For Immediate Release - November 16, 2009

Attorney General Martha Coakley's Office Announces Arraignment of Former Hospital Facilities Administrator Charged with Stealing Millions of Dollars From Employer

WORCESTER - Attorney General Martha Coakley's Office announces the arraignment of a former project manager at a local hospital in connection with allegedly stealing millions of dollars from the institution in fraudulent construction contracts. John Lawler, age 52, formerly of Stowe, was arraigned in Worcester Superior Court on Friday on the charges of Larceny Over $250 (11 counts), Uttering (5 counts), Larceny by a Continuous Scheme Over $250, Commercial Bribery (2 counts), Unemployment Fraud, Filing False Tax Return. Lawler was arrested by Massachusetts State Police assigned to the Attorney General's Office on November 2, 2009 in Buda, Texas, and subsequently returned to the Commonwealth for arraignment last week.

In June 2007, the Attorney General's Office began an investigation into Lawler's alleged activities after first learning about the matter from an investigator at a bank where Lawler kept a bank account, and later also from information received from the hospital, which cooperated fully with the investigation. Investigators discovered that while working as the project manager for the hospital, Lawler oversaw the contracts and accounts for construction projects done at the hospital. Authorities allege that Lawler set up fake bank accounts in the name of one of the construction companies, and allegedly stole the hospital's payment checks to the construction company and deposited these funds in the fraudulent bank account for his personal use. The majority of the funds Lawler allegedly stole have been recovered

During the course of the investigation, authorities also discovered that Lawler allegedly hired numerous smaller-sized contractors and provided these contractors with large amounts of construction work. Authorities allege that many of these contractors were the defendant's personal friends, and many of the invoices submitted to the hospital by these contractors were also fraudulent. Lawler allegedly helped these contractors submit fraudulent invoices from which the contractors received hundreds of thousands of dollars of payments. Investigators discovered that Lawler would receive either personal services or cash in return from these contractors.

Authorities also allege that that Lawler committed similar fraudulent act at previous employers for a number of years. Lawler allegedly created other false bank accounts in the names of legitimate contractors doing work for these entities, and submitted fraudulent billing statements and received the stolen funds from these fraudulent invoices on numerous occasions.

Additionally, investigators discovered that upon being terminated from the hospital for the alleged misconduct, Lawler filed for unemployment benefits and provided false information in his attempt to receive unemployment funds to which he was not entitled.

Investigators also discovered that Lawler filed a false income tax return for unreported income for the year 2003.

A Worcester County Grand Jury returned indictments against Lawler on May21, 2009. Lawler was later arrested by authorities on November 2, 2009, and was returned to the Commonwealth last Thursday. On November 13, 2009, Lawler was arraigned in Worcester Superior Court Judge James R. Lemire where he entered a plea of not guilty and was ordered held on $350,000 cash bail. Lawler is scheduled to next appear in court on November 30, 2009 for a pre-trial conference.

The case is being prosecuted by Assistant Attorney General Rick Grundy, Chief of Attorney General Coakley's Criminal Bureau, with assistance from Assistant Attorney general nancy Maroney. It was investigated by Paul Stewart, Chief of Attorney General Coakley's Financial Investigations Division and financial investigator Sallyann Nelligan. Massachusetts State Police assigned to the Attorney General's Office also assisted with the investigation.