Arizona Attorney General Mark Brnovich announced Monday that the former Hacienda Healthcare CEO has pleaded guilty to fraud scheme charges.
William Timmons, the former CEO of Hacienda Inc., pleaded guilty to two felony counts of fraudulent schemes and artifices. Timmons has a sentencing hearing scheduled for July 22.
In a release, the attorney general's office said Timmons and his long-time Chief Financial officer (CFO) Joseph O'Malley were indicted in August 2020. The indictment was based on a series of charges relating to their alleged involvement in a white-collar fraud scheme that bilked Arizona taxpayers out of millions of dollars.
As part of the plea agreement with the state, Timmons has agreed to pay the following in restitution:
- $500,000 to the Arizona Health Care Cost Containment System (AHCCCS)
- $274,500 to the Attorney General’s anti-racketeering revolving fund
Timmons served as CEO of Hacienda from July 1989 to January 2019.
The attorney general's office says the indictment alleged that from 2013 until June 2018, Timmons and O'Malley purposely misallocated funds from the Arizona Department of Economic Security’s Division of Developmental Disabilities (DES/DDD) and AHCCCS by manipulating costs to avoid repayments of state funds in favor of inflated salaries and bonuses.
Timmons faces between three to 12.5 years for each charge.
In 2019, Timmons faced sexual harassment allegations and was allowed to keep his position as CEO.
That year, Gov. Doug Ducey weighed in on the Hacienda Healthcare investigation calling for the termination of senior leadership at the healthcare facility.
"The senior leadership in that enterprise needs to be completely replaced," Ducey wrote. "That includes the Board of Directors, every one of whom should be terminated immediately."
He also stated he has "zero confidence" in the facility's leadership.
A judge recently approved a $15 million settlement against a doctor in a lawsuit by the parents of an incapacitated woman who was sexually assaulted and gave birth at Hacienda Healthcare.
In 2019, Arizona Medical Board records showed Dr. Phillip Gear agreed to a consent order to surrender his license and not contest the matter in court.