BENTONVILLE -- A Bella Vista man is suing a health care provider at the center of a federal corruption investigation, asking that the company be ordered to repay any ill-gotten state taxpayer money.
Attorneys for Jim Parsons filed the illegal exaction lawsuit Tuesday in Benton County Circuit Court. The lawsuit is against Preferred Family Healthcare and its subsidiaries Decision Point, Dayspring Behavioral Health Services, and Wilbur D. Mills Treatment Center.
The suit also names executives, board members or lobbyists for Preferred Family during the time in which a scheme to defraud taxpayers was in effect, according to the suit. Preferred Family is a Springfield, Mo.-based nonprofit that lost its state contracts and Medicaid eligibility after one of its top executives pleaded guilty to a multi-million dollar bribery scheme that involved several Arkansas legislators, among others.
A spokesman for Preferred Family referred questions to the company's media relations department. No response was received Tuesday. Four former executives of Preferred Family, including its former Arkansas regional executive and lobbyist Milton "Rusty" Cranford, have pleaded guilty to conspiracy charges connected to bribery and influence peddling to boost company profits.
Four former state lawmakers have been convicted of illegal kickbacks or bribe-taking involving Cranford, who has also pleaded guilty to conspiracy. The investigation is ongoing, according to U.S. Attorney Duane "Dak" Kees of the Western District of Arkansas.
Parson's lawsuit claims Preferred Family received $52.8 million from state taxpayers between 2011 and 2016, which was distributed by the Arkansas Department of Human Services' Medicaid programs. The lawsuit claims Preferred Family also received money from between 2011 and 2016 from the state's General Improvement Fund. That figure does not include federal taxpayer funds that were also included in state-administered Medicaid spending.
The lawsuit alleges a significant portion of money received by Preferred Family was in a scheme to illegally bill the state's Medicaid Program.
The lawsuit also accuses Preferred Family of engaging in a scheme to pay bribes and illegally make campaign contributions to members of the Arkansas General Assembly in exchange for steering grant money to Preferred Family and its subsidies. The scheme outlined in the lawsuit follows the particulars given in guilty pleas in the federal case.
The Northwest Arkansas Democrat-Gazette sought records of non-Medicaid payments to Preferred Family through the state's Freedom of Information Act earlier this year. Payments from non-Medicaid state accounts were $469,024 in the fiscal year ending June 30, 2012, Department of Finance and Administration records show. The payments grew to $9.66 million in fiscal 2017.
The company lost 16 state contracts and amendments to them worth a total of $28.9 million after the scandals came to light. Those contracts included sources of payments such as federal block grants, state taxpayer dollars and fees imposed by state courts on those seeking court-ordered counseling and treatment for addiction.
Parsons said the amount of any money Preferred Family illegally received could be determined at trial through evidence and testimony.
"Everything that was ill gotten money, we want it back," Parsons said. "We want it back in the state treasury to be spent properly."
Parsons said the Benton County lawsuit does not involve Ecclesia College, which was also implicated in schemes involving Cranford and two lawmakers to obtain state money. Parsons, a former Ecclesia board member, is suing the private Christian college in Washington County Circuit Court seeking return of money involved in the kickback scheme.
Metro on 11/28/2018
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