Hospital kickback convictions upheld by Appeals Court

Published 12:00 am Tuesday, July 21, 2015

Hospital kickback convictions upheld by Appeals Court

By Rupert Howell
 A 5th Circuit panel said last week that U.S. District Judge Neal Biggers Jr. had no authority to order new trials for two local men allegedly involved in a kickback scheme connected with the former Tri-lakes Medical Center in Batesville, according to an Associated Press news story.
The three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans ordered the convictions reinstated and ordered Biggers to hold new sentencing hearings.

Nurse staffing company owner Lee Garner and former administrator Ray Shoemaker of the former Tri-Lakes Medical Center in Batesville were convicted on charges in the scheme in 2011 by a federal jury in Oxford.

Federal prosecutors said the men conspired to increase Garner’s business at the hospital and Garner paid Ray Shoemaker for his help. Garner was accused of offering to pay Shoemaker $25,000 in exchange for Shoemaker’s influence over the ordering of nursing services.
Former Panola County administrator David Chandler was also indicted in the scheme and cooperated with the government as their lead witness against Garner and Shoemaker. He has since been sentenced and served time.

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In a memorandum opinion filed last July, Biggers ordered new trials because the government failed to make known to defense attorneys indictments against Chandler until the trial was almost over.

Biggers stated in an opinion in a memorandum dated July 15, 2014, “Chandler, the man who originated the conspiracy for which these defendants were prosecuted—was, at the time of the trial, under a 26 count indictment and had been for one year.”

Those indictments had been sealed at the government’s request according to the order.
Bigger’s memorandum continued, “The . . . material obviously would have  been useful in planning a defense and planning a cross-examination of the main witness . . .; yet its existence was not revealed until the trial was in progress and Chandler had already testified on direct,” Biggers opinion stated.

Chandler had been named to Tri-lakes board of trustees when it was county-owned and served as that boards chairman. He also was employed by Garner following his retirement from Panola County.

Garner was convicted on three counts of fraud and one count of bribery. Shoemaker was convicted on two counts of fraud and one count of bribery.

Shoemaker is currently serving a 55-month sentence on other counts in the scheme. Garner has yet to be sentenced.

Thursday’s ruling marks the second time the case has had to be addressed by the appeals court.

In 2012, Biggers overturned the jury verdict saying the government failed to prove the person receiving the alleged bribe — in this case former hospital board member Michael David Chandler — had any control over nursing service contracts.

Prosectuors appealed to the 5th Circuit, which in 2014 reinstated the convictions and ordered Biggers to proceed with sentencings.

Court records show that last July Biggers, instead of sentencing Garner and Shoemaker, ordered new trials for both men. Biggers said new trials were necessary because the government didn’t make public the indictment of their star witness until the trial was essentially over.