Hospital: Forgers defrauded patients
New England Baptist believes worker was part of check scheme
A check forgery ring targeted patients at New England Baptist Hospital in Boston, using private checking account information and stolen identities to take as much as $3,000 from each victim, according to hospital and law enforcement officials.
So far, nine victims have been identified by the hospital, but more may have been targeted, officials said. The victims' checking accounts were raided between December and May, but they have since been reimbursed by their banks. Officials say they believe other organizations probably were also targeted by the ring, and many more people may have been victimized.
The Canton Police Department was the first law enforcement agency to become involved in the case, after being notified by a Canton bank of a bad check. "We're seeing a large network," said John Ruane, a Canton police detective investigating the check forgeries. "They know what they're doing and they're successful. This ring isn't targeting just New England Baptist. There are many others being victim ized."
Ruane is working with Detective Bill Monteith of the Quincy Police Department and the Massachusetts Financial Crimes Task Force, which is affiliated with the US Postal Inspection Service.
Joseph D. Dionisio, chief executive of New England Baptist, told hospital employees about the scam yesterday. He believes the forgers were assisted by a hospital employee.
"It appears we have had a security breach in our Spine Center resulting in the financial information of nine patients being used to create counterfeit checks and withdraw funds from their accounts," Dionisio wrote in an e-mail to employees. "My heart is very heavy today. Our Spine Center patients come to us because they are in pain, and to think that they have been victimized within the walls of our organization is devastating to me personally."
Dionisio is also sending letters to each of the roughly 6,000 patients who have been treated at the Spine Center since December, asking them to review their banking records.
"Monitor your bank statements, particularly around the time of your visit to the hospital," Dionisio wrote. "Should you notice any suspicious activity, we urge you to contact your bank as well as your local police department."
The forgery ring appears to have used basic methods, according to Ruane and hospital officials: A hospital insider apparently took bank routing and account numbers from checks used by patients. The forgers then used popular check-writing software and magnetic ink - available at office supply stores - to create counterfeit checks. The checks were made out to victims of identity theft - someone whose wallet had been stolen and whose driver's license could be used to cash the check. To minimize suspicion on the part of bank employees, the checks were made payable for less than $3,000, a threshold at which some banks require additional identification or approvals.
"This looks like something low-tech," said inspector Trish Rebello of the Boston Division of the US Postal Inspection Services. "People are so cautious with the Internet and firewalls, it seems we're finding that perpetrators are going to the old-fashioned ways of obtaining information."
Brian Riley, research director with TowerGroup, a Needham firm that advises banks, said, "The forgery side these days is easy. Not only can you get the check-writing software, you can also buy the magnetic ink so the check travels through the whole payment system undetected."
New England Baptist Hospital, located atop Mission Hill, is a premier orthopedic surgical hospital and treats more patients for joint, bone, and related issues than any other hospital in Massachusetts. It is also the official team hospital of the Boston Celtics. The Spine Center is an outpatient facility that treats back pain without surgery.
Erin McDonough, a hospital spokeswoman, said patients who have been harmed by the data breach will be given a year of free access to a credit-monitoring service, which can help detect any subsequent misuse of financial information. Patients who believe their accounts have been misused, or who have questions, can call 877-754-5145, she said.
"We consider every bit of information about patients to be secure information," said McDonough.
"This surprises us because we and other hospitals are so protective of patients' information because of our statutory need to protect health information."
McDonough said the hospital believes bank and account information was copied directly from checks made out by patients. Patient medical records were not compromised, she said.
Rocky J. Lapomardo, a former Massachusetts State Police sergeant who is a private investigator specializing in fraud and white collar crime, said he believes the scam goes well beyond New England Baptist Hospital.
"If they're only taking $1,000 to $3,000 from victims, I think they're targeting other hospitals and some probably don't want to report it," said Lapomardo.
"This is not a scheme somebody thought up in their garage."
Ruane said New England Baptist is helping the investigation by making the situation public.
"It could flush the person out," he said. "You could see a worker tender their resignation tomorrow."
No arrests have been made, and the investigation is ongoing, Ruane said.
Jeffrey Krasner can be reached at krasner@globe.com.
