AJC Watchdog: First Alert

Keeping watch on those who hold the public trust and money

Ex-Grady official convicted of embezzlement

Grady hospital's former payroll director is guilty of embezzling more than $480,000 of taxpayer funds, a federal jury has decided. Donald Thomas was convicted Friday of 14 counts including wire fraud, bank fraud and theft from an organization receiving federal funds.

How did he pull it off? That's important to know, because it can point to a lack of vital checks and balances to prevent fraud.

Thomas got away with the scheme for years because he had full access to Grady's electronic payroll systems, could authorize paper checks, and had the power to sign off on all paychecks, including the ones he altered, his federal indictment shows.

His scheme involved bumping up the final payments to terminated employees for unused vacation days, severance pay and other compensation. Starting in 2008, he would log into Grady's electronic payroll system and add the extra money to the records of some employees. Then, he would quickly change the employees' bank account information to direct the money to bank accounts he controlled. Next, he would reverse the changes to cover his tracks. Sometimes, he even altered payroll records to show that the falsified pay was tax exempt, to prevent federal and state taxes from being withheld. He could then OK all the payroll.

To make sure no one noticed, Thomas also altered records to ensure that employees didn't get electronic payroll statements showing the additional money. But that's where Thomas dropped the ball: He didn't fix all the employees records. And in 2012, a former Grady employee reported that her tax form showed more money that she actually received.

Thomas, who is 55, is scheduled to be sentenced Feb. 25. Here's the U.S. Attorney's press release on the conviction.


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About the Author

Lois Norder is Senior Editor for Investigations in the newsroom at The Atlanta Journal-Constitution.