MANCHESTER, Iowa — A former Manchester hospital CEO accused of misappropriating more than $200,000 was spared prison time during a sentencing hearing Tuesday.
However, Lonnie D. Butikofer, 62, of Manchester, was sentenced in Iowa District Court of Delaware County to two to five years of probation after pleading guilty to first-degree theft.
A 10-year prison sentence was suspended, and he was fined $10,000. If he complies with mandates established by the court, he will not have to serve those 10 years behind bars.
As part of a plea deal, a charge of first-degree fraudulent practices, also a felony, was dismissed.
A tearful Butikofer and his attorney pleaded for a deferred judgment and a suspended fine.
“Regional Medical Center was a huge part of my life for nearly 31 years,” Butikofer said, reading a statement in court. “In the recent few years ... I made some decisions that have and will forever taint my professional and personal life. I disappointed my board and hospital staff. For that not only am I regretful but beg forgiveness.”
County Attorney John W. Bernau recommended a suspended prison term and fine.
Hospital officials, however, petitioned the court for “the maximum penalty and full restitution as a way for our employees and community to move forward.”
“Mr. Butikofer often referred to his philosophy of ‘patient care comes first’ while serving as the CEO at RMC,” said current hospital CEO Charlie Button in a statement read in court. “What we have learned of his actions while serving as CEO that he covered up for many years was far from putting patient care first.”
According to court documents, a member of the information technology department at Regional Medical Center identified “inappropriate emails” in February 2017. An ensuing internal investigation led hospital officials to “question the defendant’s work status on various dates and times.”
The investigation was turned over to the Iowa state auditor’s office. The agency ultimately determined that Butikofer and System Fund and Development Director Michael D. Briggs, 53, of Manchester, had accumulated nearly $280,000 in expenses “not found to be on RMC business,” according to court documents.
Most of the improper disbursements were tied to Butikofer, who was paid more than $256,675 for time spent on personal trips from January 2009 to March 2017, according to a criminal complaint.
Briggs has pleaded not guilty to a charge of first-degree theft in his related case. His next hearing is set for Jan. 21.
Butikofer’s attorney, Mark Liabo, disputes the figures in the auditor’s report and asked for the judge to suspend the fine to allow Butikofer to make full restitution.
A hearing to determine restitution is set for Jan. 21.
“From the hospital’s perspective, I understand the passion,” Liabo said. “I understand the sense of betrayal. ... But I also understand that under Lonnie’s devoted leadership, this hospital grew and prospered and became the largest employer in Delaware County.”
Judge George Stigler, however, said that while Butikofer “lived an exemplary life,” he also “transgressed in a major, major fashion” over an extended period of time.
“I cannot in good conscience give you a deferred judgment,” Stigler said. “You’ve been of great value to the population here in Delaware County. ... But when you make mistake after mistake after mistake over a period of three years or so, I don’t know one can really say that’s out of character.”
Butikofer has 30 days to appeal the sentence. Liabo and Butikofer declined to comment after the hearing.