Former Medical Center Administrator Allegedly Siphons Funds Using CU Account

Federal prosecutors alleged a former administrator stole more than $500,000 from the University of Kansas Medical Center by using its credit union account to bypass KUMC’s financial oversight.

A federal indictment filed last week by the U.S. Attorney’s Office in Kansas City charged Michael Ahlers with 10 felony counts of bank fraud.

Ahlers was an administrative officer responsible for all financial transactions at KUMC’s Occupational Therapy Education Department.

In June 2007, he was the only KUMC employee who was a signatory on the OT Education Department account at the $29.9 million KUMC Credit Union in Shawnee. In November 2012, Ahlers made himself the sole signatory on the account, according to court documents.

As the sole signatory of the KUMC account and without the medical center’s knowledge or consent, Ahlers bypassed KUMC’s oversight and processes by which funds are deposited and allocated in state-controlled bank accounts and reconciled monthly, federal prosecutors alleged in court documents.

From 2009 to 2015, the former KUMC employee allegedly withdrew money from the credit union account and used it for his personal use. He took out the funds through cash withdrawals and cashier’s checks made payable to himself, members of his family and a business controlled by him and another person only identified by initials, according to the indictment.

To conceal his fraud, Ahlers generated invoices outside of KUMC’s established financial system so that only he had visibility of the funds that he caused to be deposited into the KUMC account, the indictment alleged.

Court documents did not specify how the former KUMC employee spent the stolen funds.

Additionally, federal prosecutors have charged Ahlers with three felony counts of filing false federal income tax returns for failing to report his ill-gotten gains.

KUMC President/CEO Nate Boylan declined to comment when reached by phone Tuesday.