Prominent Wichita woman who embezzled millions from two businesses pleads guilty
A prominent Wichita woman who stole millions from two physician-owned businesses she kept books for has pleaded guilty to federal charges, according to a news release from the United State Attorney’s Office for the District of Kansas.
Nancy Martin, 77, pleaded guilty on Tuesday to one count of bank fraud and one count of aid or assist filing a false tax document, federal court records show. She faces up to 30 years in prison for fraud and up to three years in prison on the aid or assist count. She is scheduled for sentencing Aug. 17.
In her plea, she admitted to defrauding Mid-Kansas Wound Specialists and Emergency Services P.A. while she worked as their bookkeeper, business manager and chief operating officer, the news release says. An audit showed she embezzled around $3.1 million from 2012 to 2017 through fraudulent means from the business’ banks.
Martin used the stolen cash to pay for personal expenses, travel and investments, the news release says. She hid the thefts by making false accounting entries in the business’ books “to disguise the embezzlement as payments or transferred funds between entities,” according to the U.S. Attorney’s Office.
She then either filed tax returns or contributed to filing tax returns to the Internal Revenue Service “that omitted income,” causing a tax loss to the government agency of approximately $670,000, the release says.
Mid-Kansas Wound Specialists and Emergency Services P.A. were physician-owned professional associations that provided emergency medicine or wound care services at Wichita’s Wesley Medical Center at the time the embezzlement was discovered.
The businesses turned around and sued Martin; her husband, businessman Thomas A. Martin; and 11 of their limited liability corporations in civil court in 2017, alleging Martin stole more than $4 million “on a regular and systematic basis” between 2006 and 2017 “to main an extravagant lifestyle that they could not otherwise afford.” Among allegations were that the couple used the stolen money to fund their own business, buy real estate and other assets, and buy goods at high-end department stores like Neiman Marcus and Saks Fifth Avenue. They gave some of it to charity, the lawsuit alleges.
Martin had been a trusted figure for the businesses, working as a business administrator for Emergency Service P.A. for more than 30 years and for Mid-Kansas Wound Specialists for around 20 years. Her duties included overseeing operations for their physician owners by handling their books, records, payroll, paying bills, writing checks and reconciling their bank accounts, The Eagle reported in a 2017 article about the lawsuit.
Martin was also a well known philanthropist; she served on the Wichita State University Foundation board and the university’s National Advisory Council, the Wichita Art Museum board, and the University of Kansas Endowment 4-Wichita board, which raises money for the KU School of Medicine-Wichita.
In August 2018, a Sedgwick County judge awarded the two physician-owned businesses a more than $11 million default judgment against Martin after she stopped answering court filings in the civil lawsuit and refused to show up for hearings, The Eagle previously reported.
But Martin wasn’t criminally charged over the thefts for more than three years after her misconduct surfaced. Court records show she was indicted on five counts in March 2021. Three of the counts were dismissed in exchange for her guilty plea, according to her plea agreement.
The agreement also says Martin will pay $670,167 in restitution to the IRS plus more to the businesses.
This story was originally published May 26, 2022 at 4:55 PM.
