Health Care Charity Forfeits $8 Million In Federal Embezzlement Scheme

By - April 12, 2022
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Preferred Family Healthcare, a non-profit based in Springfield, Missouri, must pay more than $8 million in restitution to the US government and Arkansas.

These are the terms of a non-prosecution agreement that was announced last week that acknowledges the embezzlement and bribery scheme of eight former officers and employees.

The US Attorney’s Office in the Eastern District of Missouri stated that Preferred Family Healthcare must give up the illegal profits it obtained from its fraud and bribery schemes. Several former executives and employees are being prosecuted by the federal government in separate criminal cases.

They added that public tax dollars totaling more than $6 million were stolen and misused in the public corruption fraud. Also, the IRS stated that employees of the healthcare charity used the organization to line their pockets via fraud and bribery.

Most Of The Stolen Funds Were Medicaid Reimbursement

Preferred Family Healthcare offers medical services to residents in Missouri, Arkansas, Oklahoma, Kansas, and Illinois. This includes behavioral health and mental health treatment and counseling, substance abuse treatment, and employment assistance. Most of the funds come from the federal government and most of that is Medicaid reimbursement.

As part of the non-prosecution agreement, employees of the healthcare charity admitted that former executives and other employees engaged in a conspiracy to embezzle money from the charity. Then, they gave bribes to elected state officials in the Arkansas legislature, in both the House of Representatives and Senate.

Because of those actions, Preferred Family Healthcare was earning a profit, in violation of its non-profit status. Because its board of directors did not have proper oversight, it allowed its executives and employees to break federal law.

The terms of the agreement state that the charity will give up more than $6.9 million to the US government and pay $1.1 million in fines and restitution to the state of Arkansas for the misuse of funds from its general improvement fund.

Several officers from the charity and former legislators in Arkansas and others have already pleaded guilty in the federal investigation.

Some of the federal charges the eight charity officers pleaded guilty to include:

  • Conspiracy to embezzle and misapply funds of a charitable organization that receives federal money
  • Conspiracy to commit bribery concerning programs that receive federal money
  • Concealment of a known felony
  • Federal program bribery
  • Embezzlement
  • Devising a scheme and artifice to defraud citizens of Arkansas of their right to honest services

1 Healthcare Charity Executive Bribed An Arkansas Politician With $100,000

One of the men that is being charged by the federal government is Milton Cranford, 56, from Rogers, Arkansas. He is a former executive of Preferred Family Healthcare and also a lobbyist in the Arkansas state government.

The federal government has accused Cranford of paying $100,000 in bribes to Arkansas politician Henry Wilkins that were hidden as donations to Wilkins’ church.

Federal prosecutors allege a plaque was put in the church in Cranford’s name to make the payments look like donations.

During a recent hearing on the bribery scheme, it also came to light that Cranford planned to murder his co-defendant Donald Jones.

Prosecutors allege that Cranford told a friend, who was an informant for the FBI, that Cranford had a job for him that required a firearm. Cranford then told the man that Jones ‘needs to be gone,’ while making a gun gesture with his hand.

Jones pleaded guilty to federal charges last year and is cooperating with the federal government.

Cranford also gave the FBI informant $500 cash and said they would talk about the job later. When federal agents arrested Cranford, prosecutors said he had changed his appearance, bought a gun, and liquidated some of his assets.

However, Cranford’s attorney denied his client engaged in a murder-for-hire scheme, noting that his client’s actions weren’t as they seemed. He denied Cranford made a gun gesture and didn’t intend to hire his friend to kill Jones.

The attorney also noted that Cranford hadn’t changed his appearance but had just had his hair dyed when he was placed in federal custody. And Cranford is a gambler, which explains why he had so much money in his home.

Preferred Family Healthcare Scheme Entangles Philly Political Consultant

The bribery and embezzlement scheme in Missouri also involved people as far away as Philadelphia. A political consultant in that city pleaded guilty to conspiring with an Arkansas legislator to spend almost $1 million on kickbacks and illegal political activities.

Jones, mentioned above, pleaded guilty to conspiring to steal from an entity that receives federal money. He lobbied for Preferred Family Healthcare and set up a system where the charity contributed to political campaigns illegally.

The federal government used financial records and emails to build the federal case against Jones.

Federal documents say Jones received about $973,000 from Preferred Family Healthcare during the healthcare fraud that ran from 2011 to 2017.

Federal law enforcement also said the people involved in the scam hired political lobbyists to influence Arkansas officials for funding. They had the non-profit reimburse them for their contributions to elected officials. They received at least $260,000 in kickbacks from Donald Jones.

Preferred Family Healthcare received more than $250 million in Medicaid reimbursements from Oklahoma, Missouri, Arkansas, and Kansas between 2011 and 2016. It also got more than $53 million from the US government from programs that involve grants, guarantees, insurance, contracts, and loans.

Attorney Geoffrey G. Nathan

About Geoffrey Nathan, Esq

Geoffrey Nathan is a licensed attorney in the Commonwealth of Massachusetts since 1988, admitted to practice in both Federal and State courts. He is a Boston criminal defense attorney with over 25 years of experience in felony, federal, and white-collar crimes. Board of Bar Overseers Number #552110