Federal Kickback Scheme

Published 12:00 am Friday, March 25, 2011

Levi Garner

Ray Shoemaker

David Chandler

Attorney says Chandler ‘source’ for Feds

By Billy Davis

Ray Shoemaker and attorneys for Levi Garner entered not guilty pleas Tuesday to federal charges alleging a kickback scheme at Tri-Lakes Medical Center.

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A trial date was set for May 9 in Oxford for Shoemaker, 38, and Garner, 66.

Ashland attorney Steve Farese Sr. represented Shoemaker in U.S. District Court at the arraignment hearing. 

Ronald Michael and Christi McCoy, attorneys for Garner, also entered a not guilty plea on behalf of the Batesville businessman.

Garner, who did not appear at the arraignment, had entered a Waiver of Appearance to the court along with the plea, Michael told The Panolian.

A 10-count federal indictment was handed down February 24 by a federal grand jury seated in Oxford, home of the U.S. District Court of North Mississippi.

The indictment was unsealed then made public March 16.

Shoemaker faces up to 80 years in prison, and $2.5 million in fines, if convicted of conspiracy, fraud,  embezzlement, and lying to federal investigators. 

Garner faces up to 25 years in prison and $1 million in fines if convicted of conspiracy and fraud.  

Michael said his client, Garner, is “looking forward to presenting his side at trial.”

“We strongly maintain Mr. Garner’s innocence. He absolutely denies any of the allegations against him,” said the attorney.

Farese, the attorney for Shoemaker, said, “Mr. Shoemaker has been charged with some serious offenses and of course to get to the bottom of the allegations, you have to look at the source.”

The “source,” Farese further explained, is former Panola County Administrator David Chandler.

The federal indictment also implicates Chandler, though he has not been indicted by a grand jury.

The Panolian reported Tuesday that investigators allege Chandler used his own monies from Garner to pay a kickback to Shoemaker.   

Assistant U.S. Attorney John Alexander, reached by phone Tuesday, said he could not describe Chandler’s role in the federal investigation.

“This is a continuing investigation and additional charges are expected,” he told The Panolian.

Authorities allege Chandler acted as a middleman, ensuring that then-hospital CEO Shoemaker used Garner’s nursing service at Tri-Lakes.

Chandler allegedly received $5 for every hour that Garner billed to Tri-Lakes, which totaled approximately $268,000 over two years, according to the indictment.

Before the indictment became public, Chandler was already facing a demand from the Mississippi State Auditor to pay back $292,772.

State officials alleged in January that Chandler had violated state retirement rules and falsified documents he sent to the state retirement system known as PERS.

A spokesman for the state agency said the State Auditor was part of a “joint task force” that produced the recent indictments.