It couldn’t have come at a worse time. Just as the U.S. Congress is launching a full-scale investigation of the nation’s largest abortion provider, a Planned Parenthood Gulf Coast (PPGC) employee has filed a whistleblower’s complaint with the Texas Attorney General alleging that the abortion business engaged in an elaborate Medicaid fraud scheme.

According to pro-life blogger Jill Stanek, PPGC employee Karen Reynolds, who worked as a “health care assistant for 10 years at a Lufkin, Texas clinic, has submitted company memos and e-mails to support her charge that Planned Parenthood and its officers “engaged in systemwide scheme to defraud Medicaid, Title XX, and the Women’s Health Program of tens of millions of dollars over the course of at least ten years.

“Reynolds alleges bosses trained employees to bill government agencies for medical and family planning services not rendered, for services no reasonable medical personnel would provide, and – the biggest bombshell – for abortion-related services fudged to appear as if they were not,” Stanek writes.

Reynolds claims PPGC had a policy of providing abortions and other services based on the customer’s ability to pay. She says that when the patient was paying out of pocket, then only “services based on medical necessity” were provided. However, if a patient was using Medicaid or another government program, Planned Parenthood would run up the costs “often provid[ing] services on an ‘across the board’ basis even when such services were not medically necessary.”

Reynolds also said Planned Parenthood officials would frequently give women on Medicaid who came to the clinic for birth control a bag of condoms and vaginal film, even if they didn’t request the items, so they could run up the tab the federal government would pay with taxpayer funds.

This fraud wasn’t limited to birth control, however. Reynolds alleges that PPGC would falsify medical charts for patients who were having, or had, abortions, to make it appear as if their visit was for some other reason so Planned Parenthood could receive federal reimbursement.

“The biggest bombshell in the complaint comes on page 15, which describes how PPGC falsified charts of aborting or post-abortive patients to appear as if their visit was for another reason,” Stanek writes. “It is illegal under the Hyde Amendment for federal taxpayer dollars to fund abortions unless for rape, incest, or life of the mother. But PPGC found ways around this.”

Stanek goes on to quote from one PPGC memo listed in the complaint:

‘POST AB [Abortion] VISITS: We must work these clients in! This visit is self-pay. Quote the self-pay price then ask if she needs any other services such as birth control. If she is interested, screen for WHP or Title XX and offer the WWE [Well Woman Exam]. If the client is getting on birth control make this the focus of the visit and put a note in the chief complaints that the client had a surgical or medical abortion “x” weeks ago.’

“To pro-lifers, this information is the proverbial smoking gun, showing more than that the line of demarcation between federal funds and abortion is fungible, but that at least this Planned Parenthood worked the system to illegally obtain taxpayer dollars for abortion-related services,” Stanek writes.

Reynolds contends that every clinic had an annual, monthly and daily government revenue goal, and monthly staff meetings were held that included PowerPoint presentations used to train employees no how to maximize government revenue. They were so intent on gleaning the most government money possible they actually sent employees from “under performing” clinics to “higher performing” ones to learn how to increase their revenue.

According to the complaint, these practices involved several corporate officers such as PPGC CEO Peter Durkin who just announced his retirement, as well as board members, clinic directors, assistant clinic directors, health care assistants, and nurse practitioners.

Stanek reports that U.S. District Judge Ron Clark recently denied PPGC’s request to stop the discovery process in this case. Frank Manion of the American Center for Law and Justice who is representing Reynolds, told her their offices have just begun to receive relevant documents from PPGC.

If they are found guilty of fraud, the organization will lose all government funding and will more than likely be forced out of business because, according to their 2010 IRS Form 990 form, two-thirds of their service revenue comes from state and federal taxpayers.

This kind of financial impropriety is exactly what the U.S. Congress is looking for in its investigation of Planned Parenthood. Rep. Cliff Stearns (R-FL), Chairman of the House Committee on Oversight and Investigations, has already required Planned Parenthood Federation of America president Cecile Richards to turn over an extensive array of documents regarding the organization’s standards and practices related to billing issues, written policies and procedures, and information on how they keep family planning and abortion money separate.

Planned Parenthood has been found to have engaged in fraudulent billing or faces accusations of similar improper billing in several other states, such as in California where they overcharged the government in excess of $5 million for oral contraceptives. Federal audits conducted in 2008 in New York and New Jersey uncovered practices similar to those being employed in Texas where the state was billed for “family planning” services that were actually for unrelated services.

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