Bosses’ high-pressure threats caused SC man to start $8 million Medicaid scam, he says

Threats from his bosses to do more work caused a former Medicaid call center manager in Columbia to cook up a scam that stole $8.1 million in federal money from a South Carolina state agency, the manager told a judge before being sentenced to prison.

“I was constantly threatened with the fate of having my division shut down because we were now a ‘Money Losing Unit’ or ‘MLU’ as they would call it,” former call center manager Brian Devanney, 66, of Lexington, said in federal court this week as he told a judge how he fell into a life of crime.

U.S. District Judge Joe Anderson sentenced Devanney on Wednesday to two years in prison. In a separate hearing the same day, Anderson sentenced an accomplice, Richard Kirchner, 71, of New Jersey, to a year and a day in prison. The two men had earlier pleaded guilty to the crime of conspiracy to commit wire fraud. Each must also pay a $50,000 fine.

“In reflection, I wish I would have had the courage to fail. This is my life’s biggest regret,” Devanney told the judge.

“The 40-year career that I was proud of turned to one of deceit when I approved the inflated call data spreadsheets in order to avoid becoming a ‘Money Losing Unit’.”

Officials at Conduent, the national company Devanney and Kirchner worked for, pushed back against Devanney’s allegation that the crime was somehow the company’s fault. “Conduent strongly maintains that these former employees acted entirely on their own, without knowledge, prompting, or pressure from the company,” a statement said.

Both Devanney, who ran the Columbia call center, and Kirchner were eligible for much higher sentences, because of the large amount of money that was stolen.

But Justin Kata — Devanney’s attorney — and Derek Shoemake — Kirchner’s attorney — said in interviews with The State newspaper that several key factors persuaded Anderson to give much lower sentences than otherwise would have been meted out.

For one thing, neither Devanney nor Kirchner profited from the illegal scheme, the attorneys said. All the money went to Conduent, the corporation they worked for. Both are senior citizens, and Kirchner also has cancer and helps take care of eight grandchildren. Both men admitted to the scheme, expressed remorse and cooperated with investigators, they said.

Moreover, the scheme started not out of greed but from Devanney’s desperation to keep his 200-person call center open, the attorneys said. Devanney enlisted Kirchner, who had retired, to come back to work to help him out.

Devanney and Kirchner operated the scam from early 2018 through February 2023, with the two men supplying the state Department of Health and Human Services fake inflated reports.

In 2021, Devanney and Kirchner stole $3.3 million; in 2022, they stole $3.4 million.

Kirchner was essential to the scheme, since he knew how to operate complicated software and spreadsheets to inflate and falsify the numbers, according to federal prosecutors.

Conduent — which received the stolen money and that the two men worked for — is a New Jersey-headquartered business services corporation spun off from Xerox. It had a performance-based contract with the S.C. Department of Health and Human Services, meaning the more Medicaid recipients who contacted the call center for help, the more Conduent got paid.

Conduent provides services to state governments including call center operations and support.

The fraud was easily discovered in spring 2023 when a Conduent official stepped into Devanney’s role when Devanney took an extended leave because of illness. The company fired Devanney, then reported the scam to authorities, according to evidence in the case.

The company has repaid the stolen $8.1 million and a $3 million fine.

In response to an inquiry by The State newspaper, Conduent released the following statement:

“As a result of management review, Conduent found that two then-employees orchestrated a scheme to overstate performance metrics, which led to overbilling” the state.

“Upon discovering this, Conduent immediately self-disclosed the matter to the government, cooperated fully with them and law enforcement agencies, and returned in full the overpayment to” the Department of Health and Human Services.

The company “regrets” the former employees’ actions, the statement said. ”Conduent has implemented additional controls to prevent a similar incident from occurring again.”

The statement also said, “Conduent is committed to responsible stewardship of government funds used to provide services for those in need.”

The South Carolina U.S. Attorney’s office praised Conduent for taking “significant steps” to cooperate with the government in its investigation.

The prosecutor in the case was assistant U.S. Attorney Lothrop Morris.

This story was originally published March 21, 2025 at 1:50 PM.