Two metro-area men convicted of embezzling $505K from employer, Park Nicollet clinic

Federal jurors have convicted two Twin Cities men of embezzling more than $500,000 from a Park Nicollet clinic where they worked.

Gregory C. Koch, 59, of Minneapolis, and Jerome D. Kangas, 58, of Blaine, were convicted in U.S. District Court in Minneapolis last week of mail fraud and conspiracy to commit mail fraud in a scheme that spanned several years while they worked for the Park Nicollet CPAP clinic in St. Louis Park. Kangas also was convicted of currency transaction fraud.

Koch and Kangas await sentencing, which has yet to be scheduled.

"We are disappointed in the verdict," Koch's attorney, Paul Engh, said Monday. "During his long and award-winning career, Greg was always devoted to his patients and the quality of their care."

Joe Friedberg, an attorney for Kangas, declined to comment about the verdicts, which came at the end of the seven-day trial.

According to prosecutors;

Kangas was hired in June 2013 as a clinician in the CPAP clinic, where Koch was the supervisor and later the manager. CPAP machines treat sleep apnea.

Although Kangas worked only after-hours and weekends responding to CPAP patient calls, Koch entered more than 8,500 weekday hours on behalf of Kangas for work he did not perform. On most of the days when Kangas was paid, he was either working for another employer or was out of town.

Also, Koch logged into the company network for Kangas and helped him reset his computer password to conceal he was not working.

Between June 2013 and June 2018, Koch and Kangas defrauded Park Nicollet of more than $505,000 in pay. The scheme was discovered when Koch was laid off in 2018 as a result of the acquisition of Park Nicollet by HealthPartners.

The currency transaction fraud committed by Kangas occurred during a 12-day period in the summer of 2017 when Kangas made six withdrawals between $5,000 and $5,500 from four Wells Fargo Bank branches, for a total of $30,500.

Federal law requires banks to report currency transactions above $10,000, as a means of detecting financial crimes. Four days after the last $5,500 withdrawal by Kangas, Koch made a $29,300 cash deposit into his own US Bank account.