Arkansas Juvenile Mental-Health Owner: Cash Through a Church for Agency Influence

The Arkansas juvenile mental-health fraud case involved a business owner who paid a state-agency deputy director for assistance and internal information, according to the Justice Department’s account of the criminal trial. Cash moved through a pastor’s church on its way to the official.

The Juvenile Mental-Health Business Behind the Payments

The owner ran two Arkansas companies providing inpatient and outpatient mental-health services to juveniles. The official he paid was a deputy director of the Arkansas Department of Human Services. In the Justice Department’s account of the criminal trial, the owner sought the official’s help for his businesses through that public position.

State Medicaid decisions about coverage, provider qualifications and rates help explain why access to a senior agency official can matter to a health care business. The public-agency relationship can matter to the business well before a particular treatment claim reaches a biller.

The trial account places the owner and a senior public official at the center of the arrangement. The business sought an advantage through someone inside the agency, and the money reached that official through people outside it.

How the Cash Moved Through the Church

The criminal trial evidence described a payment route involving the owner, an intermediary, a local pastor and the deputy director. Beginning around April 2007, the owner, intermediary and official periodically met at restaurants in Memphis, Tennessee, or in rural Arkansas. The owner used those meetings to request assistance for his companies from the official in his agency role.

According to the Justice Department, the deputy director agreed to perform official acts benefiting the owner and his businesses. The owner paid him by funneling cash through the pastor’s church, with the bribe payments reaching the official in cash so the transactions would be harder to trace.

A payment’s first destination can conceal its final recipient. Here, the trial account connected the money passing through the church to the person whose public position the owner wanted to use.

Church in the middle. Cash at the end.

For an insider who saw only one part of that route, the surrounding relationships matter. A request for assistance, a meeting and a payment belong together when they explain what the business expected in return.

Internal Agency Information Was Part of the Benefit

The deputy director also provided internal agency information to the owner, the Justice Department’s trial account says. The exchange reached both the official’s agreement to act for the businesses and information from inside the department.

Someone involved in the company’s dealings with the agency might know what was requested or how information reached management, even if someone else handled the cash.

The Justice Department attributed more than $1.5 million in profits for the juvenile mental-health counseling business to the scheme. The cash bought help for the business from an official entrusted with public responsibilities.

We see a straightforward betrayal here: a public official used his position to help a business whose owner was secretly paying him. The companies treated children. The owner bought help from inside the agency.

What the Criminal Case Established

The owner was convicted on July 20, 2016. The Justice Department described his conviction for bribing the public official, with the meetings, intermediaries and cash payments laid out in its account of the criminal trial.

The FBI’s Little Rock Field Office investigated the case. The Public Integrity Section of the Justice Department’s Criminal Division prosecuted it.

Agency Influence and Patient Brokering Buy Different Things

Patient brokering buys access to patients. In this Arkansas case, the payment bought a public official’s agreement to assist the businesses, along with internal agency information.

In the separate Health Care Solutions Network criminal case, the Eleventh Circuit described payments to hospital employees and assisted-living owners in exchange for patient referrals. Those recipients could direct patients to the treatment business. The Arkansas deputy director occupied a different position: the owner approached him for help from within a state agency.

Both arrangements put cash between a treatment business and someone able to benefit it. A referral payment points toward the people sending patients. A payment for agency assistance points toward the business’s requests, the official’s response and the information passed back. For a whistleblower who knows those relationships, that distinction helps us focus on what the money was buying.

How Payments Connect to False Claims

Payments for influence can reach beyond the person receiving the money to the treatment bills sent to the government. A separate civil case at University Behavioral Health of El Paso shows that connection. In its announcement of the hospital’s settlement, the Justice Department alleged that the hospital paid a physician more than the services were worth, or paid for services never provided, in return for Medicare referrals.

The hospital paid $860,000 to resolve the False Claims Act allegations. The alleged bargain put the physician’s payments and the hospital’s Medicare business in the same case. For someone handling a service agreement, the question was what the payment actually purchased: the work described in the agreement or the patients the recipient could send.

The Arkansas trial account describes a different purchase: help and information from inside a public agency. Here, the useful connection runs from the owner’s requests through the intermediaries to the official’s agreement to help. In the El Paso allegations, it ran from a physician’s service agreement to Medicare referrals. Both show why the purpose of a payment matters alongside the name on the account.

The Whistleblower Question Is About Your Business’s Claims

If you recognize payments for agency influence inside a healthcare business, we want to understand how the arrangement connects to government-funded treatment and the claims for payment. Your knowledge of who asked for help, who handled the money and what the business received gives us a place to begin.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Who the Payment Was For

If you saw money routed through an intermediary or internal agency information reaching a treatment business, you may know who the payment was really for. Speak to one of our Whistleblower Experts about what that payment bought. We build your strongest whistleblower case around that inside knowledge, find behavioral health fraud whistleblower lawyers who understand payment and referral arrangements, and stay beside you as the case moves forward.