Queer Eye-Featured Clinic Investigated for Fraud
Missing half a mil
By Lina Fisher, Fri., April 7, 2023
For months after Queer Eye's Austin season back in 2021, Dr. Jereka Thomas-Hockaday and the clinic she co-founded, Central Texas Allied Health Institute, enjoyed their moment in the spotlight. A glowing Elle profile described the profound work CTAHI was doing in the community, distributing COVID vaccines and tests through contracts with Austin Public Health and the Economic Development Department. Elle also noted that APH had terminated their contract with CTAHI, though they provided a statement that "we believe their work is critical to building a diverse, locally sourced health care workforce."
Now, the scope of that work is being called into question after the Office of the City Auditor released a report last month finding that between December 2020 and September 2021, CTAHI misrepresented over $1.1 million in financial transactions to APH, overreporting vaccinations and directing employees to falsify invoices and bank statements. CTAHI was paid $2.8 million in total from the contracts, $417,000 as a result of these fraudulent claims. After an APH investigation, CTAHI conducted its own investigation internally and agreed to pay APH $375,000 back in June 2022; as of March 2023, they had only repaid $12,500. CTAHI's general counsel Mikal Williams told the Chronicle $68,000 in late monthly payments is forthcoming.
CTAHI's response to the audit denies any intentional fraud and attributes discrepancies "100% [to] APH's inadequate and inappropriate guidance" on billing, and to simple mistakes resulting from circumstances like Thomas-Hockaday filling in for co-founder Todd Hamilton while he was on vacation. Brian Molloy, investigator for the auditor's office, says, "None of that makes any sense with the evidence we found. I don't know how you can create an invoice, and add details to it to make it look like it was paid, and call that a mistake. Someone at CTAHI is sitting down and editing PDFs."
By comparing CTAHI data to APH and state vaccination records, the audit found that CTAHI overstated vaccination totals by 20%-30%. They reported over 1,000 vaccines on one day, June 5, 2021, though internal records confirm only 59, and a "witness with knowledge of vaccine operations" told the auditor 1,000 in a day was beyond their capacity. CTAHI disputes this, says the auditor's office fixated on one day unfairly, and blames "disgruntled employees who had been fired" for falsifying records. One employee in question was supposedly motivated to retaliate by a mandatory return to office communicated in July 2021; Molloy says CTAHI began submitting falsified documents in 2020, "so blaming it on this individual doesn't add up."
The auditor's office also received allegations that Hamilton embezzled $30,000 to $60,000 from CTAHI, though CTAHI refutes this and the auditor could not confirm. In a written statement, CTAHI denies any intentional or unintentional fraudulent activity, and Thomas-Hockaday writes: "This process was not only frustrating but has caused irreparable damage to our name and reputation. ... There is a long-documented history of the City of Austin having difficulties working with small minority contractors and then blaming the failures in execution on the contractors themselves. ... I was told by numerous peers who had worked with the city before to not take this contract, but I naively thought I could make a difference because of the pandemic."
"No one was targeting CTAHI," Molloy counters. "Everyone was rooting for CTAHI at the city and wanted this to work out. They had a great-sounding mission, they were targeting a part of the community that APH really wanted to reach out to. This fell apart because of CTAHI's actions." He says this is the first case of pandemic fraud that the city has received, though fraud complaints did increase as workers returned to office. Nationally, the Department of Justice is investigating billions of misused pandemic-related dollars. APH mentioned in their response to the audit that understaffing and the emergency of the pandemic contributed to rushed contract monitors with larger workloads and less oversight, and Molloy says the auditor is developing data analysis tests of APH's other vendors in light of this. The report notes that new processes for contract managers to verify expenses will be implemented August 1 this year.
The Austin Police Department is investigating CTAHI for fraud, and the Law Department "remains in conversation with City departments about appropriate next steps" should CTAHI fail to pay APH back fully.
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