniowski pleaded guilty to wire fraud in February. She was fired from Children’s in June 2018 after being accused of embezzling the money. According to federal court filings, she defrauded the hospital between 2010 and 2018, at one point setting up a fake company and billing the hospital for a fake drug. She could have been sentenced to 20 years in prison.
Her attorney, James McGough of Omaha, argued for a prison sentence of no more than three years. He said Kwapniowski accepted responsibility for her actions from the start, walking investigators through what she had done and when she had done it. “She almost immediately came clean,” he said, adding that’s not usually the case in such situations. Kwapniowski, he said, met the “gold standard of what you do” when fully repentant.
He said Kwapniowski wasn’t someone the court has to worry about getting into the same situation again. Her case stemmed not from a gambling or drug habit but began with financial stress and unfortunately became “intoxicating,” as well as convenient, and grew.
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She also began paying back the hospital immediately, he said, selling assets and getting a job until her case became known publicly.
Kwapniowski apologized to Children’s and hospital officials, saying she was sorry that she betrayed their trust.
She said the hardest part was knowing what she had done to her family — telling her husband and seeing the hurt and anguish in his eyes, telling her children that the stories they had heard were true.
“To know that I did that to them ... it’s something that I can never undo and will always regret and feel sorry for,” she said.
But Donald J. Kleine, assistant U.S. attorney, said that Kwapniowski stopped only after she was investigated and that her theft involved a “sophisticated scheme” carried out so she could live a “lavish lifestyle.”
Her sentence, he said, should serve as a general deterrent to future crimes.
Senior U.S. District Court Judge Laurie Smith Camp said that Kwapniowski’s scheme was “very repetitive and very inventive” and that she obviously was intelligent, although she “used her intelligence to cheat and defraud her employer.”
Sometime before 2010, according to federal court filings, Kwapniowski began submitting fraudulent invoices to the hospital.
In early 2012, she set up a business she named RxSynergy. She began to submit fraudulent invoices for pharmaceuticals and supplies from RxSynergy to Children’s. Neither RxSynergy nor Kwapniowski ever provided any of the goods in the invoices to Children’s. Some of the RxSynergy invoices were for a fake drug called Broxcilam. Kwapniowski fraudulently invoiced the hospital at least 227 times between 2012 and 2018.
Federal officials also alleged that Kwapniowski submitted fraudulent invoices to the hospital between January 2012 and November 2013 that appeared to come from a legitimate pharmaceutical vendor called PharMedium.
She used a Children’s credit card to pay a PayPal account she created. She would submit the fraudulent PharMedium invoices to Children’s as justification for the credit card bill, and Children’s would pay the credit card company directly.
Kwapniowski then transferred funds from the PayPal account to her personal account.
Children’s Hospital said in a statement after the sentencing, “We appreciate the work of law enforcement and the United States Attorney’s Office on this matter and we are satisfied that Ms. Kwapniowski is being held accountable for her actions. This was the first time an event of this nature has occurred in our 70-year history, and we remain staunchly committed to proper fiduciary management and stewardship.”
In issuing the sentence, Smith Camp said that setting a general deterrent is important in financial crimes but that she didn’t see a need for a specific deterrent in Kwapniowski’s case.
Under her order, Kwapniowski must report to prison in late August.