For Immediate Release - September 09, 2010

Former Hospital Facilities Administrator Pleads Guilty, Sentenced to Two Years in Jail for Stealing Over $2.6 Million Dollars From Employer

WORCESTER - A former project manager at a local hospital has been sentenced to serve time in jail after pleading guilty to stealing millions of dollars from the institution in fraudulent construction contracts, Attorney General Martha Coakley's Office announced today.

John Lawler, age 52, formerly of Stowe, pled guilty yesterday in Worcester Superior Court to 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. After the plea was entered, Superior Court Judge John S. McCann sentenced Lawler to serve two years in the House of Correction, followed by five years of probation. Judge McCann also ordered Lawler to pay $300,000 in restitution. The Commonwealth recommended that Lawler be sentenced to serve four and a half to five years in State Prison. Authorities previously seized Lawler's bank accounts and were able to recover over $2 million dollars.

"At a time when many businesses are struggling to control their bottom line, employees in positions of trust cannot use their influence to exploit employers for their own personal gain," AG Coakley said. "Our office takes financial crimes against businesses very seriously and we will aggressively prosecute these cases and hold those accountable who try to deceive their employers."

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 Massachusetts to face prosecution.

In June 2007, the Attorney General's Office began an investigation into Lawler's 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. Lawler set up fake bank accounts in the name of one of the construction companies, and in order to divert payment checks from the hospital and deposited these funds in the fraudulent bank account for his personal use. The majority of the funds Lawler stole have been recovered.

During the course of the investigation, authorities also discovered that Lawler hired numerous smaller-sized contractors and provided these contractors with large amounts of construction work. 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 helped these contractors submit fraudulent invoices from which the contractors received tens of thousands of dollars in payments. Lawler would receive either personal services or cash in return from these contractors.

Additionally, investigators discovered that upon being terminated from the hospital for the 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 May 21, 2009. Lawler was later arrested in Texas by authorities on November 2, 2009, and was returned to the Commonwealth to face charges. On November 13, 2009, Lawler was arraigned in Worcester Superior Court where he entered a plea of not guilty and was ordered held on $350,000 cash bail. Yesterday, Lawler pled guilty to all charges and was sentenced.

The case was prosecuted by Assistant Attorney General Matthew Shea. 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.