The U.S. Attorney in Madison on Wednesday charged a former Mercyhealth official and the operator of a former marketing firm in a kickback scheme that officials said defrauded the Janesville-based health system of more than $3 million.
The Western District U.S. Attorney’s office, in a six-page charging document, lays out details of how former Mercyhealth vice president Barbara Bortner, 57, Milton, and marketing firm operator Ryan Weckerly, 46, Sycamore, Illinois, are suspected of creating business bank accounts to sock away checks and cash they’d siphoned off in a five-year-long scheme involving inflated billings by Weckerly.
Bortner, a 30-year employee of Mercyhealth, was charged in federal court Wednesday with wire fraud and tax evasion. Weckerly was charged with aiding and abetting in the preparation of a false income tax return.
Bortner and Weckerly both waived their rights to indictment by a grand jury and agreed to plead guilty, according to the release.
“The wire fraud and tax charges stem from Bortner and Weckerly’s involvement in a kickback scheme while she was the vice president of marketing at Mercyhealth,” the U.S. Attorney said in the release.
Janesville-based Mercyhealth is a multi-billion dollar nonprofit hospital and health care group that operates more than a half-dozen hospitals and more than 60 clinics across southern Wisconsin and northern Illinois, including Mercyhealth Hospital and Trauma Center, Janesville.
Weckerly was owner of Morningstar Media Group, a marketing agency based in Sycamore, and his company did business as health and wellness publication InVironments Magazine, the charging documents said.
“Beginning in February of 2015, Bortner and Weckerly devised a plan whereby he would submit inflated invoices to Bortner for his marketing work for Mercyhealth,” the release states.
“Bortner and Weckerly agreed that he would provide monetary kickbacks to Bortner for the funds he received from the inflated invoices,” the release continues. “In return, Bortner agreed she would continue to use Morningstar Media Group as the primary marketing agency for Mercyhealth. The kickback scheme continued until June of 2020 and involved over $3 million.”
Bortner failed to report her income from the kickbacks on her federal tax return in 2018, according to the release.
Weckerly was charged with aiding and abetting because he gave Bortner a false Form 1099 for 2019 that underreported her compensation from Weckerly by excluding the amount of money received in the kickback scheme, according to the charging documents.
Weckerly wrote 103 checks that totaled more than $2 million to Bortner and also gave her cash. Bortner deposited much of the money in an account she created at the Bank of Milton, one of the charging documents states.
The Bank of Milton account was in the name of “WeInspire LLC,” the document states.
According to the charging document, Bortner created WeInspire to make it “appear that she was performing legitimate work for InVironments Magazine.”
“In reality, Bortner’s creation of WeInspire was an attempt to disguise the source of the kickback payments from Weckerly,” the charging document continued.
Mercyhealth CEO Javon Bea previously told The Gazette that Bortner had clearance from Mercyhealth to authorized up to about $10,000 of marketing invoices at one time. Bea indicated that might have allowed the scheme to roll out incrementally over a five-year span.
He said earlier that Mercyhealth believes Bortner was the only Mercy employee involved.
The charges against Bortner and Weckerly were the result of an Internal Revenue Service investigation.
Bea indicated he learned of the fraud in early August and fired Bortner at that time. Mercyhealth also dissolved a partnership with a “vendor” believed to be involved in the scheme.
Bea told The Gazette that Mercyhealth officials were disappointed and shaken by the fraud, both because of Bortner’s longevity with the health care group, but also because she’d been a “big presence” at Mercy and a trusted member in its administrative inner circle.
Mercyhealth’s most recently available tax records show Bortner was being paid a $350,000 annual salary as the head of Mercy’s marketing division.
Bea said Bortner started out at Mercyhealth as an associate in the marketing department and moved up through the ranks.
According to the timeline laid out by the U.S. Attorney, the fraud Bortner and Weckerly are accused of continued to roll out through the summer of 2020.
That means the scheme would have overlapped a period in 2020 when Mercy laid off dozens of staff and chopped executive pay.
At that time, the health care group indicated it was weathering significant revenue losses from delinquent Medicaid repayments in Illinois. Mercyhealth had to scuttle patient surgeries for weeks during the COVID-19 pandemic lockdown.
Bortner has not responded to multiple requests for comment by The Gazette.
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