Swift Justice

June trial set

A June 4 trial has been set for the federal criminal cases against a former Healthcare official and (another) man who are alleged to have conspired to embezzle nearly $850,000 from the organization.

Former (Chief Executive Officer) and (co-conspirator from out of state) pleaded not guilty to 15 felony counts at their arraignment in Court.

The two men are free on $50,000 unsecured bonds pending their next court appearance, but are prohibited from traveling without permission from federal authorities. Court records say CEO will be living with his mother, while co-conspirator will remain at his home.

CEO, who had been living in Thailand, was required to give up his passport as a condition of his bond, as was co-conspirator.

They appeared in court voluntarily last week and were not taken into custody.

The 15-count indictment from the Grand Jury, alleges a scheme between the two men that began in March (2011). That’s when CEO allegedly told (the hospital’s ) (director of recruiting) that he’d be handling all physician recruitment. The indictment alleges that was part of a fraudulent billing scheme in which CEO would send money to a limited liability company created by co-conspirator and claim it was for recruiting.

In reality, co-conspirator— who has a background in music and religious education — was to pocket 25 percent of the money and send 75 percent back to CEO, the indictment says.

CEO had (the hospital) pay (money) to co-conspirator via 12 checks, according to the allegations. Those checks, sent via Federal Express, are the basis for the 12 counts of mail fraud.

Co-conspirator allegedly kicked the money to CEO via checks and overseas wire transfers. Co-conspirator also transferred some of the money to himself via an overseas wire transfer, the indictment says, related to the count of money laundering.

On Sept. 25, with (hospital) auditors questioning the payments, the two men allegedly exchanged an email containing fabricated invoices and contracts — constituting the count of wire fraud.

On Sept. 26, CEO resigned, though he later asked to rescind his resignation, citing “deceitful” communications from (management company who) is suing CEO in connection with the embezzlement allegations.

The 15 counts carry a maximum combined penalty of 290 years in prison and $3.75 million in fines. However, under federal sentencing guidelines, the two men would likely face only a fraction of those penalties if convicted, given their apparent lack of prior criminal history and other factors.