Former NSW health boss fined $1.2m

The former head of an indigenous NSW health service has been ordered to pay more than $1.2 million after he embezzled large amounts of money from the organisation.

The Federal Court found Damien Matcham had made unauthorised payments of more than $700,000 for bonuses, time in lieu, superannuation, recreation leave and life insurance when he was CEO of Katungul Aboriginal Corporation Community and Medical Services.

In a judgment on Wednesday, the Federal Court ordered Matcham to pay $705,905 in compensation to the organisation, pay the Commonwealth of Australia $500,000 and also pay legal costs.

Matcham has been disqualified from managing Aboriginal and Torres Strait Islander corporations for 15 years.

"It is plain that Mr Matcham abused his position of trust by obtaining payments of large amounts to which he was not entitled and which were obtained for his personal use," the written judgment said.

"His breaches of trust were committed over a period of four years in circumstances which demonstrate that he should have been aware that he was not entitled to the payments."

The not-for-profit corporation provides health services to Aboriginal and Torres Strait Islander people on the NSW far south coast and receives state and federal funding.

The service was placed in special administration in late 2011 after an investigation revealed Matcham had been transferring money to himself.