Tuesday, December 6, 2022

Federal fraud charges against past leaders of Nebraska’s former child welfare contractor

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Two former executives from St. Francis Ministries, which last year lost its contract to oversee child welfare services in Nebraska, have been federally indicted on fraud charges.

The charges are not directly related to the Kansas organization’s contract with Nebraska, but the indictment alleges that two top executives defrauded the organization out of millions of dollars between 2018 and 2021. St. Francis held a contract with Nebraska from July 2019 to December 2021.

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The Rev. Robert Smith, the former CEO of Saint Francis, and William Whymark, an IT executive brought on in 2018 to serve as the chief information officer, are the two executives charged in a federal indictment filed Wednesday in U.S. District Court in Kansas.

Each is charged with conspiracy to commit wire fraud and 10 counts of wire fraud. Smith was indicted on an additional five counts of wire fraud and one count of money laundering, and Whymark was indicted on three additional counts of money laundering. The two face up to 20 years in federal prison if convicted, plus millions in fines and restitution.

In a statement, St. Francis said that it is aware of the indictment and that it will “continue to work transparently and collaboratively with federal authorities as part of the investigative process.”

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The indictment alleges that the scheme began when St. Francis leadership decided to undertake a large-scale revamping of its IT systems in 2018. Whymark’s company WMK Research was hired by Smith to provide IT services and consulting to St. Francis.

The IT project was not put out for competitive bids and Smith never obtained permission from or informed the St. Francis board of his decision to hire WMK Research, the indictment says.

Whymark subcontracted the work to two IT companies in India, an apparent violation of the contract between St. Francis and WMK Research. He also allegedly told the subcontractors to conceal the nature of their employment.

Whymark allegedly “fraudulently inflated the costs” of subcontractor invoices by more than $4.7 million. Smith approved these invoices himself despite the dollar amounts exceeding his approval authority.

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With the millions Whymark allegedly obtained from the fraud, he bought a $4 million home in New York, luxury vehicles and jewelry. Smith allegedly used company credit cards to take out cash and pay for lavish meals and family vacations.

The indictment comes almost two years after whistleblowers came forward to report financial malpractice at the organization, which led to Smith and Whymark leaving St. Francis in 2020.

Before Nebraska terminated its contract with St. Francis, the organization severely underperformed in its child welfare duties: Failing to meet legally mandated caseload limits, failing to meet regularly with children in foster care and failing to document case plans in a timely manner. The Division of Children and Family Services within the Nebraska Department of Health and Human Services now oversees child welfare services in the state.

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