$100,000 SMCAS EMBEZZLEMENT TRIAL BEGINS

By DEBRA HAIGHT

NILES – The embezzlement trial of former Southwestern Michigan Community Ambulance Service Executive Director Timothy Gray began last week in Berrien County Trial Court and was expected to continue most of this week. SMCAS is an ambulance service owned by five southeast Berrien County municipalities and one Cass County municipality.
Gray, now of Clearmont, Florida, faces a felony charge of embezzlement over $50,000 and less than $100,000 which is a 15 year felony. He is accused of taking money from the service between 2009 and mid-2014 when he retired through excessive payments for paid time off, holiday pay, dental and vision reimbursement and short term disability.
Six people testified for the prosecution last week, including current SMCAS Executive Director Brian Scribner, two SMCAS board members and a representative of the insurance company SMCAS had a short term disability policy with. Forensic auditor David Marshall testified Monday.
Current SMCAS Executive Director Brian Scribner testified that he became concerned about the ambulance service’s finances in the fall of 2014. He discovered a “pretty significant number of checks” written to Gray when he started looking at the check registry of how much different vendors were being paid.
His initial investigation uncovered $24,000 worth of checks made out to Gray, primarily for buying back his unused vacation time as well as a smaller amount for what Scribner saw was an excessive amount paid to Gray for dental bill reimbursements.
“I compared his records to the sellback activity from August 2009 to late June 2014,” Scribner said. “I tried to line up what he had on paper to our records and there was not a lot of connection.”
His testimony also touched on other elements of the prosecution case including the excessive amounts Gray received for holiday pay compensation, vision reimbursement and dental reimbursement as well as the salary Gray continued to get while he was on short term disability from November 2013 to February 2014.
“He was receiving a salary and short term disability at the same time,” Scribner said. “It appeared to me that there had been some unethical activity.”
SMCAS board members William Weimer and William Marx testified about Gray’s actions during the years before he retired in 2014. Both said they knew Gray for many years and trusted him.
Weimer said he had no reason at the time to not trust Gray and noted that it was not the board of trustees’ role to “micromanage” the staff. He noted that Gray and other office staff would give him checks to sign and he would do so, often without asking many questions.
Assistant Prosecutor Gerald Vigansky showed Weimer a series of checks that he had signed over a five year period that gave Gray thousands of dollars in compensation for vacation and personal days Gray had not used.
“There were five checks in five months totalling over $16,000 that went to Mr. Gray, are you surprised by that?” Vigansky asked. “Yes,” Weimer replied. “It is a rather high number.”
Marx testified that board members would provide oversight but did not micromanage day to day operations. He said board members would do a cursory review of financial reports to make sure there were no glaring irregularities or any line item over budget.
When asked about checks to signed that reimbursed Gray for vacation and sick days he was selling back to the service, Marx said he didn’t check logs to see if the numbers were correct. “My thought was that the checks had been vetted and they were proper for me to sign,” he said.
On the issue of whether people could get their salary and short term disability payments at the same time, Marx said it was his understanding that people did not get their regular salary if they were on short term disability.
“Would it surprise you that he received his full salary when he was out on disability?” Vigansky asked.
Marx said he would be surprised. “That would be surprising that he would be getting an added benefit plus his salary,” he said. “You shouldn’t receive a windfall for getting ill.”
Monday’s testimony came from forensic auditor David Marshall. Marshall testified that he was hired in early 2015 by SMCAS to do a forensic audit of the service’s financial books. He said his analysis concluded that Gray received over $100,000 in unwarranted or excessive payments from 2009 to mid 2014.
For the 2009 year from April, 2009 to April, 2010, Marshall said the number of hours, 1,520 hours, Gray accumulated in unused vacation, personal and sick days caused him concern. “It was almost the equivalent of a full time year and significantly higher than what was allowed,” he said.
Marshall gave a similar analysis to other contract years for Gray, noting that he was paid back for more unused vacation, personal and sick days than was allowed in his contract. In addition to payroll and check registers, Marshall relied on information from emails where Gray said he was sick or on vacation.
Marshall also pointed out incidences when Gray received holiday bonuses he didn’t deserve as well as excessive dental, vision and short term disability payments. In the last instance, he said Gray received over $25,000 in earnings he was not supposed to get when he was out on disability from November, 2013 through March, 2014.
Marshall’s calculations showed that Gray received $90,828.57 in excessive or unwarranted compensation from 2009 to mid-2014. In addition, SMCAS paid $5,470 in extra social security and $7,656 in extra pension contributions on the $90,828.57.