BATON ROUGE, LA (WAFB) - Late Thursday, Our Lady of the Lake Regional Medical Center released details of the case against former hospital executive, John Paul Funes.
The hospital says it had identified nearly $810,000 lost in alleged fraudulent activity committed by Funes. The hospital says it will seek restitution.
OLOL released the following statement:
“Working with a leading independent third-party financial audit firm, we have recently completed a comprehensive evaluation of fraudulent activities committed by Mr. John Paul Funes and the safeguards we have in place to protect our ministry and the funds we raise through our Foundation.
We’ve identified approximately $810,000 lost due to fraudulent activity committed by Mr. Funes, former president of the Foundation. We will complete replacement of those funds within the next 30 days and will seek restitution from Mr. Funes.
The work by the independent third-party firm has confirmed that Mr. Funes acted alone and was the only member of the organization involved. Over several years, he orchestrated a series of fraudulent transactions that involved the purchase and distribution of gift cards, charter flights and payments to individuals, including forged documents, invoices and signatures. He misled hundreds of people in and outside of our organization.
The forensic investigation also revealed two questionable issues that warranted we notify legal counsel for LSU. Since we are not involved and the outcome does not impact our operations, we will not have any further details or comments on this issue.
Although no system is foolproof, we will do everything we can to ensure this doesn’t happen again. Our donors’ contributions are safe and being used with integrity and responsible purpose. The work we’ve done with the third-party audit has given us a clear roadmap to address the vulnerabilities Mr. Funes exposed. We’ve already begun immediate changes including additional approvals for expenditures and more oversight on adherence to our policies and processes.
We continue to cooperate with law enforcement. We remain shocked and appalled by Mr. Funes’ fraudulent activities and are truly sorry for the harm that he has caused our community.”
LSU released a statement Thursday evening in response to the audit. The statement reads:
"LSU can confirm notification in late 2018 by Our Lady of The Lake officials of two findings from their forensic investigation of John Paul Funes. Both findings were reported to the NCAA in 2018. One of the findings is not believed to be a matter of compliance or an NCAA issue. The second finding involves the hiring of a parent of a former LSU student-athlete from 2012-2015. The university is actively working with the NCAA to resolve this issue.
LSU has and will continue to monitor this matter for compliance issues working closely with the NCAA. As this is also an ongoing legal matter involving other parties, investigators have requested LSU have no further comment."
Before making the results public, OLOL leaders spent the day sharing the results with two boards, one which oversees the hospital and another that oversees the OLOL Foundation. Funes was the president of the foundation before being fired in November of 2018 when he was accused of embezzlement and forgery. Authorities have said nearly $1 million may have been improperly used.
The foundation is the fundraising arm of the hospital that mainly raises funds for the OLOL Children’s Hospital, which is currently under construction in Baton Rouge.
Hospital leaders say none of the alleged embezzlement had any relation to the hospital’s annual Red Car drawings in which WAFB is a sponsor.
Few details have been released about where Funes allegedly funneled the money. His attorney, Walt Green, said Thursday afternoon he had not yet seen the audit findings.
The findings of the independent audit released by OLOL Thursday might be a helpful tool for law enforcement, but the East Baton Rouge Parish Sheriff’s Office is conducting its own audit that will be used for potential prosecution of the case. Currently, both the EBR Parish District Attorney’s Office and the U.S. Attorney’s Office are investigating. It has not yet been determined if those two agencies will later combine efforts.
Funes was making $283,000 annually in his job with the OLOL Foundation.