The former CEO of embattled Hacienda Healthcare, which runs a care facility where a patient was raped by a nurse and became pregnant, has pleaded guilty to two counts of felony fraud.

PHOENIX (3TV/CBS 5) – The former CEO of embattled Hacienda Healthcare, which runs a care facility where a patient was raped by a nurse and became pregnant without anyone's knowledge, has pleaded guilty to two counts of felony fraud.

Attorney General Mark Brnovich announced the guilty plea by Bill Timmons on Monday and said he will be sentenced on July 22. “It doesn’t matter who you are or how well connected you are or if you’re a CEO of a big company, or anyone else. If you rip off the taxpayers were going to hold you accountable. Simple as that,” said Brnovich.

A grand jury indicted Timmons, who was Hacienda's CEO from July 1989 through January 2019, and his chief financial officer, Joseph O'Malley, in August 2020. They were accused of being involved in what the Attorney General's Office described as "an elaborate white collar fraud scheme that bilked Arizona taxpayers out of millions of dollars."

Former employees said it’s about time. “He could just become terribly abusive at the drop of a hat,” our source said. “You always felt like you were going to be fired at any moment.” For those who had to work under Timmons, they’re thankful his past has caught up with him. “We were under his thumb and under that abuse for so many years. We agreed collectively he was probably the most abusive employer that we’ve ever worked for,” this source said. “There was just a sense of relief, a sense of justice, and we’re just happy for the news,”

According to the indictment, Timmons and O'Malley allegedly "misallocated" money from the state from 2013 until June 30, 2018, by "by manipulating costs to avoid repayments of state funds in favor of inflated salaries and bonuses."

This inside source who asked we keep them anonymous always felt there was something more at play with the financials, though they were kept in the dark about what was really going on. “Towards the end he was showing up for work every day driving exotic Alfa Romeo sports cars,” our source said. “All of that money that was just raked off of the state, ultimately that equals diminished care. So I think that’ the most disgusting part of it all.”

Timmons, who resigned in January 2019, could be sentenced to between three and 12.5 years in prison on each of the two felony fraud counts. The Attorney General's Office said that while there is no agreement about how he will be sentenced, Timmons has agreed to pay $500,000 to the Arizona Health Care Cost Containment System (AHCCCS) and another $274,500 to the Arizona Attorney general's anti-racketeering revolving fund.

O'Malley, who resigned in March 2019, has not settled his case, which is slated for trial on March 8, 2022.

Hacienda Healthcare first made headlines all over the world when Arizona's Family broke the news on Jan. 4, 2019, that an incapacitated patient gave birth to a baby on Dec. 29, 2018. None of her caregivers knew she was pregnant. Police eventually arrested one of her nurses, Nathan Sutherland, saying his DNA matched that of the patient's baby.

The fraud investigation began in early 2019, about the same time as news of the unexpected birth came out. At the time, the Arizona Attorney General's Office said AHCCS had overpaid Hacienda by almost $11 million. The AGO reached a settlement with Hacienda to pay back that money plus a fine of $1 million.


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