Wealthy Wichita woman, 78, gets prison sentence for multi-million-dollar embezzlement scheme

A judge on Thursday ordered a wealthy Wichita woman in her seventies to serve four years in federal prison and pay millions in restitution over a decades-long embezzlement scheme that left two local physician-owned businesses that had employed her as a bookkeeper in financial ruin.

Nancy Martin, once a respected community member celebrated for her philanthropy, was allowed to go home with her family after U.S. District Judge Eric Melgren rejected a request from her lawyer for probation and imposed the prison term. But he told the 78-year-old she would have to surrender to a Federal Bureau of Prisons facility on a date to be determined later. It will be Martin’s first incarceration in the case; she was not detained after the thefts were discovered in 2017 or after her 2021 indictment.

Melgren said he would recommend Martin be placed in a federal prison facility with a health center that could address her ongoing medical issues, including lingering effects from a stroke in September. The facility would be located near Atlanta, Georgia, where her son lives, if possible.

Martin also must pay more than $3.2 million in restitution plus interest to the two businesses, Mid-Kansas Wound Specialists and Emergency Services P.A., as well as $670,167 in restitution to the Internal Revenue Service, the judge ruled. Any money collected through an $11 million default judgment that is part of an ongoing civil lawsuit the businesses filed against Martin and her former husband, Tom Martin, in Sedgwick County District Court in 2017 will count toward that amount.

Martin will also be subject to two years of supervised release after she completes the prison sentence.

The four-year prison term is shorter than the 63 months of incarceration sought by the government. Martin’s lawyer asked the judge to order no more than five years of probation or an alternative such as home confinement, arguing that Martin posed no risk to public safety due to her health and age. Melgren acknowledged that while Martin’s health conditions were serious, medical records “don’t paint quite as dire a picture of those (issues) as the defendant has.”

Martin, who pleaded guilty in May to one count each of bank fraud and aid or assist filing a false tax document, sat stoically beside her lawyer when Melgren announced her punishment, which he called “just” and “appropriate to promote respect for the law” for “a serious crime” that went undetected for possibly 20 years or more. Martin’s ex-husband and son, Michael Martin, who asked the judge Thursday to be lenient with his mother, also showed no emotion from their seats in the back of the courtroom gallery.

Moments earlier, two doctors involved with the businesses Martin stole from detailed how her thefts had cost millions, not only in missing cash but also in lost interest and earnings, as well as time with their families. It also cost a lucrative contract with Wesley Medical Center to provide emergency medicine and wound care services because they could no longer bid competitively, they told the judge.

Martin had been a trusted figure at the businesses, working as a business administrator for Emergency Service P.A. for more than 30 years and for Mid-Kansas Wound Specialists for around 20 years, The Eagle previously reported. Her duties included overseeing operations for their physician owners by handling their books, records, payroll, paying bills, writing checks and reconciling their bank accounts.

For years, she was also a well-known philanthropist in Wichita and served on several boards, including for the Wichita State University Foundation and the Wichita Art Museum, The Eagle previously reported.

Learning an employee and friend they had treated “like a mother” had embezzled from the businesses was a “gut punch,” Mark Mosley, a doctor and member of the now-closed Emergency Services P.A., told the judge in court, adding that the full extent of her thefts isn’t clear due to unavailable bank records.

“We know that this is only the tip of the iceberg,” he said.

Francie Ekengren told the judge Martin had helped start her company, Mid-Kansas Wound Specialists, years ago as business manager. When Martin told her there wasn’t enough money in the company accounts to cover expenses, she would work more hours — including while she was being treated for breast cancer in 2010. Still, there never seemed to be enough there, she said.

She was completely unaware that Martin, once a beloved friend, was actually skimming cash from the business.

“She handled all things business and during that time, she was stealing money,” Ekengren told the judge.

The embezzled funds should have paid the physicians and providers Ekengren hired to work — and herself — instead of financing Martin’s lavish lifestyle, she said.

“This has been a very tough situation.”

An audit showed Martin embezzled around $3.1 million between 2012 and 2017 — although the total amount stolen over the more than two decades she was in the businesses’ employ is thought to be much more. Prosecutors have said she used the money to pay for personal expenses, travel, investments and charitable donations and covered her tracks by making false accounting entries in the business’ books. She also filed or had a hand in filing tax returns that omitted income from 2013 to 2016, prosecutors said.

In all, her crimes cost the IRS thousands in lost tax revenue and left the businesses scrambling to make ends meet.

It wasn’t until 2016 that anyone noticed something amiss. One of the businesses received an IRS letter saying its 2014 taxes were being audited, according to statements given in court. Around the same time, Martin asked an accountant to help determine how much she’d stolen — although the judge rejected a suggestion that the timing was a coincidence, saying Martin likely knew “the gig would be up” and “was scrambling to undue a 20-year, more or less, financial fraud.”

Martin repaid nearly $2.2 million, an amount she believed erroneously but “in good faith” was the total stolen over the years, her lawyer said in court.

Eventually she admitted to the businesses that she had embezzled. At least some of the money was taken during a difficult financial time for her family, her lawyer said.

Sitting rather than standing due to what her lawyer said were balance issues and stress, Martin offered a brief apology in court but declined to say more, saying she’d been unable to hear much of the proceeding.

“I am profoundly sorry about all of this, and I have tried to express that,” she said.

But Mosley, the Emergency Services P.A. doctor, was skeptical she felt regret.

“Nancy Martin has had five long years to be remorseful for her actions,” he told the judge, adding that she has “continued to live in gorgeous mansions,” dine at expensive country clubs and travel since her crimes were discovered.

If someone had stolen his car — worth far less than the millions Martin admitted embezzling — they would have spent at least a night in jail by now, he said.

“Nancy Martin is not a broken person,” he said. “ ... Maybe prison is the only place left for her to find remorse.”