St. Luke’s Hit: Curnow Gets 27 Months for $852K FSA Scam

BOISE – Sara Curnow, 44, of Portland, Oregon, is headed to federal prison after being sentenced to 27 months for a brazen scheme to steal $852,041 from St. Luke’s Health System. U.S. Attorney Wendy J. Olson announced the sentence today, following a guilty plea entered on March 29, 2016. Chief U.S. District Judge B. Lynn Winmill didn’t just stop at prison time; Curnow will also serve three years of supervised release, including six months of home confinement, and is on the hook to forfeit and pay full restitution to St. Luke’s.

The con unfolded over seven years, from approximately 2008 through 2015. Curnow worked as an FSA Administrator for Pinnacle Pension Services, a Boise-based firm handling health and dependent care Flexible Spending Accounts for companies like St. Luke’s. These accounts held pre-tax funds for employee expenses, with unspent money typically reverting back to the employer at year’s end. Curnow saw an opportunity, and exploited it with calculated precision.

According to court documents, Curnow identified St. Luke’s employees with leftover FSA funds. Instead of allowing those funds to return to St. Luke’s, she fabricated “dummy” elections and claims within Pinnacle’s system. These weren’t legitimate claims; they were ghosts. She then rerouted the money – 294 transactions ranging from $600 to $9,100 – via interstate wire transfer. The funds flowed from St. Luke’s Wells Fargo accounts, to Pinnacle’s trust account, and finally, into Curnow’s personal accounts at Ally Bank, Mountain America Federal Credit Union, and Navy Federal Credit Union.

The sheer scale of the operation, combined with the size of St. Luke’s workforce (between 5,000 and 11,000 employees), allowed Curnow to operate undetected for years. She systematically siphoned off forfeited funds, banking on the assumption that her fraud would be lost in the shuffle. It wasn’t. Investigators with the U.S. Department of Labor, Employee Benefits Security Administration, and the Boise Police Department eventually pieced together the scheme.

This case is part of a larger initiative spearheaded by President Obama’s Financial Fraud Enforcement Task Force (FFETF), a massive coalition of over 20 federal agencies, 94 U.S. attorneys’ offices, and state/local partners. The FFETF aims to aggressively tackle financial crimes and has reportedly filed over 10,000 cases against nearly 15,000 defendants in recent years.

Curnow’s sentence sends a clear message: exploiting employee benefit plans for personal gain won’t be tolerated. St. Luke’s will receive full restitution, but the damage to trust and the complexity of the fraud underscore the vulnerability of these systems. The Grimy Times will continue to follow this case and report on any further developments.