Dejan Karlovic, formerly a senior grants accountant at Jericho Road Community Health Center in Buffalo, New York, admitted to embezzling more than a half million dollars from the employer through fraudulent transactions conducted between March and June of 2024.
Karlovic created fake invoices and manipulated three commercial credit cards under his control to redirect organizational funds into an account he set up, ultimately transferring the stolen money into his personal bank account.
Law enforcement was notified after Jericho Road staff discovered suspicious transactions and conducted an internal investigation.
At sentencing, the court acknowledged Karlovic's serious physical, mental, and emotional health challenges including PTSD, major depression, anxiety, ADHD, and grief, but deemed the scope of the theft and the targets -vulnerable patients - sufficient justification for a custodial sentence.
Karlovic ultimately received three months in prison and two years of post-release supervision, a significant reduction from the statutory and guideline maximums due to mitigating factors including ongoing mental health treatment and family circumstances.
The stolen funds were used in part to pay off family debts, send money abroad, and finance luxury items such as a BMW and a pickup truck, which prosecutors argued contradicted claims of acting solely to relieve family hardship.
Over half of the funds have been recovered, though restitution remains outstanding and will be finalized in a separate hearing.
Source: https://www.cpapracticeadvisor.com/2025/09/12/accountant-embezzler-in-new-york-sentenced-to-3-months-in-prison/168868/
Commentary
In the above matter, the accused used fake invoice and credit card schemes to commit the embezzlement.
All healthcare organizations can reduce the risk of embezzlement schemes like fake invoice fabrication and misuse of credit card access by focusing on segregation of financial duties so no single individual oversees all aspects of transactions.
Make sure to regularly audit financial activities using independent parties to spot irregularities, and automate accounting workflows to minimize manual errors and strengthen oversight controls.
Have clear written policies on how invoices and expenses are processed, and maintain documentation of all transactions. Have regular reviews of those authorized to approve payments.
Train staff on fraud awareness so they can recognize behavioral warning signs. Make sure there are multiple reporting mechanisms so that wrongdoing can be reported and managed internally.
