Former Archbold CEO Ken B. Beverly Convicted of All Six Counts Related to Medicaid Fraud

The United States Attorney for the Middle District of Georgia, Michael J. Moore, announced that on December 8, 2010, Ken B. Beverly was convicted after a seven-day jury trial of six felony offenses related to Medicaid fraud and obstruction of justice.

Moore said, “Mr. Beverly’s conduct is an example of extraordinary greed. He was willing to try and fraudulently obtain money from a public program specifically designed to guarantee that those who need medical care but can’t afford it have a way to receive treatment. With the crisis in our health care system, this type of fraud and abuse is simply reprehensible.”

The trial took place in the United States District Court in Valdosta, Georgia, the Honorable W. Louis Sands presiding. Defendant Beverly was formerly the CEO and president of Archbold Medical Center and Archbold Memorial Hospital, Thomasville, Georgia, and served in those positions for over 20 years. Beverly was convicted of all six counts of the indictment:

Count One: Conspiracy to Falsify Records - 18 U.S.C. § 1519 /i/c/w § 371
Counts Two and Three: Falsification of Records -18 U.S.C. § 1519
Counts Four and Five: Obstruction of Justice - Witness Tampering - 18 U.S.C. § 1512(b)(1)
Count Six: Misleading Statements - 18 U.S.C. § 1512(b)(3)

Counts One, Two and Three of the indictment charged Ken Beverly with participating in, and committing acts in furtherance of, a conspiracy to falsely portray Archbold Memorial Hospital as a public hospital, controlled and owned by a governmental authority, in order to qualify for additional Medicaid funds. In fact, Archbold Memorial Hospital is, and always has been, a private, not-for-profit hospital. Defendant Beverly conspired with former CFO William Sellers to create fictitious documents showing the City of Thomasville Hospital Authority owned and controlled Archbold Memorial Hospital. Beverly directed Sellers to send these fraudulent documents to the Georgia Department of Community Health in order for Archbold Memorial to receive funds as a public, rather than a private hospital. Federal Medicaid officials had requested proof of Archbold’s public status.

Counts Four and Five of the indictment charged Beverly with witness tampering by attempting to induce Sellers to remain silent about Beverly’s role in the conspiracy in exchange for Beverly’s efforts to protect Seller’s retirement benefits.

Count Six charged Beverly with making misleading statements in a civil deposition when questioned about the fraudulent documents.

Count One carries a maximum term of imprisonment of five years, a maximum fine of $250,000.00, and three years supervised released. Counts Two through Six each carry a maximum term of imprisonment of 20 years, together with supervised release of three years, and a maximum fine of $250,000.00, per count.

Defendant Beverly remains released on bond pending sentencing, which is expected to take place in about sixty days at a time set by the court.

This case was prosecuted by the Assistant United States Attorney Jim Crane, together with Federal Bureau of Investigation Special Agent Steve McDermond.

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Pair Sentenced to Prison for Conspiring to Defraud Automobile Sealerships and Banks

BENJAMIN WADE ELLIOTT, 26, of Winchester, Tennessee, and CONNIE LEE BUCE, 42, of Woodstock, Georgia, were sentenced February 25 by United States District Judge Thomas W. Thrash, Jr. on charges relating to a conspiracy to defraud more than 500 automobile dealerships and numerous banks throughout the United States of millions of dollars.

United States Attorney David E. Nahmias said of the case, “These defendants, who were in the business of providing direct-mail advertising services to automobile dealerships, stole millions of dollars from their customers by electronically debiting their bank accounts without authorization. This type of criminal activity represents a threat to our banking system, and the people who think they can get away with this type of electronic fraud face the very real possibility of ending up in a federal prison, where there is no parole."

ELLIOTT was sentenced to serve 9 years in federal prison to be followed by 5 years of supervised release, and ordered to pay $4.28 million in restitution, and BUCE was sentenced to serve 4 years, 3 months in federal prison to be followed by 3 years of supervised release and also ordered to pay the $4.28 million in restitution. ELLIOTT was convicted of these charges on October 30, 2008, and BUCE was convicted of these charges on November 17, 2008, after each entered a guilty plea.

According to United States Attorney Nahmias and the information presented in court: From July 2006 through January 2007, ELLIOTT owned and operated “300 UP Promotions, Inc.” (300 UP), a Georgia corporation that sold direct-mail advertising services to automobile dealerships. BUCE was the company’s Chief Financial Officer. The dealerships paid 300 UP in full, by check, before any advertising services were provided by 300 UP. Although the dealerships did not authorize 300 UP to debit their bank accounts electronically, ELLIOTT and BUCE stole millions of dollars from the dealerships’ bank accounts through the use of Automated Clearing House (“ACH”) debits. Most of the dealerships promptly reviewed their bank statements and notified their banks of the unauthorized ACH debits. As a result, those banks credited the dealerships’ accounts for the unauthorized debits, but the banks were not able to recover the funds from ELLIOTT and BUCE. The loss to the victim lending institutions is estimated at $9 million. ELLIOTT and BUCE attempted to steal an additional $21 million but were thwarted when some of the victims complained to ACH about the unauthorized debts.

This case was investigated by Special Agents of the Federal Bureau of Investigation.

Assistant United States Attorney Russell Phillips prosecuted the case.

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National Auto Fraud and Theft Prevention System Goes Live

The U.S. Department of Justice today announced the availability of an online computer system to help protect states and consumers from automobile fraud and to provide law enforcement with new tools to investigate fraud, theft, and other crimes involving vehicles. The National Motor Vehicle Title Information System, or NMVTIS, will be available for consumers on January 30, 2009 and will be accessible through third party, fee-for-service websites. The Office of Justice Programs’ (OJP) Bureau of Justice Assistance (BJA) administers NMVTIS in coordination with the Federal Bureau of Investigation (FBI).

The system allows state motor vehicle administrators to verify and exchange titling and brand data and provides law enforcement officials, consumers, and others with critical information regarding vehicle histories. Consumers now have access to the vehicle’s brand history, odometer data, and basic vehicle information and can be redirected to the current state of record to access the full title record if available. Law enforcement can track the vehicle’s status from state to state by accessing the system directly.

According to the National Insurance Crime Bureau, car theft is a profitable business generating nearly $8 billion a year. Along with implementing this system, the Department has outlined the various responsibilities and reporting requirements for states, auto recyclers, junk yards and salvage yards, and insurance carriers. The Department has designed the system consistent with federal law that requires that the system be paid for through user fees and not dependent on federal funding.

Since 1997, the Department of Justice has committed over $15 million to assist states and other stakeholders in the implementation of NMVTIS. Currently, NMVTIS has the participation, or partial participation, of 36 states. Ultimately, with full participation from all 50 states and the District of Columbia, NMVTIS will prevent stolen motor vehicles, including clones, from entering into interstate commerce; protect states and consumers from fraud; reduce the use of stolen vehicles for illicit purposes including fundraising for criminal enterprises; and provide consumer protection from unsafe vehicles. In research conducted by the Logistics Management Institute, the system is estimated to save taxpayers between $4 and $11 billion each year. For further information on NMVTIS, visit www.nmvtis.gov.

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