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Hospital chairman says ‘no winners’ with today’s sentencing

By Tom Rivers, Editor Posted 5 May 2014 at 12:00 am

MEDINA – The leaders of Orleans Community Health say the sentencing of a former payroll clerk, who stole about $500,000 from the organization, will help the healthcare system move on from the issue.

“There are no winners here,” said Bruce Krenning, chairman of the board for OCH, the parent organization of Medina Memorial Hospital. “It’s an unfortunate situation, but it starts to bring closure although there won’t be full closure until she pays back all of the money.”

Linda Rakonczay, 58, of Middleport was sentenced to two years in prison this morning. She was ordered to pay back $499,563 in restitution to the hospital and $93,999 in restitution to the Internal Revenue Service.

“Patient care was never jeopardized because of this,” Krenning said. “But certainly it hurt our bottom line. Every hospital could use every bit of money it can get.”

Some of Rakonczay’s assets have been seized to help pay the restitution and Krenning said insurance will cover a small portion of the stolen money. Krenning said, realistically, that some of the money may not be recouped.

Rakonczay worked as a payroll coordinator for Orleans Community Health. Beginning in 2001 and continuing through 2012, Rakonczay prepared and submitted reports to the organization’s bank instructing the bank to electronically transfer money from the corporate bank account to her personal bank account, the U.S. Attorney’s Office said.

Hospital officials say she misappropriated money through the hospital’s payroll savings deduction program for employees. Rakonczay oversaw an account where employees put a portion of their paycheck to a savings account. Rakonczay directed about $3,000 extra to herself every two weeks for more than six years. She inflated the hospital’s health insurance bills to make sure the hospital’s overall bills balanced.

The scheme was discovered after Rakonczay went on disability leave in November 2012. She was terminated two months later.

If Rakonczay hadn’t gone on disability, the crime may have continued undetected. Orleans Community Health now has internal controls in place to make sure “it will never happen again,” Krenning said.