Thursday, March 12, 2009

Former Rosalind Franklin University of Medicine and Science Board Member Pleads Guilty

The Chicago Tribune published a reminder about a scandal from a few years ago that got little other than local attention at the time,

Dr. Robert Weinstein, 63, of Northbrook faces 2 to 3 years in prison in connection with a complex fraud scheme in which he and Levine cheated Northshore Supporting Organization, a charity the two controlled. The charity supported the work of the Rosalind Franklin University of Medicine and Science, which lost a combined $6 million in the scheme. Both men sat on the board of the North Chicago medical school.

Weinstein, a self-described private investor for the last decade, admitted that he understated his income by $3 million on his 2003 tax return when he actually made $9.2 million. Weinstein, who is scheduled to be sentenced on July 1, didn't agree to cooperate in the federal probe.

Weinstein was indicted last June on charges of wire and mail fraud and making false statements. But last week prosecutors charged him with a single tax fraud count after he agreed to plead guilty.

The Tribune first reported in 2004 that the $6 million was missing from the charity.

Not only did the school lose scholarship money but it also unknowingly paid a school construction contractor $1 million in kickbacks, according to court records.

That money allegedly went to Sven Philip-Sorenson, a European businessman who paid it to the medical school as part of the scheme. Philip-Sorenson, who has not been charged, was a director of a Chicago-based health maintenance organization when Levine was a major stockholder of the company.

I would submit that in retrospect, having two convicted felons on a medical school's board of trustees suggests a major governance problem. Yet this case, like others we have discussed involving very bad behavior by leaders of academic health care organizations, caused nary an echo outside its local area. Until we acknowledge that bad, sometimes horribly bad leadership and governance of respected health care organizations is possible, little will be done to prevent more bad leaders from damaging more organizations.

No comments: