Prosecution witnesses continue in hospital fraud trial

By Errol Castens/NEMS Daily Journal

OXFORD – U.S. Senior District Judge Neal Biggers started court Thursday morning by scolding prosecutors for waiting until most of their lead witness’ testimony was done before asking that the 26-count indictment against him be unsealed.
David Chandler, who has pled guilty to two of those counts and agreed to cooperate with prosecutors, had been the sole witness for the first two days of the criminal trial of Ray Shoemaker of Tupelo and Lee Garner of Batesville. The government is arguing, among other charges, that Garner gave bribes to Chandler and that Chandler gave bribes to Shoemaker to steer hospital business to Garner’s staffing firms.
Biggers scolded, “It didn’t occur to you that this would reflect on the credibility of your star witness?” before allowing the trial to resume.
Chandler reaffirmed on redirect that the money he presented to Shoemaker, former chief operating officer and chief executive officer at Tri-Lakes, was not loaned, as Shoemaker has asserted. Chandler, a former deputy state auditor, also reasserted that the six-figure payments Garner made to him were in exchange for his influence.
Several other witnesses testified Thursday. Vicki Scruggs, a former Garner employee, testified that of dozens of client hospitals and nursing homes, Tri-Lakes was the only one over which she was not given billing and collection responsibility. Former Tri-Lakes Administrative Assistant Linda Odom said Chandler often had come into the hospital to pick up checks.
Testimony from other former and current employees of the hospital indicated that Shoemaker had approved a $250,000 check to his own company without board approval, that Shoemaker often authorized withholding payments from staffing companies other than Garner’s and that Shoemaker’s salary went from $125,000 per year as COO to $350,000 per year as CEO in the span of 19 months.
Mary Tom Vance confirmed her husband, David, was under indictment for charges related to the hospital when he was killed in an October 2010 wreck. He reportedly had been paid $600,000 as a consultant, using a company in her name, while he drew Social Security disability benefits. Vance also was indicted but said she knew nothing about her husband’s business or their finances, and the charge against her was dropped.
The trial, which began Tuesday and is expected to last possibly beyond next week, resumes today at 9 a.m.
errol.castens@journalinc.com