RICHMOND 鈥 A total of five employees have resigned from the Virginia Birth Injury Fund in the past month聽鈥 an exodus that has gutted the small agency鈥檚 finance team as it tries to rebuild after an insider embezzled millions of dollars meant for the families of disabled children.
The latest resignation is that of Kan Cheung, who was hired earlier this year to work as the fund鈥檚 director of finance and investments. Cheung was only hired in April, according to a former employee at the fund who asked to speak on the condition of anonymity.
Cheung heads to the exit door . Johnston, who was presented in a press release as a step toward ensuring the fund鈥檚 financial integrity, left after just 10 weeks on the job.
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Within days of Johnston leaving, another accountant and two claims specialists also resigned.
The fund鈥檚 financial department聽鈥 which oversees a $730 million endowment and handles millions of dollars in medical claims every year聽鈥 is now being run by the fund鈥檚 deputy director, Ronda Holloway, who is simultaneously the fund鈥檚 operations manager, according to the agency鈥檚 website.
The fund is three years behind on financial audits required of it by state law.
Cheung did not return a request for comment. In April, Johnston declined to comment further than confirming that he had resigned.
In a statement through a retained spokesperson, the Virginia Birth Injury Fund said it would not comment on the departures.
鈥淭he resignation of the VBIF Director of Finance and Investments is a personnel matter, and it is not appropriate for VBIF to comment at this time,鈥 said Mark Hubbard, a senior vice president with McGuireWoods Consulting.
鈥淰BIF is working with existing staff and an external financial management provider to maintain best practices and financial protocols as we continue to serve the 300 families in the program,鈥 said Hubbard.
The Birth Injury Fund exists to help a subset of Virginia parents whose children are born with devastating injuries sustained during childbirth, sometimes because of a doctor鈥檚 negligence. It was created in 1987 by the Virginia legislature.
The fund was created at the same time the legislature capped medical malpractice payouts. Legislators decided that brain injuries, which require a lifetime of attention and medical expenses, should be an exception to malpractice fee caps.
Parents primarily rely on the fund to pay for their child鈥檚 around-the-clock nursing care, but also to cover expensive therapies and wheelchairs.
But the relationship between parents and the agency has grown acrimonious since news broke last year that the fund鈥檚 CFO had robbed the agency of $6.7 million.
At a board meeting in March, parents questioned how the fund鈥檚 former financial officer, John Raines, Raines whittled away the funds on gambling expenses, private jets to Las Vegas, and luxury golf carts.
For his transgressions, a federal judge sentenced Raines to nine years imprisonment in March. Raines was the second insider to steal from the agency after another employee previously embezzled from the fund in the 2000s.
At his sentencing, the fund鈥檚 executive director promised reform, announcing new controls and a reimagined finance team that would protect money meant for the children. However, all of those new finance hires have since left the agency.
The fund is overseen by a board of directors appointed by Gov. Glenn Youngkin. Board Chair David Ratz, a personal injury attorney from Newport News, did not return a call seeking comment on Monday. Board Vice-Chair Joel Dillon, who heads a special needs home in Vienna declined to comment on the wave of resignations.
The board will next meet in-person on Tuesday, May 13.
