John Paul Funes

Our Lady of the Lake Foundation CEO John Paul Funes.

Baton Rouge law enforcement took its first steps Wednesday to investigate allegations that the head of the fundraising arm of the state’s largest private medical center diverted several hundred thousand dollars in what administrators describe as “a pattern of forgery and embezzlement of funds.”

John Paul Funes was fired late Tuesday from his $283,000 a year job as president and chief executive officer of Our Lady of the Lake Foundation after auditors found questionable expenditures using foundation money.

A few hours prior to its 160-word Election Day announcement, Our Lady of the Lake Regional Medical Center CEO Scott Wester met with 19th Judicial District Attorney Hillar Moore III, of Baton Rouge. Wester described three alleged types of activities in which foundation money was diverted to unauthorized expenditures, Moore said. Moore wouldn’t detail the activities further but said “several hundreds of thousands” of dollars were involved.

Moore and detectives with the East Baton Rouge Parish Sheriff’s Office financial crimes unit are scheduled to meet with Lake officials next week. Investigators will then receive the financial documentation necessary to launch a criminal investigation, Moore said.

“We’ll let the evidence direct the investigation,” Moore told The Advocate on Wednesday. “We haven’t seen a document yet.”

Moore said the investigation could be lengthy, and any decision to prosecute would be dependent on what law enforcement finds. “It’ll take some time because we’re talking about years of financial documents,” Moore said.

Funes has not been charged or even interviewed by law enforcement. He retained Walt Green, a former U.S. attorney who now defends people accused of white-collar crimes.

When reached by The Advocate, Funes declined to comment.

Lake Hospital staff came across the questionable expenditures a few weeks ago during a routine review of finances, dug deeper into the expenditures, then decided to hire accountants to take an independent look.

When asked specific questions about the allegations raised in its termination of Funes, Our Lady of the Lake released a statement Wednesday saying it was limited in what could be disclosed because of the criminal investigation.

“What we can say is that we received information from our compliance program that began an investigation that concluded Mr. Funes falsified documents and embezzled funds on multiple occasions for personal gain. We have engaged Deloitte, a leading third-party financial audit firm, to evaluate the safeguards we have in place, so we can protect our ministry,” the statement said.

The Lake is part of the Franciscan Missionaries of Our Lady Health System.

Two of the 15 board members, speaking on condition of anonymity, said they were given only the briefest of outlines by hospital administrators Monday. They expected to receive more details Friday.

Funes was in charge of raising money for the hospital system. An event called Black Tie Bingo is scheduled for Nov. 28 at L’Auberge Casino & Hotel to benefit the new Our Lady of the Lake Children’s Hospital. It will include live entertainment, a three-course dinner and four games of bingo.

The Our Lady of the Lake Foundation is the nonprofit fundraising arm that supports Our Lady of the Lake Regional Medical Center and reported to the Internal Revenue Service total assets exceeding $42 million at the end of 2017.

“While our investigation remains ongoing,” Wednesday’s statement by the Lake said, “it’s important to know every dollar will be restored and we will seek restitution from Mr. Funes. This will not impact our operations or the mission of Our Lady of the Lake or the Foundation.”

Follow Mark Ballard on Twitter, @MarkBallardCnb.