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Sep 16, 2013 11:27 AM EDT

UMass Medical School Employee Stole Millions from State Before His Sudden Death

At the time of his death, Leo Villani was a numbers cruncher in a small UMass office who drove a Porsche and collected Salvador Dali paintings, the Boston Globe reported.

His annual salary was around $46,000 as a financial analyst at the University of Massachusetts (UMass) Medical School. When that Porsche suddenly turned up in the faculty lot and he began building a luxurious house, he told people he inherited money. He was lying. He had actually stole millions of dollars from the state.

Villani died in a one-car accident in Dec. and it was not until afterwards that officials learned of his scheme. Over the last five years, he took $3.4 million in incremental payments from money meant to go to the state Medicaid insurance program.

School officials learned of the scam after a review of his work prompted an investigation. They found irregularities with the account in which he was supposed to deposit the Medicaid checks, called MassHealth. Turns out, he had set up a false corporation for which he had rerouted funds to.

The heist could be one of the largest by a state employee in the past decade.

"It was an appalling scam by a guy who was committed to defrauding an organization," said Edward Keohane, vice chancellor for communications at UMass Medical School. "It's unbelievable. The level of it, the depth of it, was staggering."

Villani's office is part of UMass Medical's Commonwealth Medicine division in Shrewsbury and it provided consulting services. Over the past ten years or so, the division collected about $500 million for MassHealth.

State officials and a watchdog organization said MassHealth deserves criticism for not giving Commonwealth Medicine a competitor. Gregory Sullivan served as the state's inspector general for ten years until last fall and was wary of the comfortable relationship between Commonwealth Medicine and MassHealth.

"A legitimate open competitive bidding process would have protected the public against this kind of theft," said Gregory, who though other debt collectors would have done a better job. "A contract like this should have been opened to... competitors who could have provided security and double and triple checks against theft."

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