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Former Hacienda Healthcare CEO sentenced in fraud scheme

William J. Timmons.png
Posted at 10:37 PM, Nov 19, 2021
and last updated 2021-11-20 00:37:19-05

PHOENIX — Arizona Attorney General Mark Brnovich announced Friday that former Hacienda Healthcare CEO William Timmons has been sentenced for fraud scheme charges he pled guilty to earlier this year.

Timmons was sentenced to three years of supervised probation and will have to pay financial restitution of $774,000 for involvement in what Brnovich describes as "an elaborate white collar fraud scheme that bilked Arizona taxpayers out of millions of dollars."

Timmons served as CEO of Hacienda from July 1989 to January 2019.

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The attorney general's office says the indictment alleged that from 2013 until June 2018, Timmons and his long-time Chief Financial Officer Joseph 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 was also accused of using the money to pay for a large portion of costs at Hacienda's other facilities and did not reimburse the state, as required by the contract. This resulted in millions of dollars of overpayment by the state.

The case against O'Malley is ongoing.

According to the attorney general's office, as part of the agreement with the State of Arizona, Timmons agreed to pay the following in restitution:

  • $500,000 to AHCCCS; and
  • $274,500 to the Attorney General’s Anti-Racketeering Revolving Fund.