Libby’s $650,000 Medical Practice Heist

A 40-year-old Brookline woman has been charged with embezzling over $650,000 from a local medical practice, federal authorities announced today.

Kathleen Libby, of Brookline, was charged with one count of wire fraud after allegedly stealing from the medical practice in a variety of ways, including transferring funds to her personal PayPal account.

According to the charging documents, Libby established a PayPal account under the name ‘Medline Surgical Supplies’ and used it to create the false impression that transfers from the practice were expenses for medical supplies.

The investigation revealed that Libby also used the medical practice’s bank account to make personal purchases at high-end retailers, including Louis Vuitton and Bloomingdales, as well as travel-related websites.

The charging documents also allege that Libby placed two of her relatives on the medical practice’s payroll and used its credit cards for her own benefit, further lining her pockets with the embezzled funds.

The charge of wire fraud carries a sentence of up to 20 years in prison, up to three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater.

Acting U.S. Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, made the announcement. Assistant U.S. Attorney Mackenzie A. Queenin of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.

The details contained in the charging document are allegations. Libby is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Libby’s alleged scheme was uncovered through an investigation led by the Federal Bureau of Investigation, Boston Division, with the assistance of the U.S. Attorney’s Office for the District of Massachusetts.