Kathryn Abbate, former head of the Miami Beach Community Health Center, was charged in state and federal courts on Wednesday with stealing several million dollars from the clinic, which is funded with state and federal money.
Abbate, 64, a Hollywood resident, pleaded not guilty in federal court after she surrendered to FBI agents earlier in the day. She was released on a $150,000 bond that a prosecutor and her defense attorney jointly recommended to the magistrate judge.
She was fired last summer after outside auditors uncovered the alleged fraud. The center’s board accused her of diverting $6.8 million in funds for personal use over a four-year period — money intended to provide care for the poor who used the center.
The center receives about $4 million annually in federal funding. In 2011, the clinics received about $15 million from various county funds, including the Children’s Trust, AIDS support and Jackson Health System.
Abbate, who in 2010 earned $1.2 million in salary and other compensation, faces up to 10 years in prison on the federal charges and up to 30 years on the state charges.
According to the federal information charging Abbate with theft, she caused the center to “disburse millions of dollars in over 800 checks made payable to her for ‘community development.’ Abbate provided no backup documentation, such as invoice or receipt, for any of these checks.”
The court document says the theft occurred from 2008 to 2012.
She is also accused of a coverup, by showing the center’s auditors documents in 2012 that “falsely and fraudulently indicated that $1 million of these funds were paid to five doctors.” In fact, the document says, “the funds weren’t paid to the doctors.”
In state court, she is charged by information with one count of an organized scheme to defraud and one count of grand theft in the first degree.
Miami-Dade Inspector General Christopher Mazzella said Wednesday that the state charges focus on Abbate’s alleged coverup of the $1 million involving the five doctors, which were supposed to be payments to the University of Miami Miller School of Medicine. UM never received the money, Mazzella said.
Mazzella said he planned to brief the Miami-Dade County Commission as soon as possible because the center had “a total breakdown of fiscal accountability” and “very very lax oversight.”
He said he’ll be “putting the county on notice that there needs to be close oversight of this organization, which spends millions and millions in county funds.”
“The big picture here is how the hell did this happen?” Mazzella added. “How could somebody steal this money with minimal excuses? It’s almost ridiculous. It’s mind-boggling.”
The center released a statement praising the “strong action” of the U.S. Attorney’s Office because it “closes a sad chapter in the history” of the center. “From the time Ms. Abbate’s outrageous breach of a sacred trust came to light, the center has cooperated fully with the U.S. Attorney’s Office.”
Abbate was charged by information instead of indictment, a sign she is expected to cooperate with authorities in the ongoing investigation and eventually plead guilty.