"Handicapped" by a lengthy FBI investigation, Olmsted County prosecutors are working on a plea deal with a former Mayo Clinic employee accused of stealing $172,000 in cash from the clinic in 2016 and 2015.
Timothy Stafford, 47, is accused of taking the cash during his time as the parking and transportation supervisor in charge of Mayo Clinic’s parking lots and ramps. He was charged with 10 felony charges in February.
On Tuesday, he appeared in Olmsted County District Court, where his attorney, Gary Gittus, entered a not guilty plea for his client. Gittus then told Judge Kathy M. Wallace that a plea deal was being negotiated.
"It does involve restitution to be paid over a sufficiently long period of time," Gittus told the judge. It's unclear to what charges Stafford might plead guilty.
A plea hearing was set for Aug. 30.
The case has an unusual history that made it "challenging," Olmsted County Attorney Mark Ostrem said. Following tips from his co-workers, Mayo Clinic started investigating Stafford in early 2016. Money was found to be missing from Mayo Clinic’s parking department between September 2015 and March 2016,
Investigators found shortages in 2015 of $49,122.02 for September, $52,452.69 for October, $40,411.98 in November and $19,688.31 in December. While no shortages were discovered in January and February of 2016, a shortage of $9,447.96 was found in March 2016.
While Stafford denied all wrongdoing, Mayo Clinic fired him on April 12, 2016. Instead of reaching out to local law enforcement, Mayo Clinic turned the case over to the FBI. Stafford was not arrested and remained living free in Rochester.
“Mayo Clinic reported the case to the FBI in 2016 because the situation constituted a significant diversion of assets and because Mr. Stafford could have been a person of interest to federal investigators," wrote Mayo Clinic representative Duska Anastasijevic in response to questions about why the case was handled as it was. "Mayo Clinic did not also report the theft to local law enforcement because the FBI was actively investigating."
The FBI said it investigated the case for more than two years. In the end, no charges were filed by Minnesota’s U.S. Attorney. No reason was given. The case was then dropped on Rochester police in late 2018.
"There were about two years there that were completely lost to us … It has handicapped us a lot," Ostrem said. "There is also the nature of how and when it was taken. It's kind of a mess."
Ostrem said there are concerns about the statute of limitations regarding the theft charges. While it was originally said that Stafford could face a maximum penalty of 20 years in prison, Ostrem said Stafford might not serve any prison time.
"It's been quite a challenge," Ostrem said.
A lot of cash
During the investigation, Stafford was found to have made a number of cash purchases during the time of the alleged thefts, despite recently filing for bankruptcy and paying child support.
He purchased a five-bedroom home in Rochester for $407,000 in 2017 and made a $70,000 down payment.
Investigators found “… he and his wife own 18 vehicles or trailers that require registration in the State of Minnesota.” That includes a Gulf Stream motor home and an $80,000 camper trailer. The couple leased a new Chevrolet pickup.
Special Agent Glenn Moule of the FBI is listed in the criminal complaint as talking to person who built a garage for Stafford in 2015 for $15,000. When the builder asked for a check for payment, Stafford reportedly said, "You will get cash or you will get nothing," according to the complaint. Moule also reported that Stafford purchased a boat in September 2015 for $26,000 and he paid in cash.
It is unusual for Mayo Clinic to discuss a theft by an employee. In this instance, clinic officials reported a theft of $300,000 or more to the IRS in an annual filing. The IRS had asked about any “significant diversion” of assets. Any amount of $250,000 or more is considered “significant” in this context by the IRS.
Why the difference between Mayo Clinic’s estimate of $300,000 and the $172,000 identified by Rochester police?
“The amount reported as stolen in Mayo’s tax filings was the full amount of the theft validated by Mayo through investigation and analysis," Anastasijevic wrote early this year. "Please note that Mayo is continuing to cooperate with local law enforcement and the county attorney, as we understand this to be an ongoing investigation."