Pittsburgh Post-Gazette

Former Ohio health care exec sentenced for bank rip-off

- By Torsten Ove

Harold Sosna, the former president of an Ohio health care company that ran nine nursing care facilities in that state, is headed to federal prison for 42 months for perpetrati­ng a $59 million checkkitin­g scheme that defrauded S&T Bank in Indiana, Pa.

U.S. District Judge Marilyn Horan imposed that term Thursday in federal court in Pittsburgh.

Sosna, 67, who lives in Cincinnati, pleaded guilty a year ago following an investigat­ion by the Pittsburgh FBI.

Sosna was president of Premier Healthcare Management of Blue Ash, Ohio, which ran nursing care facilities in southern and central Ohio for people recovering from surgery. Each facility was a limited liability corporatio­n that owned the building and land. The corporatio­n then leased the property to an S corporatio­n that was granted a state license to operate a care facility.

Premier contracted with the S corporatio­n to provide the staff for the facility, each of which was a subsidiary of Premier. Premier

operated separate accounts at various banks, including S&T in Indiana and First Financial Bank in Cincinnati.

From May 15-18 of 2020, Sosna executed a scheme to defraud the banks by writing checks between various accounts under his control and associated with Premier and its subsidiari­es in a check-kiting scheme.

Check-kiting is the practice of writing a check for value greater than the account balance from an account at one bank and then writing a check from another bank, also with insufficie­nt funds, with the second check serving to cover non-existent funds from the first account.

Prosecutor­s said Sosna used the scheme to manipulate the balance in the accounts and “create the false and fraudulent appearance that the defendant had sufficient legitimate available funds in various accounts, and to trick the banks into honoring checks drawn against accounts with insufficie­nt funds.”

As part of the crime, Sosna sent more than $118 million through various banks which were unfunded amounts and “the equivalent of obtaining money from the banks without actual properly secured loans.”

He negotiated a total of 203 checks.

As a result, S&T Bank incurred a loss of nearly $60 million.

Herbert Haas, Sosna’s lawyer, blamed financial pressure for the crime.

He said his client founded the company in 1998 and had poured all of his time and energy into it. But by 2017 the business was failing and by 2019 the situation was “dire,” he said. Sosna made efforts to restructur­e Premier’s financing with traditiona­l lenders but couldn’t secure favorable terms. He also rejected bankruptcy as an option because of his “love of the staff, the patients, his family, and frankly his own pride and ego,” Mr. Haas said in sentencing papers.

Instead, Sosna resorted to getting short-term loans from pay- day lenders, whom Mr. Haas described as loan sharks. He gave the lenders direct access to his business accounts. The financial condition of the company deteriorat­ed further. The decline took a toll on Sosna’s health and his drinking reached “an abusive level,” Mr. Haas said.

COVID-19 was the final blow to the company, according to Mr. Haas.

Instead of accepting the end of the business, Sosna decided to embark on the check-kiting scheme over a three-day period in May 2020.

When one of the banks flagged the transactio­ns, Sosna reported what he’d done to the U.S. attorney’s office and the FBI in Cincinnati, Mr. Haas said. The Pittsburgh FBI took the case because the victim bank is in the bureau’s Pittsburgh jurisdicti­on.

Mr. Haas said Sosna has cooperated with federal authoritie­s and is dedicated to paying back what he owes.

“Mr. Sosna is deeply, deeply remorseful for his conduct, and as his actions have demonstrat­ed, he has devoted himself to doing whatever it takes to make amends for his crime,” Mr. Haas said.

Judge Horan also ordered Sosna to be on probation for three years when he gets out.

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