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Former Hacienda HealthCare CEO sentenced to probation for fraud scheme

William J. Timmons will spend three years on probation and must pay $774,000 in restitution.

PHOENIX — Editor's Note: The video is from an earlier broadcast.

William J. Timmons, the former CEO of Hacienda HealthCare, has been sentenced to three years of supervised probation after pleading guilty to fraud.

While overseeing Hacienda between 2013 and 2018, Timmons misallocated funds from the state health care system and manipulated the facility's expenses. 

The fraud was discovered shortly after a Hacienda patient gave birth to a child allegedly fathered by Nathan Sutherland, one of the facility's licensed practical nurses. The patient was in a vegetative state at the time of the birth and has significant intellectual disabilities. 

Timmons resigned from Hacienda shortly after the scandal surfaced in January 2019. 

Last September, Timmons and Joseph O'Malley, Hacienda's chief financial officer, were indicted for a white-collar fraud scheme. 

Prosecutors accused the two of misusing state funds and failing to reimburse Arizona for costs that should have been repaid. Timmons plead guilty in June to two counts of fraud.

As part of his plea agreement, Timmons must pay $774,500 in restitution to the state.

O'Malley's criminal case is still being litigated in court. 

Hacienda HealthCare has previously made an agreement with the state to pay $11 million to resolve a criminal case filed by Arizona Attorney General Mark Brnovich. 

Sutherland, the 36-year-old nurse accused of impregnating the Hacienda patient, was arrested by Phoenix police shortly after a DNA test allegedly showed he fathered the woman's child. 

RELATED: 'Hacienda could happen today': Almost 2 years after Hacienda Healthcare arrest, what's changed?

ALSO: Former Hacienda Healthcare executives indicted, company to pay $11 million to Arizona

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