Former Shriners Hospital CFO Robert Steven Brodzin Stole $828K From Special Needs Children Fund

August 25, 2008

Robert Steven Brodzin pled guilty to a scheme to defraud Shriners Hospital for Children of more than $828,000.

“Stealing money that was meant for special needs children to fund an excessive luxury life style is one of the most egregious type of fraud schemes,” said Hanaway. “Shriners is a great organization that Brodzin took advantage of using his position of trust as CFO. Brodzin’s crime should not stand in the way of future public support for Shriners given the important and vital work they do here and elsewhere. Shriners has cooperated with the Government’s investigation and strengthened its financial controls after learning of Brodzin’s crimes. Shriners will continue to play a vital role in this community.”

From October 30, 2000, through May 2, 2008, Brodzin, a certified public accountant, was the Director of Fiscal Services for Shriners Hospital for Children – St. Louis. When the thefts occurred during 2004-2008, Brodzin’s job duties included the processing of invoices that Shriners received from assorted legitimate vendors. Generally, as part of his job duties, Brodzin prepared checks and presented them to his supervisors at Shriners for approval, signature and ultimately payment to Shriners’ vendors

As part of his scheme to defraud, Brodzin created three “dummy” companies: West County Orthopedic Supply, West County Surgical and BEI Systems, Inc. None of these companies ever actually provided any goods or services to Shriners. To implement his scheme to defraud, Brodzin used his position as CFO at Shriners to establish these three “dummy” companies as qualified vendors of Shriners, and then obtained unauthorized payments from Shriners by presenting checks for approval and payment in these three companies’ names. With his plea, Brodzin admitted that he lied to Shriners’ management team and Board of Directors by telling them that certain checks and payments for these companies were for legitimate hospital expenses. Brodzin further admitted to secretly obtaining and using an unauthorized Shriners’ credit card for his personal expenses.

Brodzin used the stolen money from Shriners to buy luxury automobiles; a condominium in St. Petersburg, Florida; vacation travel and related expenses in Las Vegas, Nevada, and other locations; golf and health club memberships; season tickets for the games of assorted professional sports teams in St. Louis, Missouri, and also to fund his personal small business opportunities.

“The FBI will continue to aggressively pursue corporate insiders who abuse their positions of trust for personal gain. Mr. Brodzin victimized Shriners Hospital and the children and families it serves. However, it is reassuring to know that Shriners will continue to provide medical care to the children who need it the most. I would like to thank Frontenac Chief of Police Tom Becker and his staff for their assistance and cooperation in this matter,” said John Gillies, Special Agent in Charge, FBI St. Louis.

ROBERT STEVEN BRODZIN, O’Fallon, Missouri, pled guilty to one felony count of mail fraud. He appeared before United States District Judge Catherine D. Perry. He now faces a maximum penalty of 20 years in prison and/or fines up to $250,000 when he is sentenced on November 7, 2008. Additionally, as part of his plea, Brodzin will make restitution of $828,973 to Shriners.

Hanaway commended the work performed on the case by the Federal Bureau of Investigation and the Frontenac Police Department.