Lawyer sentenced to prison for stealing $1.2M in patient payments from St. Luke's

Alan B. Gallas, 65, was sentenced Friday to one year and one day in federal prison for stealing more than $1.2 million from Kansas City, Mo.-based St. Luke's Health System between 2009 and July 2015, according to the Department of Justice.

Mr. Gallas' firm, Gallas & Schultz, collected past-due payments from patients for the hospital network. Money collected by the firm on behalf of St. Luke's was supposed to go into a trust account. However, Mr. Gallas admitted in April that he had employees put holds on more than $1.2 million in St. Luke's collections and then transfer the funds to the law firm's operating account.

Mr. Gallas' law partner Mark J. Schultz, 57, pleaded guilty Friday to participating in the fraud conspiracy. He admitted to transferring funds from the trust account to the law firm's operating account. The total amount of funds diverted by Mr. Schultz will be determined by the court at his sentencing hearing, according to the DOJ. He faces up to five years in federal prison for his role in the scheme.

In addition to his prison term, Mr. Gallas was ordered to pay more than $1.2 million in restitution.

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