Wednesday, Dec. 10, 1997 | 9:57 a.m.
The FBI has recovered about $477,000 of the funds, said Creig Skau, assistant solicitor general with the state attorney general's office.
Mary Ferris, indicted by a federal grand jury on 23 counts involving the theft of the funds, has faced charges of preparing false documents and grand theft property.
She also is under investigation by federal officials for almost $500,000 missing from a health insurance company in Southern California, according to court documents.
Ferris, 36, worked as the claims manager for L&H Administrators, which had the contract through May to manage the insurance claims for the Nevada and Clark County self-funded health plans. The company closed its Nevada offices in June, leaving the state with thousands of unprocessed medical claims.
U.S. Magistrate Judge Roger Hunt issued an order to seize proceeds in bank accounts that authorities allege were set up by Ferris.
Four accounts were under her name and several others used medical-related business names such as Surgical Associates, Outpatient Surgery Center or Nevada Head & Neck Surgeons. The accounts were all set up at Nevada State Bank on Sept. 25.
FBI Special Agent Michael Solari said in an affidavit asking for the seizure that, upon contacting bank officials, he was told that most of the phony accounts had a nominal balance, but several others had a combined balance of more than $400,000.
The Las Vegas federal grand jury health care fraud counts charge that Ferris used her position to receive payments on 155 fraudulent claims for services supposedly given to state and county employees totaling $622,878.
They charge she secretly placed the false claims into the computer system without the knowledge of the 134 state and county employees whose names were used in the scheme.
The indictment charges that Ferris also opened mailbox drops to receive fraudulent checks to fictitious medical providers in the L&H computer system. To conceal the fraud, Ferris changed the beneficiaries' mailing addresses to drop boxes she opened, the indictment alleges.
L&H was tipped to the scheme, Solari's affidavit said, when a mail drop business contacted L&H "about a large volume of unclaimed mail" listing the administrator as the return address.
When L&H employees went to recover the mail, they discovered Ferris had opened the drop box, the affidavit said. Solari stated that the mail was mostly made up of "explanation of benefits" statements.
On Sept. 22, Solari visited five mail drops suspected of being used in the scheme. One was closed, three had been opened by Ferris and one opened by Jane Treher who, Solari noted, had the same birth date as Ferris.
Documents recently unsealed in U.S. District Court in Las Vegas give more details of Ferris, also known as Jane Treher, and her background.
The documents show Ferris has a lengthy history of arrests and has at least two convictions. One of those was a misdemeanor conviction out of Santa Ana, Calif., in 1986 on a charge of preparing false documents for insurance claims. She received probation.
Between 1988 and 1992, three warrants were issued in Southern California for her arrest on grand theft charges. But according to court documents there was never any disposition of those cases.
In 1992, she was charged with felony grand theft property in Santa Ana and again received probation.
Although L&H hired someone with a criminal background for the sensitive position of claims manager, it was the lack of internal controls that provided the opportunity to take the money, said Perry Comeaux, director of the state Department of Administration and a member of the state Committee on Benefits, which oversees the state health plan.
If Ferris pleads guilty or is found guilty of the charges at trial, the state will present a case at a subsequent forfeiture hearing to recover the money, Skau said.
Ferris is charged with taking $608,000 from the state and $15,000 from the Clark County fund.
Skau said there would have to be a determination on how the remaining money should be divided between the state and county.
Ferris was indicted Nov. 12 and arrested in Las Vegas a week later. L&H fired her at the end of January. Tentatively scheduled to go to trial in U.S. District Court on Jan. 20, she remains in jail without bail.