Financial Fraud: Renee Tartaglione Guilty On All Counts of Conspiracy, Fraud, And Theft From Juniata Community Mental Health Clinic (JCMHC)
Head Of Nonprofit Mental Health Clinic Found Guilty of Fraud Against Clinic
Philadelphia – Today, a federal jury found Renee Tartaglione, 61, of Philadelphia, PA, guilty on all counts of conspiracy, fraud, and theft from a nonprofit clinic that provided mental health services to persons eligible under Medicaid. Tartaglione defrauded the Juniata Community Mental Health Clinic (JCMHC) by misappropriating funds of the clinic. Tartaglione was also convicted of falsifying her federal income tax returns by underreporting her income for tax years 2008, 2009, 2010, and 2012.
According to the evidence presented at trial, between 2007 and 2015, Tartaglione, as President of JCMHC’s Board of Directors, defrauded and stole money from JCMHC through a series of actions designed to benefit her personally at the expense of the clinic. Tartaglione purchased the building on 3rd Street in Philadelphia that housed the clinic and then raised the rent repeatedly; causing the clinic’s rent for the 3rd Street building to increase from $4,500 per month to $25,000 per month.
Additionally, as of 2010, Tartaglione’s company, Norris Hancock LLC, acquired an interest in a building on 5th Street, and Tartaglione began to cause the clinic to spend money to fix up that building. Then, in December 2012, Tartaglione leased that building to JCMHC under a lease that called for rent of $35,000 per month for the first two years, and $75,000 per month for the next three years. The rent Tartaglione charged the nonprofit clinic at both buildings was substantially in excess of the market rent.
None of the JCMHC rent increases or the lease agreements were approved by JCMHC’s Board of Directors. Tartaglione and her co-conspirators created false and fictitious documents in an attempt to make the transactions appear legitimate.
Tartaglione’s crimes against the Juniata Mental Health Clinic are unfortunate examples of how those in control of non-profits can abuse them for their personal enrichment,” said Acting United States Attorney Louis D. Lappen. “Her fraudulent scheme did serious damage to the community she was supposed to serve — denying mental health services to economically disadvantaged people.”
“Nonprofit work is generally understood to be personally fulfilling – not financially enriching,” said Harpster. “The defendant disagreed. She brazenly diverted, for her own use, money meant to improve mental health care for the underprivileged and underserved. While doing so, she shortchanged her community, and stole from U.S. taxpayers. The FBI will continue to investigate and hold accountable those misappropriating federal government funds.”
“IRS Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners. Today’s verdict demonstrates our collective efforts to enforce the law and ensure public trust,” said IRS-CI Acting Special Agent In Charge Gregory Floyd. “Renee Tartaglione made a conscious decision to deceive and benefit personally at the expense of others, and she is now a convicted felon as a result. Today’s guilty verdict should send a clear message to those contemplating a similar crime.”
“Non-profit entities are supposed to protect our truly disadvantaged. When members of our City are in their most trying times, they turn to organizations like Juniata Community Mental Health, and other contractors of the City’s Community Behavioral Health, for honest and compassionate assistance,” said Amy Kurland, Philadelphia Inspector General. “Theft within our City’s non-profit sector is profoundly harmful because it victimizes those who have already been victimized. That is why my office will forever be committed to protecting the integrity of charitable services within Philadelphia – and we are very grateful to have partners like the USAO and FBI who are equally committed to that mission.”
This case was investigated by the FBI, IRS Criminal Investigation, and the Philadelphia Office of the Inspector General. Assistant United States Attorney Bea Witzleben and Trial Attorney Peter N. Halpern of the Criminal Division’s Public Integrity Section are prosecuting the case.