The Journal Register (Medina, NY)

Local News

January 15, 2014

Rakonczay pleads guilty to federal charges

Medina Journal-Register —

BUFFALO — Linda Rakonczay appeared in U.S. District Court Wednesday to enter into a plea deal regarding two federal fraud charges.

The former payroll coordinator at Medina Memorial Hospital pleaded guilty to the charges of both wire fraud and tax fraud, both felonies.

In the early part of 2013, Rakonczay had a suit filed against her claiming that more than $400,000 in payroll funds had been misappropriated during her time as an employee at what is now Orleans Community Health (OCH). At that time last year, Rakonczay denied the allegations.

It can now be confirmed that a federal investigation took place in the months that followed, and that investigation included the U.S. Attorney's Office in Buffalo and the Federal Bureau of Investigation.

The guilty plea included language calling for Rakonczay to reimburse OCH and to pay the back taxes on the embezzled funds. Combined the amount is nearly $600,000.

Chief U.S. District Judge William M. Skretny presided over the case, which was heard at the Robert H. Jackson U.S. Courthouse. 

The plea agreement included a segment in which Rakonczay waived her right to an indictment by a jury by accepting the deal.

The facts of the case, as outlined in the deal, stated that Rakonczay worked for OCH from 1990 to 2012 and that between 2001 and 2012 she "knowingly and willfully prepared and submitted ACH batch reports to OCH's bank, instructing the bank to electronically transfer money from their corporate bank account to her personal bank accounts. These electronic transfers into the defendant's account were not authorized by OCH and were done without OCH's knowledge or consent."

Over that period of time, $499,563 was moved from one account to the other. According to the facts stated in the agreement, in order to cover up the money leaving OCH, Rakonczay "increased the amount expensed to OCH's healthcare insurance account by the amount that she stole." Furthermore, she did not pay herself during the months of the hospital's annual audit.

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