American Registry of Pathology Chief Admits to Stealing Millions

It appears the former executive director of the American Registry of Pathology (ARP) will be transitioning from behind a desk to behind bars. Michael Parry, who had been with ARP for 17 years, admitted in federal court in Maryland to embezzling nearly $2.2 million from the organization. The sum represents roughly a third of its cash assets, according to recent tax records.

The 58-year-old Parry pled guilty to wire fraud and money laundering last month, the U.S. Justice Department announced. He faces up to 30 years in prison when he is sentenced in December. Charges had been filed against Parry only last Sept. 4. His plea agreement came less than two weeks later.

Physicians, including pathologists, have been regularly prosecuted in state and federal courts for fraud in recent years, but the Parry case may involve the highest-ranking member of the laboratory/pathology community to date.

Parry, an accountant by training, was named executive director of ARP just last year, after more than two years in the role in an acting capacity. He had replaced William A. Gardner, Jr., M.D., who passed away suddenly in October 2011. Parry had joined the organization in 1998 as its director of operations. He resigned from ARP in the spring of 2014, just after being named the permanent executive director.

Parry received total compensation of more than $257,000 in 2011, the most recent year for which records were available. That made him the second-highest paid executive at ARP aside from Gardner that year.

ARP is a Congressionally chartered non-profit organization that funds research for pathology in both the civilian and military world and maintains a specimen registry. It receives about $25 million a year in grants, membership fees and other revenue, tax records show. It is best known for operating the National Museum of Health and Medicine in Silver Spring, Md., and the ARP Press, which publishes a variety of pathology-related texts. It also provides staffing for the Armed Forces Medical Examiner System, which conducts autopsies among military personnel. An affiliated quasi-governmental organization, the Armed Forces Institute of Pathology (AFIP), was shut down by ARP in 2011 shortly before Gardner died, leading to the layoffs of about a third of ARP's workforce. Prior to its closure, AFIP had played a role in selecting ARP's executive director.

The ARP, which has offices in both Maryland and Delaware, keeps an extremely low profile and does not even operate its own website.

According to the Justice Department, Parry, who is a resident of Florida, had directed a number of wire transfers between ARP and the International Registry of Pathology (IRP), between February 2010 and April of last year. Parry served as treasurer of the latter organization, which provides support to pathologists working in developing countries, and had control over its bank accounts. Records show he did not receive any compensation in his role with IRP, although that organization has not filed a tax return since 2008.

The transfers were purportedly to fund medical studies, research grants and other activities that ARP normally underwrites. Parry then fabricated invoices from a legitimate vendor related to medical research studies; emails from himself to others to suggest he had funded fictional research fellowships; and wire transfer documents showing that payments were made directly from ARP's accounts to legitimate ARP vendors or educational institutions. Parry then transferred the funds from the IRP account to his own account. As part of his guilty plea, Parry has agreed to pay the ARP full restitution for the money that was taken.

Takeaway: Michael Parry's recent guilty plea is probably among the highest level convictions in the lab/pathology sector.