Former University Chief of Urology Joseph Oesterling was ordered Monday to serve a yearlong probation, pay a $5,000 fine and fulfill 120 hours of community service for a felony larceny charge, to which he pleaded no contest in June.
Oesterling resigned last week in the wake of an eight-month investigation of his billing practices, which led the University to implement final proceedings to force his dismissal.
Through the investigation into Oesterling's activities, University officials learned that as well as double- and triple-billing the University for travel expenses, Oesterling failed to declare hundreds of thousands of dollars in outside income from industries and private donation, according to documents released by the University under the Freedom of Information Act.
As partial restitution for his debt, Oesterling sent a check to the University for the amount of $105,000 Monday, said Vice President for University Relations Lisa Baker.
"Dr. Oesterling has admitted that this is money he owes to the University," Baker said. "The University of Michigan believes that additional money is owed to us by Dr. Oesterling."
James Montie will continue as interim head of the of the Urology department.
Baker said the University is currently deciding whether or not to file a civil suit against Oesterling.
Oesterling, who has served on the Medical School faculty since 1994, submitted his resignation on Tuesday, July 15 after the University took final steps to terminate his employment.
Oesterling was suspended in March, when University President Lee Bollinger relieved him of all patient responsibilities in reaction to billing discrepancies. The University then, in conjunction with the Department of Public Safety, began an extensive investigation.
In a letter to Bollinger last week, Medical School Interim Dean Lorris Betz said the school had no other choice but to dismiss Oesterling.
"The conclusion I have reached is that Dr. Oesterling's conduct is so egregious and inconsistent with standards expected of faculty of the University of Michigan that termination proceedings must be implemented against him," Betz said.
In the letter, Betz provided a list of offenses calling for Oesterling's dismissal:
-- Unapproved and excessive, outside employment in violation of written University and Medical School requirements.
-- Undisclosed conflicts of interest resulting from dealings with pharmaceutical companies and other non-University entities.
-- Personal profits derived from University resources or efforts.
-- Multiple billing of expenses and falsification of related records.
Documents examined in the investigation, obtained under FOIA, show that Oesterling submitted false documents and receipts to the University.
Bollinger said that Oesterling's practices violate the integrity of the honor system in the Medical Center.
"I don't like to see this sort of thing happen. This is a severe misconduct that is deeply violative of the trust we expect from the members of the faculty," Bollinger said.
Baker said Oesterling was well informed of the rules and regulations for reported travel expenses and billing records.
"The policies for travel and reimbursement at the University of Michigan are very clear," Baker said. "Policies involving issues of conflict of interest are a careful set of well-defined guidelines. These guidelines are provided to faculty when they are hired.
"These policies are widely distributed," Baker said. "We try to continually inform people of their rights and responsibilities. Faculty must follow disclosure each year."
Though Oesterling's salary from the University and Medical Center amounted to about $400,000 a year, he collected additional, substantially large fees through court testimonies, consulting services and business relations.
He frequently received, but did not report, money from pharmaceutical companies and deposited the funds into an account for the National Prostate Research Foundation. No one else at the University knew of the foundation.
The NPRF was one of three Florida-based companies Oesterling established to channel money that he was not reporting to the University. The NPRF, a nonprofit organization created in March, 1996, received thousands of dollars from medical companies. During just a two-month period in 1996, the foundation received $94,108.
Oesterling created two other false companies: Mississippi Valley Enterprises, Inc., a for-profit company created in November, 1994, and O and M (Oesterling and Michigan) Medical Education Association, a nonprofit organization established Aug. 5, 1996. Oesterling deposited his lecturing salary into MVE accounts. O and M was never put into action.
Oesterling said in investigative interviews that he was attempting to stop the spread of a disease that killed his father. He pledged that he has returned all the money he accepted from pharmaceutical companies.
Regent Olivia Maynard (D-Flint) said the entire incident is unfortunate.
"Obviously it's very tragic that someone with such good medical skills got involved and that pulled down his ability to be a good surgeon," Maynard said. "It was really necessary, but it is sad. You don't cheer it on; you just say it needed to happen."