FBI alleges kickbacks, fraud more in 10-count indictment
Business owner, former Tri-Lakes CEO named in unsealed documents
By John Howell Sr.
Indictments charging former Tri-Lakes CEO Ray Shoemaker and Batesville businessman Lee Garner in an alleged kickback scheme involving nursing services stem primarily from the period from May 2005 to June 2007, when the hospital was headed for bankruptcy, according to records from the U. S. District Court.
The indictments were handed down by the Federal grand jury February 24, sealed and then opened March 15.
Count One alleges that Garner, former Panola County Administrator and Tri-Lakes Medical Center Board of Trustees President David Chandler, and Shoemaker entered a conspiracy in which Garner paid Chandler a bribe to use his influence with Shoemaker to increase Tri-Lakes Medical Center’s use of Garner’s Guardian Angel Nursing Services and On-Call Nursing Servicing for hospital staffing.
Chandler is not named in the indictment, though his name is sprinkled throughout court papers.
“Garner paid approximately $268,000 in kickbacks and bribes pursuant to the scheme,” the first count of the indictment alleges. In return, Chandler “approved an increase of $50,000 in Shoemaker’s annual salary.”
Count two alleges that Garner paid a bribe; Count three alleges that Shoemaker solicited and accepted a bribe; Count four alleges that Garner and Shoemaker conspired to use the bribery and kickback scheme to influence a Federal health program (Medicare and Medicaid), count five alleges that Garner committed healthcare fraud; and count six alleges that Shoemaker committed healthcare fraud.
In Count seven, Shoemaker is charged with lying to FBI agents about payments from Chandler. The eighth count charges Shoemaker with lying to representatives of the Rural Development Administration of the Department of Agriculture. Count nine alleges that Shoemaker embezzled $250,000 “on or about April 7, 2006.” The final count of the indictment alleges that Shoemaker embezzled $39,922 from Humphreys County Hospital.
Until November, 2005, Tri-Lakes Medical Center was owned by the City of Batesville and Panola County. It was then sold to Physicians and Surgeon’s Hospital Group, a non-profit corporation. Shoemaker, who had served as CEO prior to the sale, remained with the hospital in an administrative capacity until 2007.
In August, 2007, the hospital filed for bankruptcy. It was operated under a court-appointed Chief Restructuring Officer until it was purchased in late August, 2009 by the current owners, Alliance Health Partners, LLC, a physicians syndicate owned by local doctors.
The 21-page federal indictment can be viewed online at www.panolian.com.