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Former Saint Luke's Foundation employee pleads guilty to embezzlement

Posted at 1:13 PM, Jun 04, 2019
and last updated 2019-06-04 15:45:37-04

KANSAS CITY, Mo. — A former Saint Luke’s Foundation employee embezzled more than $550,000 from the nonprofit organization over a nearly 14-year span, according to prosecutors.

Kathleen Frederico, 51, of Kansas City, Missouri, pleaded guilty to one count of wire fraud in federal court Tuesday, the U.S. Attorney’s Office for the Western District of Missouri said in a news release.

Prosecutors said Frederico, an accounting and special projects manager, conducted two embezzlement schemes while employed at the foundation, stealing a total of $557,675 between June 2003 and March 2017.

In the first scheme, she created unauthorized checks made payable to herself, embezzling at least $452,342, prosecutors said. In the other scheme, she created unauthorized checks in which the foundation paid her personal credit card bill and twice paid a relative. Through this scheme, she embezzled at least $105,333.

An investigation revealed that Frederico spent the funds in various ways, including more than $150,000 on shopping and retail, more than $30,000 in travel and more than $21,000 in internet drug purchases.

She was terminated from the foundation in February 2018. She had worked at the foundation since May 1999.

Frederico faces up to 20 years in federal prison without parole. A sentencing hearing has not been set.

The Saint Luke's Foundation supports Saint Luke's campuses in the Kansas City metro area with funding for medical and nursing education, research, charity care and medical programs.

The foundation released the following statement about the case:

Results of an independent forensic audit commissioned by Saint Luke’s Foundation leadership in 2018 revealed potential financial misconduct by a former Foundation employee. These findings were reported promptly to the appropriate authorities. While their investigation got underway, we partnered with auditors and forensic accounting experts to ensure best practices in financial management and oversight were firmly in place. Today, we extend our gratitude to law enforcement for their support and diligent efforts on our behalf, and thank them for the successful resolution of this case.
St. Luke's Foundation