The Arkansas Department of Human Services on Monday identified Ted Suhl, who owns mental-health companies that receive Medicaid funds in the state, as a person whom federal court papers accuse of providing bribes to a former deputy director at the agency.
Suhl was named in a written statement from the Human Services Department as a person whose identity was withheld from court documents involving Steven B. Jones, the former deputy director, who pleaded guilty last week to bribery concerning programs that receive federal funds and to a charge of conspiracy related to the bribes.
Jones, 49, admitted in federal court to accepting cash and other favors, such as meals, in exchange for using his position to benefit the owner of two companies that receive public funds and provide inpatient and outpatient mental health care.
Jones was the only person identified by name in his plea agreement and related court documents. The rest of the companies and people who authorities said were involved in the bribery scheme were referred to only by generic descriptions in court documents.
On Monday, Human Services Department spokesman Amy Webb said the agency had identified Suhl as the person referred to in the court papers as "Person C," whom prosecutors described as the business owner accused of directing cash payments to Jones.
Webb said the agency is now looking into whether it should suspend Suhl's companies from receiving Medicaid funding.
"We have determined that Person C is Ted Suhl, who owns behavioral health companies that provide inpatient services to youth and outpatient services to youth and adults in Arkansas. We have not determined whether the allegations specific to Mr. Suhl are true," Webb wrote in the statement released to news agencies, including the Arkansas Democrat-Gazette, in response to questions about Jones' case.
"However, federal and state law authorizes us to suspend or exclude a provider engaging in the alleged conduct described in the federal court filings, and we will pursue all appropriate actions to protect the integrity of the Medicaid program," Webb added.
Webb said the agency couldn't confirm whether the two companies referred to in Jones' plea agreement were Trinity Behavioral Health Care in Warm Springs and Maxus Inc., which does business under the name Arkansas Counseling Associates. But the agency is reviewing those companies in regard to Suhl's eligibility to receive Medicaid payments.
Suhl has not been charged with any crimes related to the investigation into Jones, which was led by the FBI.
On Monday, Suhl's attorney Michael Scotti, a partner at Chicago law firm Freeborn & Peters, said that Suhl denied any wrongdoing and was unaware of the investigation into Jones until it became public last week.
"I've met with the general counsel of the Department of Human Services twice today, and we're cooperating with them in their decision-making process regarding the guilty plea of their former deputy director Steven Jones," Scotti said. "Mr. Suhl categorically denies any allegations of wrongful conduct arising out of that guilty plea, so we're hopeful that we can cooperate with DHS to avoid any interruption of services for the kids he cares for at both Trinity Behavioral Health Care and Arkansas Counseling Associates."
Scotti said that the Suhl hasn't been contacted by the office of the U.S. attorney for the Eastern District of Arkansas since Jones entered his plea.
A phone message left for Jones' attorney, Michael Booker, wasn't returned by close of business Monday.
'Person C'
In Jones' plea agreement, federal prosecutors wrote that Person C owns two mental health companies -- identified as "Company A" and "Company B" -- that Jones provided with official assistance and internal information in exchange for cash payments totaling at least $10,000 that Person C funneled through intermediaries.
The intermediaries were identified by prosecutors as "Person A," a pastor and superintendent of a West Memphis church, and "Person B," a former Crittenden County juvenile probation officer and West Memphis city councilman.
According to Jones' plea agreement and related court documents, Person C would give checks to the former probation officer or the pastor that were made out to the pastor's church. The checks would then be handed off by the probation officer to the pastor, who would deposit the money into "church-related checking accounts (including an account associated with the church's child development center)," court documents state.
The pastor would then withdraw money from either a church account or move it to his personal account and then withdraw it. He would then give all or a portion of that money to the probation officer, or on at least one occasion, give the money directly to Jones, according to the court documents.
"Jones and Person C used [the probation officer] as an intermediary to relay messages, schedule meetings, and deliver bribe payments from Person C to Jones," prosecutors wrote in Jones' plea agreement.
They also noted that Jones met with Persons B and C at a Memphis restaurant in September 2011 where Person C used a business credit card to pay for the meal costing $189.64.
Person B also later met with Jones in November 2011 at a West Memphis restaurant, where he accepted $1,000 in cash that he "believed to be a bribe" from Person C, according to court documents, which note that the meeting was "surveilled and consensually recorded."
Webb said Monday that FBI agents talked with Human Services Department staff members in April but didn't disclose that Jones was being investigated. At the time, the FBI asked the agency not to take any formal action against the companies involved in the investigation, Webb said.
After Jones pleaded guilty last week, the U.S. attorney's office met with Human Services Department officials, but neither prosecutors nor the FBI would confirm for the agency that Suhl was "Person C," Webb said.
Instead, the agency determined Suhl's identity on the basis of its own review of its records regarding his companies over the past few days.
"When you have a Medicaid provider that is alleged to have been involved in that behavior ... we have to identify who that was so we could take action," she said, noting that federal authorities have not notified them of any other allegations that would require a wider internal review.
The Human Services Department was still working Monday evening to determine how much Medicaid funds Suhl's companies have received over the past few years, Webb said.
Continuing investigation
Trinity Behavioral Health Care currently provides inpatient mental health services to 80 youths who are Medicaid beneficiaries. Maxus Inc., also known as Arkansas Counseling Associates, provides outpatient services to about 2,500 current Medicaid beneficiaries, both youths and adults, Webb said.
The agency hasn't decided whether it will suspend or exclude Suhl's companies, but it is reviewing whether that action is warranted in light of the allegations made in Jones' plea agreement, Webb said.
"If we suspend him, it would be based on essentially the rule that says you can suspend based on a credible allegation of fraud and that fraud would be specifically what is referenced in the federal court records," Webb said.
In the event of a suspension or exclusion from receiving Medicaid funds, the Human Services Department would work with the companies to transfer the beneficiaries to other providers. Beneficiaries would receive notices from the agency that included information on how to continue their care at other providers.
The Human Services Department also could refer the companies to the office of Medicaid inspector general for further investigation, Webb said.
Webb said Human Services Department officials didn't know the entirety of the information or assistance Jones provided in exchange for cash payments.
In his position as deputy director, Jones didn't directly oversee the agency's Medicaid section, but he was involved in meetings regularly that could have affected Suhl's companies.
"We do know given his position that he was privy to internal reviews, audits, things of that nature where we may have been taking action or considering action against those companies and competing companies," Webb said.
On Monday, Deb Green, a spokesman for the FBI's Little Rock field office, said that she couldn't confirm the identities of any companies or people referred to in Jones' plea agreement.
Cherith Beck, spokesman for Chris Thyer, the U.S. attorney for the Eastern District of Arkansas, said that she also couldn't confirm that Suhl was Person C or elaborate on the identities of others involved in the allegations contained in Jones' plea agreement.
When asked if Jones was the only person to be charged as a result of the FBI investigation, Beck said she could only say the investigation was ongoing.
Previous questions
Questions have been raised before by state legislators and news organizations such as the Arkansas Times regarding Suhl's mental health care business, political connections and Medicaid money.
In 2006, legislators questioned Suhl about an increase of more than $8 million over a five-year period in Medicaid funds that had been paid to another of his facilities, the religious-based youth home known as The Lord's Ranch in Warm Springs. Legislators also questioned Suhl about an airplane he let former Gov. Mike Huckabee use for a trip to a Republican Party event in North Carolina, which the Times uncovered.
Suhl told the legislators that the increase in funding was because of the state expanding the types of services it would pay for with Medicaid dollars. He said the plane was provided by another company he was involved in that was located out of state.
Jones, the former Human Services Department deputy director, was paid $117,615.06 in that position and oversaw the divisions responsible for Aging and Adult Services, Youth Services, Childcare and Early Childhood Education, Community Services and Nonprofit Support, and Services for the Blind. He served as deputy director from 2007 through 2013.
Before that, he was a state representative from 1998 through 2004. His sentencing hearing is scheduled for April.
Information for this article was contributed by Aziza Musa of the Arkansas Democrat-Gazette.
A Section on 10/07/2014