State investigators have filed a new misdemeanor charge against New Beginnings Behavioral Health Service chief executive Chirie Bazzelle, accusing her of lying to authorities despite promising to cooperate with a Medicaid fraud investigation.
Bazzelle, 46, in April pleaded innocent to felony Medicaid-fraud and attempted-tax-evasion charges filed by Attorney General Leslie Rutledge's office. Rutledge announced the additional misdemeanor Medicaid-fraud charge on Thursday.
At the core of the accusation is Bazzelle's opening of a new Medicaid-enrolled mental-health clinic in Cleveland County in 2015, the probable-cause affidavit shows. A then-7-year-old statewide moratorium prohibited new clinics unless the Department of Human Services granted a waiver.
Bazzelle, who lives in Benton, told investigators in June 2018 that she was not aware of efforts by then-state Sen. Jeremy Hutchinson and then-Arkansas lobbyist Milton "Rusty" Cranford to obtain such a waiver on her behalf until after the fact.
The charging document, however, says Bazzelle both edited the letter Hutchinson sent to the state agency and replied to an email Cranford sent beforehand that asked: "Are we ready for this?"
"Of course we are, Let's build the empire," Bazzelle replied, according to the affidavit.
The Behavioral Health Services Division granted the waiver in 2015, allowing Bazzelle to open the Cleveland County location. The address was listed as Rison, which is about 25 miles southwest of Pine Bluff.
Last year, Bazzelle signed a "proffer" agreement with the Medicaid Fraud Control Unit, a component of Rutledge's office. Authorities offered her immunity from state charges regarding any statements she made during the interview as long as she told the truth.
The proffer was first disclosed two months ago in the affidavit accusing Bazzelle of felony Medicaid fraud.
Sylvester Smith, Bazzelle's defense attorney, did not return a message left Thursday at his office. When asked in April about the interview with investigators, Smith said: "Sometimes our memories fail us."
"My client stands behind the things she said in her proffer, and she spoke truthfully to the best of her ability," he added.
Online court records show that Bazzelle's arraignment on the misdemeanor charge was scheduled for Wednesday of this week.
"Criminals who steal from Arkansans and lie during investigations must be held accountable," Rutledge said in a news release.
On the felony Medicaid fraud charge, Bazzelle is accused of not reporting contracts with Cranford and former Preferred Family Healthcare Inc. executive Robin Raveendran, according to an 11-page affidavit.
Preferred Family, based in Missouri and formerly known as Alternative Opportunities, was at one time Arkansas' largest provider of behavioral health services. It has been at the center of a federal investigation spanning Arkansas and Missouri into bribery, embezzlement, kickbacks and fraud.
Raveendran worked for the Human Services Department for 30 years and was working in the Office of the Medicaid Inspector General when he retired in February 2014. Within three months, he was working as a vice president for Preferred Family and a consultant for New Beginnings, according to the affidavit.
Medicaid rules required Bazzelle to "disclose any subcontractors being paid over $25,000 a year," the document says. Cranford collected $5,000 a month from New Beginnings for lobbying from 2009-2014, the affidavit says. Beginning in 2014, Bazzelle paid Cranford and Raveendran at least 5% of the company's weekly Medicaid earnings, it says.
Separately, Rutledge's office charged Raveendran and other former Preferred Family employees with Medicaid fraud over improper billing processes investigators accused Raveendran of ordering. Raveendran's case is pending.
Cranford pleaded guilty in June 2018 to a federal bribery charge on accusations he paid Arkansas lawmakers in exchange for favorable legislative treatment for Preferred Family, where he worked as the director of operations in this state. Two other former Preferred Family executives have pleaded guilty to federal crimes.
The nonprofit's former chief financial officer and chief operating officer, the married couple Tom and Bontiea Goss, were charged last month alongside Jeremy Hutchinson in a 32-count federal indictment.
The Gosses and Hutchinson pleaded innocent to all charges, which included criminal conspiracy, bribery, theft and honest-services fraud.
Bazzelle in May filed a lawsuit against Hutchinson. The lawsuit says he failed to do contracted legal work on her personal-injury case and did not disclose to her that he simultaneously represented Raveendran. This posed a conflict when she asked Hutchinson to resolve a dispute between New Beginnings and Raveendran, the lawsuit says.
Bazzelle's lawsuit says Raveendran "duped" her into underwriting an association he formed called Alliance for Health Improvement and that New Beginnings was "defrauded" by Cranford and Raveendran.
Bazzelle also faces a felony charge of attempted tax evasion. She is accused of underreporting her income by a total of $487,525 in 2014 and 2015. She filed amended tax returns for both years in May 2017 after learning about an investigation, the affidavit says.
The Department of Human Services suspended New Beginnings from participating in the Medicaid program in April.
Metro on 06/07/2019