Disbarred KC lawyer pleads guilty in $1.2 million theft from St. Luke’s Health System
A recently disbarred Kansas City lawyer pleaded guilty Wednesday to embezzling more than $1.2 million from St. Luke’s Health System.
Alan B. Gallas, 64, waived his right to a grand jury and pleaded guilty in U.S. District Court in Kansas City to mail fraud.
His firm served as a collection agency for patients who were behind on payments to the hospital system.
Gallas admitted that from 2009 to July 2015, he defrauded St. Luke’s Health System out of $1,224,264. He must pay that amount in restitution as part of Wednesday’s plea agreement.
According to federal court documents, money collected by his firm on behalf of St. Luke’s was placed in a trust account. Periodically, those payments would be sent to St. Luke’s.
But according to the documents, Gallas had employees of his law firm withhold money from payments made to St. Luke’s by placing thousands of payments on “hold” status, then having that money transferred from the trust account to the law firm’s operating account.
According to prosecutors, Gallas withheld 62 payments totaling $89,495 in 2009; 439 payments totaling $132,167 in 2010; 613 payments totaling $79,776 in 2011; 601 payments totaling $211,391 in 2012; 699 payments totaling $266,696 in 2013; 625 payments totaling $227,892 in 2014; and through July 2015 he withheld 625 payments totaling $216,845.
Last fall, Gallas, a former president of the Kansas City Metropolitan Bar Foundation, voluntarily surrendered his law licenses in Kansas and Missouri. He also has been disbarred in both states.
A sentencing hearing is scheduled for Aug. 10.
Tony Rizzo: 816-234-4435, @trizzkc
This story was originally published April 13, 2016 at 11:16 AM with the headline "Disbarred KC lawyer pleads guilty in $1.2 million theft from St. Luke’s Health System."