PITTSBURGH (AP) — The former chief executive of a western Pennsylvania medical billing and staffing firm is scheduled to be sentenced for securities fraud and tax evasion that cost shareholders about $41 million.
Federal prosecutors initially claimed the scheme by 38-year-old Richard McDonald, of Leechburg, caused a $200 million loss to World Health Alternatives investors. But prosecutors have agreed he’ll be sentenced based on a $41 million figure agreed to at his guilty plea in April to fraud and tax-related charges.
McDonald resigned just before the firm filed Chapter 11 in 2005.
Prosecutors say McDonald siphoned money from the company, manipulated records to hide $2.3 million in unpaid payroll taxes, and fudged records overstating loans he made to the company and financial statements used to fool auditors and shareholders.