Insurer sues woman who stole money from Mercy Medical Center Merced: Company seeks more than $500,000 from former worker. [Merced Sun-Star, Calif.]

Mar. 6--The insurance company backing Mercy Medical Center is seeking to recoup nearly $600,000 a local woman embezzled from the facility between 2001 and 2008.

Federal Insurance Co., which provides insurance to Mercy Medical Center and its parent company Catholic Healthcare West, filed a civil lawsuit against Deborah Ann Morton in February seeking restitution for the $581,747 she embezzled from Mercy.

The former medical staff director for Mercy pleaded no contest to felony embezzlement charges and was sentenced to four years in prison in April 2009. The Sun-Star was unable to verify if she is still in custody.

Morton wrote checks to pay her mortgage, credit card bills, car payments and other expenses on a medical staff account she governed at the hospital. She forged the names of signatories on the account.

As part of Mercy's insurance plan, Federal Insurance Co. reimbursed the hospital $331,747, after the hospital's $250,000 deductible.

The court ordered Morton to pay restitution in the case, but according to California law, an indirect third party such as an insurance company cannot recoup its losses directly from a defendant, said Joseph Tabrisky, attorney for Federal. This necessitates a separate lawsuit such as the one Federal Insurance Co. filed.

Federal will now pursue the full amount Morton took and reimburse Mercy its $250,000 deductible if and when the money is recovered. Federal's lawsuit notes that to date the company has recovered no money from Morton.

Reporter Amy Starnes can be reached at (209) 385-2453 or [email protected].

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