An Arizona health care CEO was sentenced to 14 years in prison for embezzling $33 million, authorities revealed on Friday.
Kevin Lamorris McKenzie, of Tucson, previously pleaded guilty to conspiracy to conduct wire fraud and embezzlement from a tribal organization, according to the United States Attorney’s Office for the District of Arizona.
McKenzie, who served as Chief Operating Officer and later CEO of Apache Behavioral Health Services (ABHS), is accused of running a plan to steal millions of dollars from ABHS and the White Mountain Apache Tribe between 2015 and 2023.
Health care CEO has to give up luxury cars, several properties, more
McKenzie’s sentence includes paying ABHS $33,155,701.
He also needs to give up many houses, luxury vehicles (including a Rolls-Royce, Ford Galaxie, Range Rover, and Cadillac Escalade), a utility trailer, and $55,000 in cash.
Furthermore, more than $364,447 seized in another instance will be applied to his outstanding balance.
These financial penalties demonstrate the extent of his embezzlement plan.
Details about embezzlement schemes health care CEO orchestrated
The 49-year-old utilized two bogus contracts to divert funds from ABHS to his own pockets.
Here are the specifics of the first contract he utilized to secretly transfer funds from ABHS to himself:
- ABHS paid over $35 million to a company called Helping Everyday Youth (HEDY).
- McKenzie had a secret deal with HEDY: they sent about $16 million to a shell company he controlled.
- McKenzie hid this arrangement from ABHS and disguised the transactions through his shell company.
- He even tried to pressure a witness to lie to investigators, prosecutors said.
Prosecutors described a second conspiracy that ran from 2018 to 2023. Here are the details:
- McKenzie, as ABHS CEO, made fake referral contracts with co-defendant Corina Martinez.
- These contracts claimed that Martinez’s company, Evolved Health Care Inc. (EHI), would refer employees to ABHS for payment.
- In reality, EHI never referred anyone.
- Using these fake agreements, McKenzie caused ABHS to pay $16.5 million to EHI.
- McKenzie and Martinez split the money. Martinez gave McKenzie large sums of cash, paid $800,000 in credit card bills, and bought luxury items, including a $128,000 Rolls-Royce Ghost and a $928,000 home for McKenzie’s family.
- EHI provided no services to ABHS
His 14-year sentence will run concurrently with a separate 5-year sentence, according to prosecutors.
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