The large-scale fraud committed by a former high-ranking administrator at the Medical Center signaled not only a sophisticated evasion of Georgetown’s spending safeguards, but also weaknesses in the university’s financial accountability system on multiple levels, according to federal court documents.

Administrators said they have taken steps to bolster Georgetown’s financial accountability structure, following the university’s 2003 discovery of wide-ranging illegal transactions in the Medical Center that cost the university over $500,000.

Adriana Santamaria, who served as the financial administrator of the Medical Center’s Department of Microbiology and Immunology from 1989 to 2002, pleaded guilty late last month to illegal use of federal grant funds after an investigation by the U.S. Secret Service and U.S. Attorney’s Office. She currently faces up to 10 years in prison.

As part of her guilty plea, Santamaria signed a statement detailing her fraudulent actions and admitted stealing over $350,000 from the university through various financial schemes from 1995 to 2002. Because Georgetown reimbursed the federal government not only for grant money that was actually stolen, but also for indirect overhead costs that are not assigned to any particular grant, the total cost to the university exceeded $500,000.

“Georgetown has a solid financial control system, through which it detected Ms. Santamaria’s embezzlement, and has since taken steps to further strengthen that system,” university spokeswoman Julie Bataille said.

Bataille said that Georgetown has created additional safeguards, such as reducing the authority given to department-level administrative officers. The university has also improved its financial tracking systems and implemented increased documentation requirements for purchases, she said.

In her statement, Santamaria specified several methods by which she escaped detection by administrators, including disguising personal expenses, misdirecting documents and forging spending authorization forms.

As the Department of Microbiology and Immunology’s chief accountant, Santamaria had primary control over the department’s budget and spending decisions, according to her statement. Although she was technically required to obtain the approval of other administrators and faculty for any expenditures, Santamaria was able to abuse her position to unilaterally order reimbursements, hire temporary labor and conclude university contracts with third-party vendors.

Santamaria and her attorney, John Patrick Pierce, could not be reached for comment. University officials declined to comment on the specifics of the case, citing a policy of not discussing internal personnel matters.

Honoraria

By far the largest theft, according to a statement by the U.S. Attorney’s Office and court filings, was conducted through the issuance of speaker’s fees by the university to Santamaria’s relatives, who were not qualified to and never did give lectures at the Medical Center. Between May 1998 and October 2001, Santamaria filed 37 requests for honoraria for lectures given by her sister, Maria Cabrales, and Cabrales’ husband.

Santamaria siphoned $290,000 in university federal and non-federal grant money through this scheme, which was deposited in Cabrales’ and her husband’s joint bank account. In return, Cabrales, who also pleaded guilty last month and admitted her role in the fraud, would sign checks giving Santamaria a share of the money.

Under normal circumstances, speakers were only contracted to give lectures upon the approval of the researcher, or “principal investigator,” whose grant money was to be used for the speaker’s fee, according to court documents. Principal investigators were responsible for arranging a lecture, then writing a confirmation letter to the future speaker.

Afterward, an expense authorization form with information about the speaker and principal investigator would be submitted to the university’s Accounts Payable Department, along with copies of the confirmation letter and federal tax forms. The Accounts Payable Department would then issue a check to the speaker for the agreed fee.

No principal investigator ever gave Santamaria authorization to contract lecturers or arrange for honoraria. But by forging documents and creating the illusion that a principal investigator had approved the speaker’s contract, Santamaria was able to operate with impunity, issuing expense requests directly to the Accounts Payable Department without the involvement of Medical Center researchers.

There is also no indication that accounting or other officials questioned the frequency of lectures being given by Cabrales and her husband during this three-year period, or the large honoraria, which ranged up to several thousand dollars per lecture, according to court filings.

Casual Labor

Santamaria also admitted abusing the university’s casual labor employment system, through which Georgetown hires temporary workers, from 1995 to 1998. Although she did not have the required approval of a principal investigator, Santamaria filed multiple expense authorization forms requesting payment of her relatives for work they never actually performed.

Without the knowledge or authorization of principal investigators, Santamaria and Cabrales obtained a total of $87,750 in fraudulent casual labor payments from Georgetown’s payroll office. Santamaria’s position again allowed her to evade multiple financial safeguards and mask the fact that labor paid for had never actually been performed, according to prosecutors and Santamaria’s statement.

Santamaria also admitted submitting a number of fraudulent requests between 1996 and 1998 for reimbursement of personal, non-university related expenses. The requests typically involved meals at restaurants near Santamaria’s residence in Centreville, Va., which she claimed were business-related dinners with graduate students and principal investigators.

Santamaria then listed principal investigators on her reimbursement request forms who had never actually approved the requests, or even had any knowledge of the Centreville dinners. She admitted receiving almost $7,000 in payments through these personal reimbursement forms.

Third-Party Vendors

Santamaria and Cabrales also admitted conspiring to request university funds for third-party vendors who were actually performing personal services for the sisters between 1996 and 2002.

Normally, a vendor was hired by the university with department purchase requisitions, which were issued by individual employees in each Medical Center department, then sent to Georgetown’s Purchasing Department.

After the Purchasing Department approved the request, a vendor would request payment from the Accounts Payable Office.

Santamaria’s position, however, gave her the opportunity to create purchase requisitions for personal services such as a cell phone and flower arrangements. She then assigned reimbursement requests to various principal investigators, none of whom knew of the expense forms being filed in their names.

In one case, Santamaria wrote on an expense form that a purchase from a local floral shop was for a “fruit basket to the Delgado family as a thank you for expediting matters for the department in an efficient manner.” The principal investigator whose name appeared on the expense request later said he never signed the form or even knew of a Delgado family, according to court documents.

Santamaria also shuffled identifying numbers associated with various university credit card accounts from April 2001 to January 2002. The misdirection allowed her to spend over $17,000 on personal costs at Georgetown’s expense, including $1,285 at a local guitar store to purchase musical equipment for her son.

While a purchase will normally appear alongside an administrator’s name, allowing charges to be traced directly to the owner of the card, Santamaria redirected and misidentified various university accounts, effectively concealing her purchases and categorizing them as legitimate university-related expenses, her statement said.

Reforms

Bataille emphasized that the university has taken broad steps to prevent financial administrators from repeating Santamaria’s activities, “redoubling [its] efforts to ensure that its financial control system deters and detects potentially fraudulent activity and expenditures.”

Medical Center administrators have also implemented their own set of reforms, many as a result of the ongoing restructuring of the Medical Center approved by the university’s Board of Directors in 2001.

Richard Calderone, chair of the Department of Microbiology and Immunology, said that the creation of the Biomedical Graduate Research Organization, an umbrella structure that includes many of the Medical Center’s academic and research components, has helped ensure financial accountability.

While administrators such as Santamaria were given significant independence in running the financial affairs of individual departments, Calderone said, the new BGRO system has created groups of administrators that supervise two or three departments each. No single administrator can act without the approval of other administrators on multiple levels, he added.

“The system is now optimized. . The person at our level can’t do anything” without approval from the BGRO’s administration, he said. “I think it’s a major strength of the BGRO.”

Under the Medical Center’s current structure, expenditures must go through several tiers of approval, including department heads, financial administrators, and the overall BGRO administration. Even small expenditures must be rigorously accounted for, Calderone said.

“We’re getting calls all the time” from financial officials about minor expenses, he said. “We have checks and balances.”