New developments in a 2015 KRQE News 13 Investigation

TAOS, N.M. (KRQE) – It was January 2015. A blinding snowstorm nearly obscured the office of a small northern New Mexico health care agency. Outside Tri-County Community Services it was peaceful, even serene. But inside it was a crime scene.

Read: Stipulated Settlement Agreement »

Tri-County provides mental health and substance abuse counseling to clients in Taos, Colfax and Union counties. But it was not counseling that caught our attention.

Last year, a KRQE News 13’s investigation found the Taos-based non-profit agency was secretly stealing from its own employees. Faced with stacks of unpaid bills, Tri-County administrators looted cash from the payroll accounts of staff members, leaving them without health insurance. Some employees were stuck with thousands of dollars in unpaid medical bills.

In our report last year, KRQE New 13 told you about Tri-County Counselor Susan Warner. Susan had just undergone total bi-lateral knee replacement.

“I’ve incurred considerable medical bills. I believe the hospital bill is approximately $70,000,” Warner told KRQE News 13 last year.

Even though Blue Cross Blue Shield authorized all of her medical treatments, Susan Warner was shocked to find the agency’s health insurance policy had quietly been canceled because Tri-County had failed to pay the insurance premiums. Warner was stuck with more than $100,000 in medical bills.

“Can I cry now,” a visibly shaken Warner said at the time. “I can’t pay it. I don’t have any money to pay this,” Susan Warner said.

According to a three-month long KRQE News 13 investigation, employee payroll deductions designated for health insurance were diverted by Tri-County’s administrators and spent elsewhere. It was only after Blue Cross Blue Shield denied medical claims that employees discovered their insurance money had been stolen.

One Tri-County employee told KRQE News 13 last year, “I don’t even have words for it. These are people we trusted with our money. What a shock.”

At the time of our investigation, Kim Hamstra was Tri-County’s CEO. In an interview with KRQE News 13 Hamstra said nobody told her the diversion of employee benefit money was illegal. However, she admitted taking money that did not belong to her, “which is why we are paying them back,” Hamstra said in January 2015.

Taos businessman Larry Mapes was President of Tri-County’s Board of Directors. KRQE News 13 asked Mapes whether anybody looking at what’s happened there would call that embezzlement?

“Ultimately I guess that’s how it would have to be interpreted,” Mapes said last year.

Following our investigation, Kim Hamstra was fired along with Chief Financial Officer Vera Tovino. Larry Mapes and the other Tri-County Board of Directors were ousted. New Mexico Insurance Superintendent Franchini launched a state investigation.

“When Tri-County takes money out of a health insurance plan, retirement plan or any benefit plan the employee has signed up for that is stealing money from the employee. It’s actually a criminal offense,” Franchini said.

In September, the Insurance Superintendent concluded the Tri-County investigation and issued a Stipulated Settlement Agreement. In the signed agreement, Tri-County admits it broke the law by diverting employee health insurance premiums. Insurance Department Investigators found the non-profit was ‘grossly mismanaged’ and that its previous Board of Directors failed to provide oversight. Tri-County was placed on two years’ probation. A $5000 fine was suspended due to the mental health agency’s fragile financial condition.

“We have the power to go in and say ‘you’ve stolen this money, we’re going to close you down, take whatever money is left and you’re out of business’,” Insurance Superintendent Franchini said. “We could have done that. But if we had then we would have eliminated an organization that is vital in at least three counties in New Mexico.”

Fr. Mike Olsen, the Rector of St. James Episcopal Church in Taos is the newly named President of Tri-County’s Board of Directors.

“The staff as you would imagine felt betrayed. And not only felt betrayed, the staff was betrayed,” Father Olsen told KRQE News 13 last month.

Commenting on Tri-County’s troubled past, Father Olsen said, “They took the organization to a point we should not have survived. For all practical purposes, we should have declared bankruptcy. But because of the mission of this agency and the support of our staff we just could not allow that to happen.”

Fr. Olsen says Tri-County’s new Board has reorganized and is providing financial oversight. He adds, the non-profit agency has paid all outstanding medical claims filed by employees. Olsen says the Board hopes to reinstate employee health insurance coverage next year.

As part of the agency’s administrative reorganization, Sue Mulvaney was named Tri-County’s Chief Executive Officer. Mulvaney told KRQE News 13 she has a message for Tri-County’s dedicated staff.

“I want them to know that they are our number one priority, along with the clients and that we are doing everything to create a system where what happened to them before won’t happen again. Ever,” Mulvaney says.

“We are Phoenix,” Fr. Olsen says. “We have risen from the ashes. We are here. We’re loving our clients and we will survive. The mistakes of the past are there. Those mistakes will not be repeated. And I’m even more optimistic today than I was two months ago we’re going to make it.”