A man who gave kickbacks to a Mercyhealth System vice president that resulted in a $3 million loss to the Janesville-based medical provider pleaded guilty Thursday to wire fraud and providing false information on a tax form.
According to court documents filed in federal court in Madison, Ryan Weckerly, 47, of Sycamore, Illinois, prepared internet, radio and television services to Mercyhealth through his two marketing firms.
Barbara Bortner, Mercy- health’s vice president of marketing and public relations, oversaw marketing projects and approval of invoices and bills.
In February 2015, Weckerly agreed with Bortner to send inflated invoices to Bortner for his services to Mercyhealth. He agreed to kick back to Bortner the funds he received from the inflated invoices, and Bortner agreed to use Weckerly’s Morningstar Media Group as Mercyhealth’s primary marketing agency.
To provide a cover for the fraud the defendants engaged in, Bortner created Welnspire, LLC which purportedly performed work for Weckerly’s Invironments Magazine.
Between February 2015 and September 2020, Weckerly wrote 113 checks to Bortner totaling about $2 million and made cash payments in excess of $1 million to Bortner, Assistant U.S. Attorney Aaron Wegner told U.S. District Judge William Conley on Thursday.
To receive the kickback funds, Bortner opened a business account for Welnspire at the Bank of Milton where she was the only authorized signer.
Bortner spent at least some of the kickback funds for her personal use, Wegner said.
Weckerly made the check payments to Welnspire through Blank Slate Media LLC, a company he created to facilitate the fraud. He opened a bank account for Blank Slate in Sycamore where only he and his wife were authorized signers.
In October 2020, Weckerly substantially underreported on a 1099 IRS form the income he paid Bortner. The act resulted in Weckerly being charged with filing a false tax form.
In pleading guilty Thursday, Weckerly admitted to participating in the kickback scheme and underreporting the amount he paid Bortner on a 1099 form.
Conley set Weckerly’s sentencing for March 15 where he faces maximum penalties of 20 years in prison, a $250,000 fine and three years’ supervised release for wire fraud. He faces maximum penalties of three years in prison, a $250,000 fine and one year of supervised release for providing false information on a tax form.
Weckerly also faces restitution orders for the $3.136 million loss to Mercyhealth and the $30,419 loss to the IRS.
Bortner, of Milton, is no longer a Mercyhealth employee. She pleaded guilty last month to tax evasion and wire fraud and is to be sentenced by Conley on Feb. 17. She faces similar penalties as Weckerly. And like Weckerly, she has been released on standard conditions.
Both defendants face restitution orders. The amount they will be required to pay will be set at their sentencing hearings or at a later date by the court.
After the Thursday hearing, Wegner said neither defendant has repaid any money to Mercyhealth or the IRS. He also said Bortner and Weckerly are equally culpable for the scheme to defraud Mercyhealth, but more information about the offense would come out at their sentencings.