The Kansas attorney general has started an investigation of alleged embezzlement of $1-million in Medicaid funds from a nonprofit group hired by the state to serve mental-health patients, The Topeka Capital-Journal writes.

Jason Sellers, the former chief financial officer of Kansas Health Solutions, is suspected of using a phony billing arrangement to skim cash from $190-million allotted to the state Department of Social and Rehabilitation Services for Medicaid-covered mental-health treatment.

Attorney General Derek Schmidt’s office “has accepted the case for review,” a spokesman for Mr. Schmidt said Wednesday.

In the meantime, the state is inserting stricter oversight and accounting requirements in a new contract it is negotiating with the nonprofit group.

Mr. Sellers left Kansas Health Solutions in late August, when the Topeka newspaper first reported on the accusations. The newspaper did not include a comment from him on the investigation.

The organization’s executive director, Michael Goldberg, also departed, but the head of its board said there was no evidence Mr. Goldberg was involved in the alleged fraud.