St. Vincents investigated for fraud over allegations it purposely flubbed finances

August 22, 2011 09:28AM

St. Vincent’s Hospital is the subject of an investigation by the Manhattan district attorney’s fraud unit over accusations that it purposely allowed its finances to slip so it could be sold to a private developer, the New York Post reported. Investigators are examining significant payments to top executives at the hospital, sources said.

“This was a well-thought-out plan,” said Tom Shanahan, a lawyer for a group of former St. Vincent doctors and nurses that is suing the hospital. “They wanted out and had to justify it to the state. They were running it into the ground.”

Former hospital CEO Henry Amoroso oversaw the excessive spending, which led to $1 billion in debt and bankruptcy. If not for the bankruptcy, state officials would not have allowed the hospital to close, sources told the Post.

The U.S. Bankruptcy Court for the Southern District of New York approved the $260 million sale of the Saint Vincent’s Catholic Medical Center to the Rudin family and North Shore-LIJ in April, paving the way for a new emergency response medical center and a mixed-use residential project on Seventh Avenue. [Post]