R.I. group homes' finance chief stole $220,602

PROVIDENCE — The head of financial management for Rhode Island's state-run group homes stole $220,602 in federal dollars earmarked for developmentally disabled adults over a seven-year span that stretched from 2011 until his suicide, while he was being investigated, in November.

In a summary report provided to The Journal on Friday, Dorothy Pascale, chief of the state's Office of Internal Audit, spelled out the financial maneuverings of the late Kevin B. Ward while he was the administrator responsible for the finances of the state-run network known as RICLAS, which stands for Rhode Island Community Living and Supports.

Ward wrote checks from a state account — which was supposed to be used to pay for personal and living expenses for group-home residents — to a dormant state account he reactivated, unnoticed. He then wrote checks to himself from the reactivated account.

"He was moving money over, and he would wait to see if anybody noticed, and then he took it to himself," said Pascale. "He went, 'Well, let's see what happens.' Tick-tock. Tick-tock....'"

"When they teach about fraud, this is the type of case they teach," she said.

Rebecca Boss, director of the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, said she was shocked as the details of Ward's years-long theft from one of her agency's accounts came to light — "very shocked, as would and will be most of the people who worked with him."

"He was by no means anybody that you would suspect of this kind of activity," Boss said. "He was not flashy, ostentatious. He didn't drive a fancy car. There were no exotic trips anywhere. And very friendly and kind. This is how his co-workers would describe him. He was just your average, very nice kind of guy."

Pascale said the state has recouped about $70,602 from an insurance policy. It remains unclear how much more, if anything, the state can recover of the stolen money intended for people with disabilities. She said the state's lawyers are exploring the options.

Ward died at age 60.

Rhode Island State Police spokeswoman Laura Meade Kirk told The Journal: "We can’t release the initial police report due to privacy concerns. However, I can confirm that his body was found on Monday, Nov. 26, 2018, at approximately 6:45 p.m. in a wooded area off Plainfield Pike, near Route 102, in Scituate." 

(In mid-December, she had told The Journal; “I can confirm that we did investigate the death of a BHDDH employee and that [it] was ruled a suicide.)

According to Pascale's summary report, the investigation began Nov. 2, 2018, when state Controller Peter Keenan reported a "suspicious check transaction" to the Office of Internal Audit, which Pascale heads. The suspicious check came to light at time when the treasurer's office and the controller were attempting to improve "internal control over the custody and business need for state-owned checking accounts."

According to Pascale's account: "The suspicious check #1311 in the amount of $4,500, dated June 20, 2017, was payable to the financial manager of the RICLAS program (Kevin Ward) from the state checking account at Bank of America.

"Check #1311 was payable to Kevin Ward, signed by Kevin Ward, and endorsed as 'deposit only' to a Citizens Bank account," which the state police determined, by issuing a search warrant to the bank, belonged to Kevin Ward.

"Due to Bank of America record retention polices, we were able to receive [only] seven years of documents," the report said.

That period extended from Aug. 1, 2011, when the bogus state account had a $38,476 balance, until Nov. 30, 2018, the report said. Over that period, 21 checks were deposited into Ward’s Citizens account from the dormant state account — associated with the long-closed Ladd School — that Ward had reactivated.

During the period of the theft, Pascale's report said: "Mr. Ward maintained sole responsibility, authority, and custody over this bank account and bank statements for the RICLAS program during his employment as a financial manager for this program."

BHDDH's Boss said that could no longer happen. Among the changes, two signatories are now required on a check. She also stressed that no one in the RICLAS program was directly affected, in any way, by the misappropriation of this money over an extended period of time.

Pascale also put in a plug for the state's fraud hotline: www.audits.ri.gov.

The state police closed their investigation this week, Kirk said. "The Office of Internal Audit for the Department of Administration asked us to investigate the apparent misappropriations of funds from an account following the death of a BHDDH employee last November," she said. "We investigated and the case was closed this past week, with no criminal charges filed. So we are unable to comment further on our investigation."

The RICLAS system encompasses group homes, leased apartments and 24-hour nursing care, along with dietary, housekeeping and other program services in two special-care facilities. The checking account from which Ward misappropriated money contains about $140,000 in any given month to help pay providers for rent, utilities, laundry services and the like.

In addition, each resident receives $50 to spend as they choose, and they receive $90 per quarter to be spent only on clothing, according to BHDDH spokesman Randal Edgar.