Former Kentucky State Rep Pleads Guilty to Fraud and Money Laundering

By - June 1, 2022
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Former Kentucky state representative Robert Goforth pleaded guilty last week to federal fraud and money laundering charges.

The former Republican lawmaker will soon be convicted for using his Hometown Pharmacy business in Clay County, Kentucky, to bill insurance companies for $2.5 million in extra prescriptions that were not picked up. They were then sold later on the street. Goforth owns five pharmacies in the southeastern part of the state.

After he was accused of these financial crimes in 2021, he resigned from his state legislative seat. He said at the time that personal and family events demanded his attention.

Court Records Show $1.4 Million Of Overbilling Happened After Goforth Found Out

After several months, Goforth found out there was a substantial amount of overbilling happening at his pharmacies. However, he became aware of the problem at one point, but $1.4 million in overbilling still happened. Also, the police say he took intentional steps to avoid knowledge of the financial fraud.

He admitted when he pleaded guilty that he wrote a $17,000 check from a bank account that contained money from the financial fraud. Most of his pharmacies’ business came from Medicaid and Medicare, which he was found to have charged $950,000 illegally.

Goforth said the regular procedure in his pharmacies was to credit the charge back to the insurance company if the customer didn’t pick up the drugs. But after he looked into the matter and saw several discrepancies, he ignored it and allowed the improper billing problem to fester.

In his plea agreement, he said about $2.5 million in excessive billing happened at his pharmacy in Manchester from when he began it to when it was sold in 2016. Of that, about $1.3 million occurred after he found out about the billing problem.

Goforth said he should have taken action when he found out about the overbilling but chose to hide it.

Goforth will receive his sentence by the end of 2022. He could get up to 10 years in federal prison and need to pay $3 million in restitution. However, his plea agreement states that he can only appeal if he is given more than 37 months in prison. He also has agreed to forfeit $1.8 million and terminate his pharmacist’s license.

US District Judge Robert Wier set up Goforth’s sentencing for September 2022, and the convicted man is on supervised release until his sentencing.

Not Goforth’s First Run-In With The Law

In 2020, Goforth was charged with felony strangulation, terroristic threatening, and assault after a domestic violence incident in the early morning hours. He was booked in the Laurel County, Kentucky, jail on April 20 of that year. He was placed under arrest in his hometown East Bernstadt.

The Laurel County sheriff’s office reported that Goforth was arrested at 3 am after a woman said he assaulted her in their home. There also were three young children present, but they were unharmed.

The victim of the alleged assault told the police that Goforth threatened to kill her. Police also said there were visible markings on her arms, neck, and forehead. She also had bruises on her left leg.

There was no felony strangulation law until 2019 when the state legislature passed the bill. Goforth voted for the law.

Goforth was not the only Laurel County representative arrested in 2020. Republican Representative Derek Lewis also was arrested for drunk driving on April 16, 2020.

Goforth was elected in a special election in 2018 to represent Kentucky’s 89th district. He then won the seat for a full term in the next election. He also unsuccessfully challenged Governor Matt Bevin for the Republican nomination in 2019 and won 39% of the vote.

After Goforth was accused of strangulation, the Kentucky Democratic Party said he should resign. The Democratic Party said it wasn’t the first time that a victim of one of Goforth’s assaults complained about his behavior.

He also was accused of assault in 2008 and 2009, according to a report in the Lexington Herald-Leader. But Goforth denied those allegations.

Other Kentuckians Convicted For Fraud in May 2022

In other fraud news in the state, Gerald K. Kingston and Bobby J. Merrick, from Princeton, Kentucky, pleaded guilty to stealing at least $350,000 from a grain elevator company in Lyon County.

Court documents report that Kingston was a manager at Gavilon Grain where he ran a grain elevator in Eddyville, Kentucky. Merrick is a farmer in the area who signed a contract with Gavilon Grain to sell wheat, corn, and soybeans.

From 2016 to 2021, Merrick and Kingston came up with a scheme to steal money from Gavilon Grain by making several scale tickets for every load of grain that Merrick brought in. Kingston would submit tickets electronically for the scale tickets to the grain company’s HQ in Nebraska. The scheme made it so Merrick was paid twice for every crop he sold.

During federal court proceedings, both men admitted that Merrick received $354,000 for loads of products that didn’t exist. After he was paid from Gavilon Grain, Merrick would pay cash to Kingston for his part of the fraud.

Both men pleaded guilty of conspiracy to commit wire fraud and five counts of wire fraud. They will have to pay $354,000 in restitution and could receive time in federal prison.

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