TEXARKANA -- Two men who failed to remit more than $6 million in payroll taxes deducted for four years from the pay of employees of Hope Medical Park Hospital in Hope pleaded guilty Thursday morning in a Texarkana federal court.
James R. Cheek, 68, of Douglasville, Ga., and Herschel J. Breig Sr., 68, of Nixa, Mo., appeared at separate hearings before U.S. District Judge Susan Hickey. Both pleaded guilty to count nine of a nine-count indictment pending in the Texarkana Division of the Western District of Arkansas that accused them of failing to make quarterly payments to the Internal Revenue Service in 2009, 2010, 2011 and 2012. Cheek and Breig pocketed Medicare, Social Security and income taxes from employee paychecks.
The men are currently serving federal prison terms for nearly identical crimes they committed at a hospital they operated in Lubbock, Texas. A federal judge in the Lubbock Division of the Northern District of Texas sentenced the men June 5, 2012, to 60 months in federal prison, to jointly pay more than $5 million in restitution and to pay a $10,000 fine.
The men are expected to receive similar sentences in Arkansas.
Assistant U.S. Attorney Jonathan Ross said the men's plea arrangements include five-year, or 60-month, terms and $6,172,134.16 in restitution jointly.
Cheek and Breig, through Shiloh Health Services Inc., acquired control of Signature Medical Park Hospital in Hope in May 2008, according to the indictment. On Dec. 19, 2008, the hospital's name was changed to Hope Medical Park Hospital.
Each of the nine counts listed in the indictment charging the men in Arkansas involve separate calendar tax quarters. While Breig and Cheek entered guilty pleas to only a single count, they will be held liable for the full amount of restitution.
Ross said the men controlled "every aspect" of the hospital's operations.
The prison terms assessed the men in Texas are scheduled to end in October. They will return to court for sentencing before Hickey in several months. The court will set the cases for formal sentencing after presentence reports, including a recommendation for sentencing under federal guidelines.
Cheek and Breig remain in federal custody.
State Desk on 09/17/2016