Former CFO of Chicago hospital sentenced to 1 year in prison

Roy Payawal, the former CFO of now-shuttered Sacred Heart Hospital in Chicago, has been sentenced to one year in prison for his involvement in a kickback scheme, according to a Chicago Tribune report.

Mr. Payawal's one-year sentence is far less than what was requested by prosecutors, who sought a term within federal guidelines that could have put Mr. Payawal behind bars for as many as 10 years. The former CFO also got a much lighter sentence than the hospital's former CEO, Edward Novak, who was sentenced to 4 1/2 years in prison earlier this week for his involvement in the scheme.

In March, a federal jury deliberated for three days before convicting Mr. Payawal, Mr. Novak and the hospital's former COO, Clarence Naglevoort, of conspiring to pay hundreds of thousands of dollars in kickbacks to physicians for referrals to Sacred Heart. At trial, prosecutors argued Sacred Heart reaped nearly $35 million over the 12-year kickback scheme, according to the report.

As the hospital's CFO, Mr. Payawal played a significant role in the scheme, as he was the one who approved check requests for the physicians receiving kickbacks and "decided how to code the payments in the hospital's general ledger to conceal the true nature of those payments from outside financial analysts," prosecutors said in a recent court filing, according to the report.

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