Healthcare company to pay additional $8 million arising from corrupt practices in Arkansas

The U.S. attorney for the western district of Missouri has announced that Springfield-based Preferred Family Healthcare will pay an additional $8 million in forfeiture and restitution to the federal government and Arkansas for past corrupt dealings in Arkansas.

Preferred Family Healthcare must relinquish the illegal profits it garnered from a wide-ranging fraud and bribery scheme,” said U.S. Attorney Teresa Moore for the Western District of Missouri. “Several former officers and employees are being prosecuted in separate criminal cases for their individual criminal conduct. This non-prosecution agreement holds the charity itself responsible for their actions as agents of the charity. Public tax dollars were stolen and misused in the course of this public corruption scheme, and through this agreement and these separate prosecutions, those dollars are being restored to the public coffers.”

“Employees of Preferred Family Healthcare used charitable organizations to illegally line their own pockets through fraud and bribery,” said Special Agent in Charge Tyler Hatcher of IRS-Criminal Investigation (IRS-CI) “IRS-Criminal Investigation and our law enforcement partners will continue to work diligently to uncover large frauds designed to divert funds that were meant to help those in need of medical services. Preferred Family Healthcare has acknowledged that its former employees engaged in criminal activity and they are taking steps to make amends by forfeiting a sum of money to the federal government and paying restitution to the state of Arkansas.”

The nonprofit, whose leadership has changed and which no longer does business in Arkansas, will forfeit $6.9 million in federal claims and pay $1.1 million to Arkansas. It had earlier reached a $6.5 million settlement of false Medicaid claims.

This is the case that led to the conviction of former lobbyist Rusty Cranford and former Sen. Jeremy Hutchinson, the governor’s nephew. The sprawling public corruption investigation that tracked bribes and kickbacks through the distribution of state surplus money also netted convictions of four other Arkansas legislators. Cranford and Sen. Jon Woods and Rep. Micah Neal, convicted in the Ecclesia College kickback scandal, have gone to prison or served home detention, respectively. Others, including former legislators Eddie Cooper and Hank Wilkins, await sentencing, likely because Tom and Bontiea Goss, the husband-and-wife team from Missouri who were kingpins of Preferred Family Healthcare, are awaiting trial later this year in Springfield. Former employees also await sentencing, including former director of operations Robin Raveendran of Little Rock.

Said the news release:

By signing the non-prosecution agreement, representatives of Preferred Family Healthcare admitted that former officers and employees of the charity engaged in a conspiracy to, amongst other criminal activity, embezzle funds from the charity and to bribe several elected state officials in the Arkansas House of Representatives and the Arkansas Senate. As a direct result of these actions, Preferred Family Healthcare realized a financial benefit. Although Preferred Family Healthcare’s board of directors did not receive full or accurate information about these actions, the board, through lack of proper oversight, allowed its officers and employees to violate federal law.

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