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Ex-lobbyist gets 7 years for role in Arkansas corruption scheme

by Doug Thompson | November 26, 2019 at 7:15 a.m.
Milton "Rusty" Cranford

SPRINGFIELD, Mo. -- Former lobbyist Milton "Rusty" Cranford received a seven-year prison sentence Monday for his role in a bribery scandal that also led to the convictions of five Arkansas legislators.

The investigation is not over, federal officials have said.

Property former lobbyist Milton “Rusty” Cranford must turn over, per his sentencing:

• $17,989 in cash seized at the time of his

• His $95,034 share of the sale of property at 432 Sorrento Drive in Osprey, Fla.

• His share of the property at 2004 Boca Chica Ave. in North Port, Fla. No value was given.

• His $45,667 share of property at 832 E. Hilltop Drive in Rogers.

• Another $500 in cash of Cranford’s in the possession of the government.

At this time the federal government isn’t seeking forfeiture of Cranford’s property in Douglasville, Texas, but that may change, according to the filing.

Cranford appeared before U.S. District Judge Brian Wimes in Springfield because that is where his former employer, Preferred Family Healthcare, is based.

Cranford spent almost $4 million making illegal campaign donations, kickbacks and other gifts to Arkansas lawmakers between 2011 and 2017 to ensure the nonprofit behavioral health provider received grants, favorable legislation and relief from scrutiny, according to his guilty plea.

Company executives also committed Medicaid fraud to overcharge state taxpayers, according to guilty pleas and indictments in the case.

From fiscal 2011 to 2018, Preferred Family received $245 million from Arkansas in Medicaid payments, one-third more than the state's second-largest behavioral health provider during that time, according to state data.

Cranford and other executives embezzled from the nonprofit, according to federal prosecutors.

Cranford alone is liable for returning $3.73 million in taxpayer money, Wimes ruled Monday. Wimes approved forfeiture of most of Cranford's remaining assets, but the total is likely a fraction of the $3.73 million, the judge was told during Monday's hearing.

"I would like to say I'm sorry for anyone hurt by my bad choices," Cranford told the judge.

He added that he was deeply sorry for the consequences of his choices on his three children, one of whom is a minor with autism and another who has serious behavioral health issues, according to previous court testimony.

Wimes agreed to Cranford's request to serve his sentence at the federal prison in Texarkana, Texas, so his children could visit him from where they live in Bodcaw in Nevada County.

The judge noted that the sentence could have been longer. Cranford faced up to 10 years in prison.

"I hope this helps others to realize that they should help weed out not only corruption, but other crimes," Wimes said. "This is not a light sentence, but it is a heck of a lot lighter than it could have been."

Wimes stressed to Cranford that he was getting a great deal of benefit for his cooperation after committing a serious crime.

"Bribery fosters the impression the government is up for sale to the highest bidder," the judge said. Therefore, it has severe consequences that extend beyond those directly affected, he said.

Claiborne Ferguson, a Memphis-based federal criminal defense attorney who is not affiliated with the case, said the seven-year sentence is "pretty darn high" for a nonviolent crime.

"It's definitely going to send a message of deterrence," said Ferguson, who practices in Arkansas, Mississippi and Tennessee.

Cranford, 60, has been in the Greene County, Mo., jail in Springfield since his Feb. 21, 2018, arrest at his home in Bentonville. He was denied bail in March 2018 in part because he discussed having a co-conspirator killed before his arrest.

Wimes gave Cranford credit for the 22 months he has been in jail. He also sentenced him to three years of probation to begin after he serves his prison sentence.

Cranford pleaded guilty to one count of federal program bribery on June 7.

He took orders from Tom and Bontiea Goss of Springfield, married, former executives at Preferred Family, according to court records. The couple is set to stand trial on related charges in April 2021.

Preferred Family was a nonprofit health care company based in Kirksville, Mo., untouched by scandal before it merged with Alternative Opportunities in 2015. The company has used the name Preferred Family since.

Alternative Opportunities was founded by the Gosses. Tom Goss was chief financial officer, and Bontiea Goss was chief operating officer of Preferred Family before being dismissed by the company's board in November 2017, after U.S. Justice Department attorneys met with the company's board of directors and legal counsel to brief them on the investigation's findings to that date.

An attorney for Bontiea Goss did not respond to requests for comment.

Springdale attorney Chris Plumlee, representing Tom Goss, said: "My client doesn't have anything to say at this time above and beyond comments previously provided."

COOPERATION NOTED

Cranford became both a manager of and lobbyist for Alternative Opportunities in Arkansas in 2007. Cranford's contract with the nonprofit company was terminated on June 2, 2017, after news of the scandal broke with the indictment of Arkansas lawmakers earlier that year.

Preferred Family operated substance abuse and behavioral health treatment centers in five states, including Arkansas. It had 47 sites in Arkansas alone before having to sell them off after losing its Medicaid certification in the state during the federal public corruption probe.

Since his guilty plea, Cranford has appeared before federal grand juries three times, met with federal investigators 10 times and has also met with investigators for the state of Arkansas, federal prosecutors said at a hearing last month.

Cranford's cooperation was vital in obtaining indictments against almost everyone arrested so far in the fraud scheme, according to his defense attorney, Nathan Garrett of Kansas City, Mo.

Assistant U.S. Attorney Ben Wulff, who represented the government at Monday's sentencing, confirmed that Cranford's cooperation has been both extensive and valuable to investigators. That is why the government entered a joint motion with the defense recommending the seven-year sentence rather than the maximum, despite the severity of the crimes involved, Wulff told the judge.

Should Cranford testify at a trial in the future, prosecutors could go back to Wimes and ask that his sentence be reduced, Ferguson said.

"He could still potentially be working towards further reductions in that sentence depending on what his role is in these future case," the Memphis-based attorney said, referring to Rule 35 of the Federal Rules of Criminal Procedure.

The rule allows the government to request a sentencing trim for specific reasons. One of those reasons is for information provided by a defendant that the government uses down the road.

Wulff is assigned to the U.S. Department of Justice's Western District of Arkansas, but was representing the government by arrangement with the Western District of Missouri, where Cranford was charged.

Both the Eastern and Western districts of Arkansas have joined the Missouri district in the ongoing investigation. Marco Palmieri of the Public Integrity Section of the U.S. Department of Justice was also present during the sentencing.

LAWMAKERS IN SCHEME

Four of the five lawmakers convicted of conspiracy-related charges in the case were serving in the Legislature at the time of the bribes. The fifth joined Cranford's lobbying firm and took part in the scheme as a lobbyist after leaving office. Those are former Rep. Micah Neal and former Sen. Jon Woods, both Springdale Republicans; former Rep. Eddie Cooper, D-Melbourne, who joined Cranford's lobbying firm; former Rep. Henry "Hank" Wilkins IV, D-Pine Bluff; and former Sen. Jeremy Hutchinson, R-Little Rock.

Woods is serving an 18-year prison sentence for a kickback he took in return for a state grant he steered to a company Cranford controlled, along with other kickbacks taken from grants to Ecclesia College in Springdale. Cranford played no role in the Ecclesia kickbacks.

Now-former Ecclesia President Oren Paris III of Springdale, who pleaded guilty to conspiracy, is serving a three-year prison sentence. A private consultant for Ecclesia, Randell Shelton, is serving a six-year sentence for his part in that scheme. All three of those cases are on appeal.

Marilyn Nolan, former chief executive officer for Preferred Family, has also pleaded guilty in the federal investigation along with the company's former chief of clinical services, Keith Fraser Noble. Both those executives are from Springfield.

All of those charged who have pleaded guilty in the two-state federal probe await sentencing except Cranford. Woods was convicted at trial. Other former Preferred Family administrators in Arkansas also face state charges in Arkansas for Medicaid fraud.

Cranford's arrest came after a Missouri federal grand jury indicted him on one count of federal program bribery and eight counts of accepting bribes.

The murder-for-hire allegation against Cranford never resulted in any charges. Cranford accomplice D.A. Jones, a lobbyist based in Philadelphia, informed Cranford in late 2017 he was going to confess and plead guilty in the federal investigation of the fraud scheme.

Cranford later approached a longtime acquaintance and told him Jones needed to "disappear," according to court documents. The supposed hit man has not been named publicly in federal court documents. Unbeknownst to Cranford, the man he approached had already agreed to be an FBI informant in another matter, federal prosecutors have said.

Cranford first registered as a lobbyist in Arkansas in 2005, secretary of state records show. His lobbying firms over the years include Cranford and Associates and the Cranford Coalition.

A Section on 11/26/2019

Print Headline: Ex-lobbyist gets 7 years for role in Arkansas corruption scheme

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