7 face fraud charges over Michigan State healing fund

Seven individuals face arrest warrants from the Ingham County Prosecutor’s Office for 22 counts of fraudulent claims of more than $527,000 in connection with the fund set up to assist victims of pedophile Larry Nassar. 

MSU established the $10 million Healing Assistance Fund in December 2017 as outrage was spreading about Nassar's sexual abuse of athletes under the guise of medical treatment. The fund was intended to provide mental health services for victims and their family members.

In July 2018, the university suspended the fund, saying it had found evidence of fraud that did not involve victims or family members. 

In a press release Wednesday, the MSU Police Department said it had received information about the fraudulent reimbursements in fall 2018. After a review of invoices, officials discovered the fraudulent payments.

"We appreciate MSUPD for being very thorough in its investigation of the reported fraud," university spokeswoman Emily Guerrant said. "The Healing Assistance Fund was established in January 2018 to help survivors access mental health and counseling services, and the university remains committed to providing this support. The Board of Trustees continues to work on finalizing a new fund; in the meantime, the intermediate fund is still available."

The MSU Healing Fund was a source of contention in the months before the departure of former interim MSU President John Engler. 

In December 2018, Engler announced the fund was canceled, saying it had been rolled into the remaining $8.5 million of the historic $500 million settlement negotiated with attorneys for Nassar's victims.

In January 2019, during the first board meeting that ushered in a slate of new MSU trustees, the board directed the administration to resurrect a fund for counseling assistance for victims.

kkozlowski@detroitnews.com