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Lexington man faces fraud charges in nursing home case

A Lexington man who is the former administrator of a Western Kentucky nursing home is facing 55 years in federal prison for cashing retirement payments for a resident who had been dead for nearly a decade.

Harold Lee Steele Jr., 49, pleaded guilty in June to charges of mail fraud, bank fraud and submitting false statements, according to federal court records.

Steele is scheduled to appear for sentencing Sept. 7 in U.S. District Court in Louisville.

Patrick Bouldin, identified in court records as Steele's attorney, did not return a telephone call asking for comment.

Steele was employed as a nursing home administrator for Poplar Grove Rest Home in Muhlenberg County. His mother and uncle owned the facility, according to a plea agreement filed in June in U.S. District Court in Owensboro.

In September 1998, Rose Young, one of the residents of the facility, died. Steele failed to notify the federal Office of Personnel Management, or OPM, that Young, one of its annuitants, had died. Steele continued to cash Young's checks as if she were a resident in the facility.

In 2006, Steele completed a form that indicated that Young was unable to sign for herself but that the benefits should continue. In 2008, OPM discovered that Steele continued to cash Young's checks despite her death.

"Steele was contacted and he admitted to cashing the checks, although he said he did not intend to commit fraud," said the plea agreement. "He indicated he would pay the money back but never did."

Steele cashed more than $25,000 in checks that were for the care of Young, according to the U.S. attorney's office.

The maximum potential penalty is 55 years in prison, a $2.2 million fine and supervised release for up to five years.

The case was investigated by the Secret Service and OPM's inspector general.

Edmund Byrnes, a spokesman for OPM, said the agency was taking steps to make sure a similar fraud does not happen again.

"We do thorough investigations when these things are brought to light," Byrnes said. "We are always reviewing our processes. ... We make sure that federal employees and the taxpayer aren't being cheated."

The nursing home closed in June 2008, according to Beth Fisher, a spokeswoman for the Kentucky Cabinet for Health and Family Services, which oversees nursing homes.

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