Clinic featured on 'Queer Eye' defrauded Austin Public Health, city auditor says
A new report from Austin’s Office of the City Auditor found a nonprofit defrauded Austin Public Health in the amount of $417,000 during contracts related to COVID-19 response.
The organization in question, the Central Texas Allied Health Institute (CTAHI), gained public attention in 2021 when it was featured on Netflix’s Queer Eye, a show in which a cast known as the Fab Five gives people lifestyle makeovers and sometimes offers support to their businesses and community causes.
The Office of the City Auditor released a report Thursday investigating CTAHI, leveling evidence that the nonprofit falsified documents to misrepresent more than $1.1 million in financial transactions. These activities resulted in the improper payment of $417,000 to CTAHI by APH, per the report.
Jereka Thomas-Hockaday co-founded CTAHI as a medical training school in 2019, with the goal of helping people from underrepresented backgrounds establish medical careers. During the pandemic, it expanded to add a COVID-19 clinic in East Austin. It received three contracts from APH to coordinate COVID-19 testing, vaccinations and related workforce training.
The clinic’s break room was renovated on the Queer Eye episode called “Community Allied,” which focused on Thomas-Hockaday’s work through CTAHI to offer testing and vaccines to low-income and minority communities.
“Most of these [patients] are people of color,” Thomas-Hockaday told KUT in 2022 following the show’s airing. “They’ve told us that they’re comfortable with coming to us. I have people who come all the time now to get tested because they know us, they trust us.”
However, in October 2021, APH brought concerns to the Office of the City Auditor that CTAHI may have falsified financial documents in the course of submitting contract claims to the public health agency.
The city auditor’s investigation found evidence that CTAHI overstated the number of people it served with vaccinations by 20-30% compared to state immunization data, patient forms and other records. This discrepancy is traced to a single day: CTAHI told APH that it administered over 1,000 vaccines on June 5, 2021, but only 59 patient forms exist for that date.
Additionally, the report shows evidence that 11 out of 22 contract claims submitted to the city include expenses that were falsified by editing prices and dates on receipts and invoices, with matching changes made to bank statements and business ledger entries. Doctored expenses identified in the report include around $362,000 in medical supply purchases from a company in Houston, as well as “costs for IT equipment, payroll, security services, rented lab space and childcare.”
While the auditor investigation traces some of the documents to Thomas-Hockaday, others are thought to be produced and submitted by Todd Hamilton, CTAHI’s campus president. The auditor identified Hamilton to have been largely responsible for handling the nonprofit’s financial operations prior to the hire of an official bookkeeper. He was also investigated for allegedly embezzling from CTAHI, although the auditor’s office was unable to confirm these allegations.
In a joint statement, Hamilton and Thomas-Hockaday denied engaging in any fraudulent activity.
“There is a long-documented history of the City of Austin having difficulties working with small minority contractors and then blaming the failures in execution on the contractors themselves,” Thomas-Hockaday said. “I was told by numerous peers who had worked with the city before to not take this contract, but I naively thought I could make a difference because of the pandemic. I will never do business with the City of Austin ever again.”
The report also said the matter had been referred to the Austin Police Department “due to the potentially criminal nature of CTAHI’s actions.”
Brandon Jones, a communications manager for APD, confirmed that an independent investigation is ongoing.
Brian Molloy, chief of investigations for the Office of the City Auditor, said that following the investigation into CTAHI, the office is developing a testing protocol to identify other potential abuses of COVID-19 contract funding. He noted that the Department of Justice has identified more than $1 billion in pandemic fraud across the United States.
“If the problem is that big across the nation, Austin is going to be no different,” he told KUT. “There are going to be other people who took advantage of this situation and that influx of funds. ... So I'm sure CTAHI isn't the only [organization] who misused some of that funding.”
The report notes shortcomings in APH's oversight of contracts like the one it held with CTAHI, although it commended the agency for reporting its concerns. Molloy said he believed APH had initiated steps to improve its oversight, and recommended hiring more contract monitors to alleviate the workload of overburdened staff members.