State worker alleged to have embezzled $1.1 million

An indictment was unsealed today against a Minnesota state worker who allegedly embezzled more than $1.1 million.

At the time the allegation first surfaced — September 26th — I asked, “So now the question isn’t when did it begin, but when did it end?” And now we know: September 10th, 2008. It started in 2003.

According to the indictment (which you can read here), Kim Austen, 47,of Hudson, headed the Department of Human Services unit that submitted Medicaid claims for payment. Starting in August 2003, the indictment says, Austen created an account for an adult man who was not a Medicaid provider, then added dummy invoices into the state’s system that automatically generated checks.

At a news conference last month, Sen. Linda Berglin said the woman was caught thanks to some recently implemented controls. “This would not be able to happen today,” she said. “It got started before the controls that are in place today were installed, and this hasn’t got caught until today.”

  • Lois Anaveil

    This really is just the tip of the iceberg when it comes to Medicaid corruption.

    With Medicaid money going directly to the healthplans now, lots of money is going to the administrators of these plans (CEO.s, CIO’, and CFO’s to name a few.)

    No one really seems to be paying attention to this change. The players? U Care, Healthpartners, MHP and the Blues…. to name a few.

  • Anna Peterson

    I like how they say that she was caught because of “recently implemented controls”, when in fact it was a teller at a bank that caught it. She was caught when the teller noticed that the check was issued that same day and it was supposedly mailed out to her. It just didn’t make sense. So the teller did some calling and that is how Kim was found out.