Former Wenatchee Health Care Executive Pleads Guilty to Wire Fraud, Agrees to $24.4 Million in Restitution

A former Wenatchee health care executive has pleaded guilty to a federal wire fraud charge and agreed to a restitution order of more than $24 million, according to records filed in U.S. District Court for the Eastern District of Washington.

Patrick Alan Bucknum entered the plea on June 24 before U.S. District Judge Thomas O. Rice in Spokane. 

Rice accepted the plea as knowing and voluntary, ordered a presentence investigation report and set sentencing for Sept. 23 at 10:30 a.m. 

Bucknum was not in custody, and Rice ordered him to stay on pretrial release.

Bucknum waived his right to a grand jury indictment and pleaded guilty to a single count filed in an Information. We reported the charge in May.

What he admitted

Community Clinic Network, or CCN, was formed in Wenatchee in 2010 to manage health care payment contracts for clinics across Washington, according to the plea agreement. 

Its contracts with Medicaid managed care organizations shifted financial risk to CCN when costs ran above a baseline and paid it for savings below. Owner clinics generally left large balances in CCN's custody as reserves.

Bucknum managed CCN's finances from 2010 through 2016 while working full time as chief executive of Columbia Valley Community Health. 

He moved to CCN full time in 2017 as chief executive and also served as its chief financial officer and chief operations officer until he left in 2024. 

The agreement makes no allegation of misconduct at Columbia Valley Community Health.

Beginning in or about April 2017, according to the stipulated facts, Bucknum moved money out of CCN's accounts into his personal E*TRADE account and traded stocks, options and exchange-traded funds. 

He had no prior experience trading any of them. 

His strategy was influenced by social media and was generally bearish and highly leveraged. He intended to profit, return the money and keep the difference.

Between 2017 and 2023 he took roughly $30.39 million and returned roughly $7.36 million, a net loss to CCN of about $23 million on the money moved to the brokerage account. 

With personal purchases included, the parties stipulated a total loss of $24,368,427.37.

To hide the transfers, the agreement says, Bucknum voided checks in CCN's accounting system, electronically altered bank statements, and moved money from CCN's insured cash sweep savings account into its checking account so the checking balance appeared steady, knowing the board was more likely to review the checking account than the savings account.

The agreement also details purchases traced to CCN funds: a 2021 Tesla Model 3 for $77,925.51; a Cobalt 220 boat and trailer for $33,004.59; and a 2024 Chevrolet Silverado EV for $103,800.75, an entry he later relabeled in CCN's books as "CDW Server Upgrades." 

The single count is dated on or about Aug. 16, 2024, when the agreement says Bucknum moved $1,199,210.57 of CCN money by interstate wire to buy gold coins.

By 2019, Bucknum viewed the losses as insurmountable and met with an attorney but decided not to come forward, the agreement states. 

In March 2023 he moved another $5 million into the brokerage account in a final attempt to recover the losses. It failed. 

He resigned through counsel on Oct. 7, 2024, admitting in his resignation that he had embezzled and lost about $20 million.

What comes next

Wire fraud carries up to 20 years in prison, up to three years of supervised release, a fine of up to $250,000, restitution and a $100 special assessment.

The parties agreed to some guideline calculations, including a 20-level increase for a loss between $9.5 million and $25 million and a 2-level increase for abusing a position of trust. 

They did not agree on other adjustments, and the court will calculate the range after probation officers file their report. 

Prosecutors agreed to recommend no more than the low end of the range as they calculate it, and, if he meets the agreement's conditions, to support a reduction for acceptance of responsibility. He may argue for any lawful sentence. 

Both sides will recommend three years of supervised release. The judge is not bound by any of it.

Bucknum also agreed to a forfeiture money judgment of $24,368,427.37 and to give up the Tesla, the Silverado, the boat and trailer, funds in a Chase account, and 400 American Gold Eagle coins, 70 platinum coins and 66 American Silver Eagle coins. 

Assistant U.S. Attorney Jeremy J. Kelley is prosecuting. Bucknum is represented by Keith M. Woodwell and Jake Taylor.