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Former KU Med Center Administrator Charged With Embezzlement

011521_cm_KUMedEmbezzle_carlos moreno
Photo Illustration-Carlos Moreno/KCUR 89.3
Michael Ahlers faces felony charges of bank fraud and tax evasion.

The felony charges respectively carry maximum prison sentences of 30 years and three years in prison.

A former administrator at the University of Kansas Medical Center faces criminal charges that he embezzled more than $500,000 from KU.

A charging document filed this week in federal court accuses Michael Ahlers of diverting the money from the KUMC Credit Union between 2009 and 2015.

Ahlers, a resident of Lenexa, Kansas, was the administrator of the med center’s occupational therapy education department. According to the complaint, he was the sole signatory on the credit union account.

The document also charges him with income tax evasion because he allegedly failed to report the money on his tax returns.

Ahlers could not be reached for comment. His attorney, Robin Fowler, declined to comment.

KU’s occupational therapy education department is part of its School of Health Professions and offers degrees in occupational therapy.

Ahlers allegedly generated invoices outside of the med center’s financial systems so that only he knew of the funds he withdrew from the credit union account, according to the charging document.

A spokeswoman for KU Medical Center, Kay Hawes, said no state funds were involved. Rather, she said, the account in question involved student fees and payments to the occupational therapy department for services rendered.

“The University of Kansas Medical Center is fully cooperating with the U.S. Attorney’s Office regarding this case,” Hawes said in an email. “A KU Medical Center internal investigation uncovered the fraudulent activities, which were limited to one individual and affected a single department. After the initial internal investigation, the medical center contacted the Kansas Bureau of Investigation, which partnered with the U.S. Attorney’s Office to conduct an additional investigation leading to these charges.”

Hawes said the medical center has since taken action to improve financial controls and “takes very seriously its role as a steward of public funds.”

“We continue to examine financial controls to protect the university from dishonest individuals,” she added.

The felony charges Ahlers faces – bank fraud and filing false tax returns – respectively carry sentences of up to 30 years and three years in prison.

A LinkedIn profile for a Michael Ahlers of Lenexa showed his most recent employment was as a revenue cycle analyst at Cerner Corp., the Kansas-City based health information technology giant. The LinkedIn profile, which noted his previous employment at KU Medical Center, was later deleted.

A Cerner spokesperson said she was not able to confirm Ahlers’ employment at the company.

Bankruptcy court documents indicate Ahlers filed for Chapter 7 bankruptcy in 2019 and received a discharge of his debts later that year.

On his bankruptcy petition, he listed debts of more than $1 million, including nearly $456,000 in delinquent federal and state taxes. The petition also said that he and his wife owned a retail liquor store in Lenexa.

Ahlers’ initial court appearance is set for Jan. 29.

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
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