The Investigators: Former Amedisys VP accused of stealing millions

Published: Dec. 3, 2015 at 4:28 PM CST|Updated: Dec. 3, 2015 at 11:00 PM CST
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Amedisys (Source: WAFB)
Amedisys (Source: WAFB)

BATON ROUGE, LA (WAFB) - The former vice president of Amedisys is accused of embezzling more than $7 million out of the company.

The problems could date back as far as 2006 when Michael Pitts was the vice president at Amedisys, a national Fortune 1000 company that provides home healthcare and hospice. Their local branch is located on S. Sherwood Forest.

According to court records, the company accuses Pitts of embezzling $7,639,428 from the agency.

David Gunn is a lawyer who specializes in tax fraud and examined the case for the Investigators. He is not involved in the case in any way.

"They have alleged that the defendant, Mr. Pitts, committed fraud upon Amedisys in the form of selling nonexistent tax credits," said Gunn.

The suit alleges that Pitts created a fictitious corporation called Evergreen Incentives "to steal money from Amedisys."

Since 2011, the company said their own internal review found 11 different transactions where the company bought tax credits from Evergreen Incentives.

"They believe they were purchasing tax credits when in fact, it does not appear they received any tax credits," said Gunn.

Big corporations are legally able to purchase tax credits from other companies to reduce the amount they have to pay taxes on. But in this case, when officials realized millions were going to Evergreen Incentives yet no tax credit in return, they checked with the Louisiana Department of Revenue. The state confirmed, "It did not have any record of Amedisys' tax credit purchases or any transactions with Evergreen Incentives."

After some more digging, they found the problems went further back to 2006 when Pitts allegedly started a different fictitious company, "Stonehenge Entertainment, LLC," a name very similar to another company Amedisys actually did buy tax credits from.

Over a five year period, there were 10 different payments to Stonehenge Entertainment, many near $500,000 per transaction and the highest one at $637,500. In total, Pitts allegedly robbed Amedisys of $7,639,428.

"It appears to me by just reading the lawsuit, the defendant, Mr. Pitts came up with a very elaborate scheme and apparently he was pretty skilled in pulling it off," said Gunn.

In order for Pitts to transfer so much money in just one transaction, Pitts had to have proper authorization for any payments more than $50,000. The suit alleges Pitts, "Falsified wire transfer documentation in an effort to conceal what he was doing," said Gunn.

The case is currently with the U.S. Attorney's office, which will decide whether to push for criminal charges.

Right now, it's just a civil suit. We reached out to Pitts' lawyer, Mary Olive Pierson, who said her client is cooperating fully with both the federal government and Amedisys. Meanwhile, Amedisys was limited in what they could say because it an ongoing case but did issue a statement:

Amedisys discovered the theft internally, investigated it thoroughly and has reported it to law enforcement authorities. No other Amedisys employees were involved in the theft. We have put in place a strict protocol to prevent any recurrence and we expect to recover the full amount through restitution and insurance. As this matter is the subject of civil litigation and a criminal investigation, we cannot comment further.

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