Former SEMO Health Network CEO pleads guilty to conspiracy

The former CEO of Southeast Missouri Health Network pleaded guilty to a conspiracy charge Monday in federal district court in St. Louis.

Court records show Cheryl Ann White, 56, of New Madrid, Mo., pleaded guilty to falsifying grant paperwork, misusing funds and violating federal regulations in awarding a construction contract to a co-conspirator identified in court documents as "B.M.," the owner and operator of Jackson-based Moore Mechanical Contracting LLC.

SEMO Health Network, a not-for-profit organization providing health care services in the Southeast Missouri towns of Benton, Bernie, Kennett, Matthews, New Madrid, Portageville, Senath and Sikeston, 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, said Ted Waters, an attorney representing the organization.

"These health centers are located in medically underserved areas," he said. " ... They are crucial to the delivery of health care."

White's behavior could compromise the organization's ability to secure federal funds in the future, but Waters said SEMO Health Network is working with its federal funding agencies to try to prevent that.

"Once new management took over and we've been involved, (we've) tried to be incredibly transparent," he said. "We have nothing to hide. ... I think we have fixed most of the problems. They're embedded problems that we've inherited."

The charging document accuses White of conspiring with B.M. and three SEMO Health Network employees to obtain federal grant funds for personal use.

Among the allegations:

* White and her co-conspirators falsified data, including the number of patients needing and receiving services, the number of tests and procedures performed and the availability of other health care providers in the area, and directed her executive assistant to falsify letters of support for SEMO Health Network.

* White contracted with Moore Mechanical to build a $486,221 clinic in Bernie in 2010, despite B.M. having been involved in developing contractor specifications for the project. Federal regulations exclude contractors from submitting bids on projects for which they have developed specifications or requirements.

* White falsely stated SEMO Health Network had hired an engineering firm "to provide design and construction administration services" for the Bernie project, and she and B.M. signed a certificate bearing the forged signature of a representative of that firm, asserting the work had been inspected and was "substantially complete." The representative had not been involved in or inspected the project and had not authorized anyone to sign his name to the document.

* White submitted certificates falsely claiming SEMO Health Network had used grant funds to buy more than $300,000 worth of equipment and instructed employees to move equipment from one location to another in an attempt to thwart auditors.

* White had SEMO Health Network pay B.M. to replace the roof on a building she owned adjacent to one of the network's billing offices.

* White later sold this building to its previous owner, who sold it to SEMO Health Network on the same day and then gave White's husband $27,000.

* White and B.M. agreed to have SEMO Health Network buy a building in Sikeston. B.M. did not own the building at the time, but before the board could approve the purchase, a $10,000 check was issued to B.M., who bought the property about a month later for $280,000, then sold it to SEMO Health Network for $320,000. B.M. received another $20,000 to renovate the property.

* About a month after SEMO Health Network bought the Sikeston building, B.M. gave White $10,000, later disguised as a loan, and -- after White received a federal subpoena requesting documents related to gifts or loans received from B.M. -- signed a promissory note saying he had loaned the money to White's husband.

* White awarded more than $2 million worth of contracts to B.M. for all of the organization's construction and renovation work, despite knowing some of his earlier work had major problems, including leaking roofs and cracked slabs.

* White used a SEMO Health Network credit card to buy personal items and services for herself and two co-conspirators and allowed others to use the cards for personal charges as well.

* White concealed her ownership of a trailer she wanted to sell the organization, authorizing a check payable to another employee. She instructed the employee to endorse the check and give her the money.

The federal felony charge carries a maximum penalty of five years in prison and/or fines up to $250,000. Sentencing is set for July 30.

White's attorney, W. Perry Brandt, declined to comment Tuesday on her guilty plea.

No one answered the phone Tuesday afternoon at Moore Mechanical Contracting, and messages seeking comment were not returned.

In December, the Sikeston Standard-Democrat reported White no longer was affiliated with SEMO Health Network, where she had been CEO since 2003. The news came just a month after FBI agents executed a search warrant at the organization's administrative office in New Madrid.

epriddy@semissourian.com

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