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MADISON - Attorney General J.B. Van Hollen announced today that an Illinois woman has been convicted in Milwaukee County Circuit Court of theft and neglect of residents at the former Havenwood Nursing and Rehabilitation Center.


Van Hollen said that Karen Mason, 55, of Chicago, Illinois, appeared before Judge Dennis Moroney and pleaded no contest to two counts of felony theft and one count of neglect of residents likely to cause great bodily harm.


According to the Department of Justice's (DOJ) criminal complaint, Karen Mason was the Chief Operating Officer and Administrator of Havenwood Nursing and Rehabilitation Center located on West Highland Boulevard, Milwaukee. Mason was an authorized signatory for a number of Havenwood's bank accounts including the Havenwood Resident Trust Fund (RTF) checking account. The RTF account was established for the facility residents to use to pay for personal expenses such as insurance, cable television bills, and hair care. The money in the account consisted of money from the residents or their related parties, Social Security and Supplemental Security Income (SSI). The complaint alleges that between January 2002 and March 2005, the bank statements and the facility records for the account did not match. At one point the difference between the balance statements was $68,000. The RTF account was supposed to be used exclusively for the benefit of the residents. The RTF records showed that the amounts that should have been properly maintained in the bank account were used for Mason's personal expenses.


An investigator for the U.S. Department of Labor, Employee Benefits Security Administration, investigated complaints by employees that money had not been deposited into their 401(k) accounts even though the money had been deducted from their paychecks.


The complaint also alleges that equipment necessary for residents' physical therapy rehabilitation was not being delivered by vendors due to non-payment or insufficient funds in the Havenwood bank account when paid by check. Also due to the deteriorating financial condition of the facility, call lights went unanswered for long periods of time due to lack of staffing and there were insufficient supplies such as towels and blankets.

Sentencing has been set for May 9, 2008. Mason faces 23 and a half years imprisonment and fines of up to $60,000.


The case was investigated by the DOJ's Medicaid Fraud Control Unit in conjunction with the U.S. Department of Labor, Employee Benefits Security Administration.