A former executive of Amedisys Inc. (NASDAQ: AMED), one of the nation’s largest home health providers, has admitted to charges that he defrauded the company of more than $7.6 million.
David Michael Pitts, 41, pleaded guilty Thursday to one count of wire fraud. Pitts was the vice president of tax for Baton Rouge, Louisiana-based Amedisys from January 2005 to July 2014, and the scheme occurred between October 2006 and May 2014, according to the U.S. Attorney’s Office for the Middle District of Louisiana.
While at Amedisys, Pitts was responsible for all corporate tax matters, including the preparation of state and federal tax returns and the payment of state income taxes across those in which the company operates. As such, he was able to purchase tax credits as a means of reducing and paying state income taxes, U.S. Attorney Walt Green said.
As part of the scheme, Pitts created two counterfeit companies—Stonehenge Entertainment and Evergreen Incentives—to present false and fictitious tax credit agreements to Amedisys for approval and opened and maintained two separate bank accounts. He then purchased these agreements on behalf of Amedisys and diverted funds to the two he had created via 21 wire transfers totaling more than $7.6 million.
The company had filed a lawsuit against Pitts in state court in November in an effort to recoup the stolen money, The Advocate reported. Pitts was taking out hundreds of thousands of dollars at a time and wiring it to his bank accounts, according to the suit.
That case is ongoing, but Glen Peterson, Pitts’ attorney, doesn’t believe there will be much further action to take as a result of the guilty plea in district court.
Pitts now faces up to 20 years in prison and either a $250,000 fine or twice the gross gain derived from the offense. He also must forfeit the $7.6 million he garnered during the scheme. A sentencing hearing has not yet been scheduled.
Written by Kourtney Liepelt