PITTSBURGH — Defense attorneys for a Center Township couple accused of bilking Butler Health System of up to $1.3 million attempted to poke holes in the prosecution's case during the second day of testimony in federal court Tuesday.

Among those called to the stand was Butler Health System CEO Ken DeFurio who told the court about when he discovered “something was wrong” with the health system's finances.

Scott and Stephanie Roskovski pleaded guilty May 28, 2020, to various federal charges related to defrauding BHS during Stephanie Roskovski's employment there as chief operating officer.

Proceedings began Monday to determine how much restitution the couple owes BHS.

Prosecutors argue the couple should repay $1.3 million. The defense says the amount is closer to $600,000.

The fraud occurred between 2011 and 2017.

Attorneys Stephen Stallings for Scott, and Robert Ridge for Stephanie, turned the daylong hearing into an attack on evidence that prosecutors collected.Scott Roskovski pleaded guilty to federal charges of filing a false loan application and false income tax return. Stephanie Roskovski pleaded guilty to mail fraud and filing a false income tax return.As part of the plea deal, all other charges in the original 42-count indictment filed in April 2019 were dropped.On Monday, U.S. Postal Service Inspector David Gealey explained how evidence was collected during a multi-agency fraud investigation into the Roskovskis.Gealey returned to the stand Tuesday, providing the defense attorneys a chance to cross-examine him.Later in the afternoon, DeFurio also testified, and at one point Judge William Stickman IV had to remind DeFurio and Ridge to take turns speaking instead of shouting over each other.Leading up to this week, Scott Roskovski filed several motions to withdraw his guilty plea, but Stickman rejected all attempts to do so.And on Tuesday, Stallings seemed to be reviving that line of argument as he questioned Gealey on the investigation.Stallings noted that all charges in the case have one victim, BHS. But Scott Roskovski never worked at the health system.

Stallings also noted that much of the evidence used against the couple involved lavish items that a person such as Stephanie Roskovski could enjoy with her $450,000 annual salary.Stallings argued there is no evidence “that Scott knew how these things were being paid for nor about BHS's reimbursement of those things.”“At that highest level of compensation, it would permit her to legitimately enjoy expensive trips, concerts, expensive home furnishings and such,” Stallings said, pointing out that none of these items would have made Scott Roskovski suspicious.He also argued that some of Stephanie Roskovski's expenses were legitimate costs of doing business for a high-profile employee. But through it all, he argued that Scott Roskovski was not involved in defrauding the health system.At several points Assistant U.S. Attorney Carolyn J. Bloch, prosecuting the case, objected.“Scott already pleaded guilty,” Bloch said. “We're not litigating the issue.”Stickman noted her objection but denied it. At several points during the day, he reminded both sides that this week's hearings are meant to settle the restitution question.

Like the underlying indictment, Gealey on Monday outlined Stephanie Roskovski's main methods of defrauding money from the system.One technique, Gealey said, was to present expense invoices to DeFurio for items such as “physician recruitment” for his signature and approval.Once she obtained the signature, she would alter the dollar amount on the invoice by adding zeros to the end of the figure, Gealey testified.By doing this, for example, she was able to turn $500 into $5,000. And she would present the altered invoice to accounting for reimbursement.Stephanie would also use the company's credit card for personal use but presented it as business expenses, Gealey testified.Gealey testified Monday that one of Stephanie Roskovski's methods of defrauding her former employer was through false disbursement requests. Under the guise of things such as “physician recruitment,” she would get the health system to pay her sometimes thousands of dollars for her own personal gain.Stallings asked Gealey on Tuesday if Scott Roskovski ever saw any of these disbursement requests. Gealey said no.Picking up on Monday's reference to a Justin Bieber concert tickets that Gealey said the Roskovskis bought using the fraud technique, Stallings said there is no evidence to prove that there were no potential physicians with the couple.Stallings also questioned DeFurio's attending a Pittsburgh Penguins hockey game with his wife in Washington, D.C., that was paid for through a collection effort by Stephanie Roskovski and her coworkers.He noted that one employee involved in this process, Anne Krebs, invoked her Fifth Amendment right to not testify Tuesday.Stallings also questioned Gealey's choice on Monday to read in court a flirtatious text exchange between Scott and Stephanie. “Is it relevant?” Stallings said.“They're getting excited that they're going to commit fraud. That's why I read it,” Gealey said.Stallings laughed and said, “Are you saying they're getting turned on by fraud?”“That's my take,” Gealey said.Stallings also questioned how DeFurio as CEO wouldn't ultimately find out that Stephanie Roskovski was defrauding the system.

Later in the day, DeFurio took the stand.He began his testimony by describing his association with Stephanie.“I trusted her very much,” DeFurio said. “She was my right hand. I relied on her very, very heavily. I thought we had an excellent working relationship.”Answering questions about his role in the process that allowed Stephanie Roskovski to get away with her scheme for so many years, DeFurio said it was a system he had inherited when he became CEO 14 years ago.He lamented not questioning the system and said he would sign a “master list” every month that included the administrative team's credit card expenses and disbursements for the period.He recalled having an office near Stephanie's and she would stop in periodically with invoices and disbursements for him to sign.“Looking back on it, it was a process none of the other executives used,” DeFurio said. “But at the time I didn't think twice about it. I didn't think it was a big deal.”He said Stephanie Roskovski came to him with small dollar figures that were no more than $100.The day before, Gealey had testified that Roskovski would sometimes take these checks and add extra zeros to increase the dollar amount.In 2016, DeFurio said that Stephanie nonchalantly approached him about an $8,000 disbursement request.He said they were talking when she asked, “'Hey take a look at this, while you're here.' It was an $8,000 disbursement check for a conference.”He said that he pushed back on the request, but she assured him it was the best conference of its kind for physicians, leading him to accede.Later, after he began to realize something was wrong in 2017, DeFurio would learn that nobody had gone to this conference.That year, he said that he became aware that “something was wrong” when he saw a check addressed to her for $16,000.He brought his misgivings to the system's attorneys and board of trustees, triggering an internal investigation. DeFurio and the other executives formed an ad-hoc committee to deal with the investigation. He said they also alerted the federal government that same year.That move would lead to a two-year investigation into Stephanie Roskovski and her husband. During that time their home was searched and hundreds of items were seized along with electronic devices and email correspondences belonging to the Roskovskis during the summer of 2018 and their arrest in April of 2019.But that discovery didn't just affect the Roskovskis. DeFurio said that news into the criminal investigation led a large number of physicians to leave the organization.“This did great reputational embarrassment for BHS,” DeFurio said. “We've worked diligently for four years to get back on track, through a pandemic I might add.”Since then, the health system has changed its financial processing system with heavier vetting measures in place, he said.During the cross-examination, Stallings pointed out that DeFurio also racked up large bills on the hospital's account, including an $800 dinner where several bottles of wine were consumed.DeFurio noted that there were several executives in attendance, therefore making the dinner a business event.At one point, DeFurio said there were no policies at the health system that prevented members of the administrative team, known as the A team, from doing things such as taking potential hires to a baseball game.The federal proceedings are scheduled to continue Wednesday.

Scott and Stephanie Roskovski

Ken DeFurio