Hospital sues worker over missing money

MEDINA, N.Y. (WIVB) - Close to half of a million dollars is missing from an Orleans County hospital and a former employee is being blamed.

Medina Memorial Hospital is suing its former payroll coordinator, claiming that she misappropriated hundreds of thousands of dollars over a six-year period. It's a case now in the hands of the State Supreme Court in Orleans County.

Linda Rakonczay, a 22-year employee at the hospital, was responsible for processing payroll checks and paying health insurance invoices, according to court papers obtained by News 4. The hospital alleges in a lawsuit that she "misappropriated payroll funds" from the hospital.

Medina Memorial Hospital attorney Daniel Oliverio said, "So far we think the fraud is approximately $460,000 or so."

Oliverio explained employees can designate a portion of their paycheck to a savings account. The lawsuit alleges that Rakonczay misappropriated funds out of the payroll deductions account by "adding herself as a payee from that account." The hospital claims she was not entitled to those funds because she had not signed up for it.

"She, a couple of times a pay period, two times a month, would deposit an extra direct deposit in her own personal account at Key Bank and at a credit union," Oliverio said.

The hospital's lawsuit alleges that she "concealed her actions" by "inflating the hospital's health insurance bills" to ensure that the hospital's overall fund, balanced. The alleged scheme, court papers state, went on from at least 2006 until she went on disability in November 2012.

While on leave, a new controller hired by the hospital made the discovery, Oliverio says.

"He discovered that there was some sort of inconstancy with the numbers when he looked back at prior payrolls," Oliverio said.

The hospital terminated Rakonczay about three weeks ago. Attorney Jon Louis Wilson of Lockport is representing her. He told News 4 by telephone Wednesday that he won't have a comment until possibly a court hearing on the civil matter scheduled for next week.

So far, there have been no criminal charges have been filed in this case. However, Oliverio says there's an ongoing criminal investigation underway, and independent sources tells News 4 the FBI is involved in the case.