IRS: executive director of a U of L medical department wrote che - WDRB 41 Louisville News

IRS: executive director of a U of L medical department wrote checks to himself

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LOUISVILLE, Ky. (WDRB/AP) -- The Internal Revenue Service says the now-former head of the University of Louisville's Department of Family & Geriatric Medicine wrote checks to himself for over $2 million.

Perry "Chad" Vaughn is due in federal court on Monday after federal prosecutors obtained a preliminary injunction to prevent him from spending any of the money. The IRS says the money came from the department and affiliated medical practices.

In December of last year, a court document says, U of L's Audit Services heard testimony that the quality of Vaughn's work had gone down, and that he was frequently absent.  It was also told that he took frequent trips to Las Vegas and that he had taken his two children and his mother to Grand Turks and Caicos.  It also heard that Vaughn was wearing expensive clothing and driving expensive automobiles.

Auditors looking into the case said they found evidence that some bank accounts had been altered, with deposit totals and the number of deposits found to be wrong, a check number duplicated, and dates out of order.

The court document says when Vaughn was interviewed by a U of L Police detective and FBI special agent, he admitted to issuing 25 fraudulent checks to himself.  Those checks added up to nearly $704,000.  But authorities say additional evidence brings that total up to over $2 million.

U of L has since fired Vaughn.  Gary Mans, Director of Communications and Marketing with the U of L Health Sciences Center, released a statement saying the university is cooperating fully in the investigation.  He added, "The University of Louisville has solid internal controls in place to guard against the misuse of university funds. But it's up to employees and their supervisors to follow those policies and procedures. Unfortunately, an employee occasionally will violate the public trust. When this occurs these individuals will be aggressively prosecuted."

Vaughn has not been charged criminally. Federal prosecutors filed a civil complaint against him detailing a criminal investigation.

Emails sent Wednesday morning to Vaughn's University of Louisville accounts were returned as undeliverable. Emails sent to a personal account listed in court documents drew no immediate response.

However, WDRB News was able to track down Vaughn's attorney. 

"Mr. Vaughn hired me about a week ago after he was interviewed by federal agents," says John Olash, Vaughn's attorney.

Louisville attorney John Olash is representing Vaughn, he can't comment on the alleged spending but says he is preparing for both civil and criminal charges.

"We expect an indictment at some point and at that time the government will be required to give me all the records that support the charges and I'll be in a position to determine what defenses exists."

According to the civil complaint, a co-worker sent an e-mail to the University of Louisville audit services in October of last year.  It outlines her concerns about Vaughn's apparent overt expenditure of money, seemingly behind his means.  An internal audit was then initiated and determined that in a span of just a few months...Vaughn issued at least 25 checks to himself for more than 7-hundred thousand dollars.

Meanwhile, the University terminated Vaughn on Wednesday morning.

Olash says, "They have frozen his accounts, and they've searched his office."

Olash also says that put even more of a hardship on his client.  "He was terminated today but the last check he went into his account but because his account is frozen he didn't realize any money so he's in a tough spot trying to support his family and pay his bills."

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