A father and son were sentenced on Friday for conspiracy to commit mail fraud through a scheme to embezzle medical equipment owned by Kaiser Foundation Hospitals and Health Plan, Inc., the Department of Justice announced.
Anthony Montanelli, 34, and his father, Steven Montanelli, 63, both of San Ramon, pleaded guilty to the charges on Jan. 14.
According to the plea agreement, the men worked for Kaiser as biomedical engineers and were responsible for repairing and servicing ultrasound equipment. The men used their positions to order new ultrasound parts that were supposed to be used for repairs or maintenance, but instead were diverted into their own side business, Pacific Coast Imaging (PCI).
The defendants then sold those parts through PCI for their own profit, according to the plea deal. The pair also did not disclose to Kaiser that they had the side business, which they operated during their Kaiser work hours.
The father and son admitted that from February of 2010 to about April of 2018 they worked together to defraud Kaiser. They even went as far as to rent a storage facility to stockpile new, used, and decommissioned Kaiser-owned ultrasound systems and parts. Some of the Kaiser inventory was sold or leased to PCI customers. The pair also admitted that they would report items as decommissioned so that they could divert them to their side business.
The Montanellis admitted that the value of the loss to Kaiser exceeded $1.5 million. Anthony Montanelli has given Kaiser restitution in the amount of $449,955 so far, bringing the total restitution amount to $1,649,955, according to the DOJ.
Anthony Montanelli was given a year and a day in prison for his crime and he is due to surrender on or before July 1. His father Steven has been given five years' probation. Both are ordered to pay $1.2 million within 90 days, as well and a fine of $150,000 each.