Former SEMO Health Network CEO gets 33 months for conspiracy

Editor's note: Southeast Missouri Health Network, which is a series of medical offices throughout the region, should not be mistaken for the Cape Girardeau-based SoutheastHEALTH, which includes Southeast Missouri Hospital.

The former CEO of Southeast Missouri Health Network Inc. has been sentenced to 33 months in prison on a conspiracy charge, and three other former employees face criminal charges in connection with the case.

In April, Cheryl Ann White, 56, of New Madrid, Missouri, pleaded guilty in federal court to conspiracy to submit false documents.

In her plea, she admitted she falsified grant paperwork, misused funds and violated federal regulations in awarding a contract to the owner of a Jackson-based construction firm.

In U.S. District Court in St. Louis on Wednesday, U.S. District Judge Carol E. Jackson sentenced White to 33 months in prison.

Federal court documents indicate White must surrender to prison after Nov. 1. Once she completes her prison term, she will be on supervised release for three years.

Jackson also ordered White to pay more than $103,000 in restitution.

SEMO Health Network, a not-for-profit organization, provides health-care services in the Southeast Missouri towns of Benton, Bernie, Kennett, Matthews, New Madrid, Portageville, Senath and Sikeston.

The charging document accused White of conspiring with three SEMO Health Network employees and the construction firm owner -- identified in court records only as "B.M." -- to obtain federal grant funds for personal use.

Federal court records show White's former executive assistant, Kimberly Crawford, 49; former SEMO chief financial officer Christa Tucker, 42; and former grants manager Ann Lawrence, 44, were charged July 15 with one count each of converting public money, property or records to their own use.

As of Wednesday, B.M. had not been charged with any crime.

In an email Wednesday, Jan Diltz of the federal prosecutor's office declined to speculate on whether any additional charges might be filed in the case.

Crawford, Lawrence and Tucker all are accused of accepting gifts from White for their personal use, despite knowing White had purchased the items with a SEMO Health Network credit card, charging documents state.

Additionally, Lawrence is accused of helping White conceal payments she wanted to receive in violation of the organization's policies.

"As the CEO, Cheryl White was not eligible to receive bonus payments for identifying grants for which SEMO could then apply," the charging document states. "The defendant and Cheryl White agreed that SEMO checks would be made payable to the defendant, who would split the payments with Cheryl White."

As part of this agreement, Lawrence received a payment of $934.50 that had not been authorized by the organization and violated its policies, the document states.

If convicted, Crawford, Lawrence and Tucker could face up to a year in prison, a fine up to $1,000 and a year of supervised release.

SEMO Health Network's attorney, Edward T. Waters, has said the organization receives 25 percent of its funding from federal grants, 25 percent each from Medicare and Medicaid and 25 percent from private insurance and patients who pay for their own services.

Reached by telephone Wednesday, Waters said he does not yet know whether White's conduct will compromise the organization's ability to secure funds in the future, but it is working with federal funding agencies in hopes of preventing that.

"There have been no adverse actions ... by any federal or state agency," Waters said. "That doesn't mean there won't be, but we're hopeful."

He said the organization is taking steps to protect itself from fraud in the future, including tightening its governance policies, revising its bylaws and procurement policies, training staff on appropriate behavior and conducting audits.

Policies are not foolproof, however, Waters said.

"If somebody wants to be a crook, you can have all the policies you want," he said.

Waters said White circumvented existing policies and tricked the organization's board of directors.

"I think the people left there -- I'm very impressed in terms of the board," he said. "First, the board is made up of local, very reputable people who, if they'd known about this, would have never condoned it. They were duped."

In pleading guilty, White admitted she:

• Falsified data, including the number of patients needing and receiving services, in grant reports and applications.
• Used SEMO Health Network funds to pay for a roof on a building she owned.
• Concealed her ownership of a building and trailer she sold the organization.
• Used SEMO Health Network funds to buy personal gifts for other people, including some of her co-conspirators.
• Awarded B.M. contracts for all of SEMO Health Network's construction and renovation work, despite knowing some of his earlier work had major problems, including leaking roofs and cracked slabs.
• Falsely certified the organization had spent $150,000 for medical equipment that never was purchased.

"I think she has ruined her life," Waters said of White, noting a federal conviction will damage her reputation and make it difficult for her to find employment once she completes her prison sentence.

"She is paying a huge price for a new roof on her building and that other crap. ... I think the implications for her go much beyond time in jail," he said.

Federal court records listed no attorney for Crawford. Attorneys for Lawrence, Tucker and White did not immediately return telephone calls seeking comment Wednesday afternoon.

epriddy@semissourian.com

388-3642

Pertinent address:

New Madrid, Mo.