Attorney general checking on Delap

The former deputy director of the Nevada State Board of Osteopathic Medicine is under investigation by the state attorney general for alleged financial improprieties at the board, the Review-Journal has learned.

The investigation into John Elliot Delap III, also known as Trey Delap, comes on the heels of a guilty plea he entered in February to theft charges in connection with another organization, Administrators in Medicine, or AIM.

Conrad Hafen, chief deputy attorney general over the attorney general's criminal division, confirmed this week that Delap, 29, is the subject of an ongoing probe.

"To protect the integrity of the investigation, I cannot say more at this time," Hafen said.

Dr. Larry Tarno, executive director of the state osteopathic board, said Tuesday that once he learned of Delap's criminal involvement with AIM, he put the financial records of his own organization under scrutiny. The board licences physicians and investigates complaints against doctors.

"We took a close look at bank statements, billings and payouts and felt there was a possibility of a problem," Tarno said. "I asked the attorney general to get involved. There appeared to be funds missing."

Computer and financial records were seized by state authorities more than four months ago from board headquarters at 2860 East Flamingo Road. That followed Delap's Feb. 5 guilty plea in Clark County District Court to felony theft in the AIM case.

AIM is a nonprofit national organization that supports the work of state licensing boards for both osteopathic doctors (DOs) and allopathic doctors (MDs), often through training seminars. Delap was AIM's former treasurer and his theft of about $35,000 -- about half of what AIM collects in dues each year -- took place while he was in office between Dec. 18, 2003 and Nov. 15, 2004, according to court documents.

Leslie Gallant, past president of AIM and the current executive administrator of the Alaska State Medical Board, said Delap's criminal behavior made it difficult to carry out the organization's mission, including the training of investigators who look into malpractice claims.

"AIM is very small," she said in a telephone interview Thursday. "What he did hits very hard. It has made it difficult to carry out our activities, which ultimately advance public safety. There's no advanced training for this job, which makes our training activities critical."

Attempts to reach Delap, who this year received his master's degree in ethics and policy studies from the University of Nevada Las Vegas, were unsuccessful. His attorney, Bill Terry, did not return phone calls.

In a statement to Las Vegas police, Delap explained his criminal behavior while at AIM.

"While I was treasurer, I was also compulsively gambling. I spent all of my spare personal money on gambling and when that money ran out I began issuing checks from the AIM account to myself."

In a plea agreement with the district attorney's office, Delap received five years probation for embezzling funds from AIM. He was ordered to make restitution of $34,208.14. He also must attend Gamblers Anonymous a minimum of two times per week for the first three years of probation.

Tarno said the fiscal situation with the osteopathic board, which takes in about $400,000 a year from licensing doctors, became so dire that he had to let the board's investigator of complaints against doctors go in July 2005.

"We have not had a formal investigator since then," Tarno said. "This has put me in a position of having to curtail activities of investigations. We have gotten some complaints from people that we're burying things."

With the help of other doctors, however, the semi-retired Tarno said he believes he is still dealing with malpractice complaints in a timely way. "But we probably do need an investigator to gather information," he said.

Tarno said he first hired Delap part time in 2002. Delap, according to Tarno, tendered his resignation in the fall of 2005, to be effective in February, 2006.

Tarno said Delap gave as a reason for his resignation his belief that a doctor wasn't being punished strongly enough for malpractice and unprofessional conduct.

Tarno said he had no idea Delap may have been engaged in improper behavior until he became aware of the AIM case.

Tarno said he was told by Delap that financial problems at the board were because of the cost of investigations into malpractice complaints. The board owes $240,000 to the attorney general's office for carrying out investigations, Tarno said.

Still, Tarno said, "I can tell you right now the board is solvent. A year ago, it was not."

Delap's embezzling scheme at AIM began to unravel in April 2005 when Drennan Anthony (Tony) Clark, a board member of AIM and executive director of the Nevada State Board of Medical Examiners, filed a complaint with police, listing AIM as the victim and Delap as the suspect.

"The embezzlement of funds was discovered when the new treasurer ... was attempting to reconcile the books and discovered that Delap had written checks to himself and deposited them into his personal account," Las Vegas police detective David West wrote in a report.

The 25 checks ranged from $500 to more than $3,000, West's report shows.

"Delap admitted that he had stolen the 25 checks and made false entries in the general ledger showing other payees," West reported.

Clark said Delap hadn't been responsive to requests for AIM financial information. "We could never get a solid financial report from Trey," Clark said.

In June 2006, well after he embezzled funds from AIM, Delap wrote a letter to the Review-Journal identifying himself as a UNLV graduate student studying ethics. He argued that UNLV and the School of Dental Medicine should assume a "no tolerance" posture in dealing with cheating dental students.

"The morally aberrant conduct of these students is severe," he wrote. "It should be met with equally severe consequences by revoking their degrees."