SPRINGFIELD, Mo. -- Former state Sen. Jeremy Hutchinson, the son of a former U.S. senator and nephew of a soon-to-be announced presidential candidate, received a 50-month prison sentence Tuesday in federal court for corruption.
Hutchinson is one of five former Arkansas lawmakers, along with six health care company executives and lobbyists, convicted after a federal Medicaid fraud investigation.
The 50-month sentence for a conspiracy charge in Missouri was stacked upon the 46 months Hutchinson was sentenced to in Arkansas on bribery and tax fraud charges. He now faces a total of eight years in prison.
Hutchinson served as chairman of the Arkansas Senate's Judiciary Committee, which oversees legislation regarding criminal law, from 2013 through 2018. He resigned from the Senate in August 2018 after his indictment.
"I stand before you a broken man," Hutchinson said to U.S. District Judge Brian C. Wimes in a five-minute statement during the hearing, asking for this latest sentence to run concurrently with the sentences already imposed in Arkansas.
"Other people standing before you can say they weren't raised well, that they have father wounds or mother wounds. I can't," Hutchinson said. He apologized to his family and to his constituents.
Wimes rejected Hutchinson's request, saying the then-state senator's role in the corruption scheme was key. "You were the catalyst," Wimes told Hutchinson. The scheme would not have worked without Hutchinson, Wimes said.
Executives Tom and Bontiea Goss at Preferred Family Healthcare of Springfield, Mo., conspired to hire then-state Sen. Hutchinson as an attorney for the firm, according to their guilty pleas in the case. In return, Hutchinson helped steer state contracts and grants to Preferred Family. The company's Arkansas lobbyist, Milton "Rusty" Cranford of Little Rock, hired Hutchinson as the company's attorney in 2013.
Cranford also paid kickbacks to then-Sens. Jon Woods of Springdale and Henry "Hank" Wilkins of Pine Bluff to help get state contracts and grants for Preferred Family, court records show. Then-state Rep. Eddie Cooper of Melbourne also pleaded guilty in the scheme. Then-state Rep. Micah Neal of Springdale admitted to getting a kickback in an unrelated scheme with Woods to get a state grant for a business venture by Cranford and Tom Goss.
Defense attorney Tim Dudley argued during Tuesday's hearing the sentence under consideration varied widely from what other participants in the scheme received as punishment for their crimes. Wilkins, for instance, received a sentence of a year and a day for much the same acts, Dudley said.
"He wasn't a ringleader," Dudley said of Hutchinson. Hutchinson cooperated with the investigation and provided information needed to make a case against others, Dudley said. Even Woods, who fought the charges by going to trial and received a sentence of 18 years, didn't get the full sentence he could have received under federal sentencing guidelines, Dudley said.
Hutchinson's sentence of 50 months compares to a maximum sentence of 60 months under the guidelines and a sentence of 51 months recommended by the government.
The purpose of sentencing is to deter others from committing crimes, Dudley argued. "If you had told him he was going to lose his law license, see himself and his family humiliated and have to resign from the Senate, he would not have done this even if there was no sentence at all," Dudley said.
Hutchinson awaited sentencing for four years as the related cases worked their way through the courts, Dudley said. The case against the Gosses, for instance, suffered repeated delays because of the covid pandemic, court records show. Unable to practice law and having pleaded guilty to crimes, Hutchinson had to take any job he could get, working as a yard man and a driver for an online ride-hailing company, Dudley said.
Special Assistant U.S. Attorney Stephanie Mazzanti argued Hutchinson's cooperation wasn't as forthcoming and valuable as others, and Wilkins, for instance, had health issues to consider in sentencing.
Hutchinson leaned his forehead upon his clasped hands, eyes closed and with elbows on the defendant's table, as Wimes pronounced that the sentence would run consecutively. Hutchinson has the option to appeal the sentencing, Wimes said from the bench. Dudley said after the decision no appeal decision had been made. Barring appeal, Hutchinson will begin serving his sentence when space becomes available in federal prison, as ordered in his Arkansas convictions, Wimes ruled.
In addition, Wimes levied a financial penalty of $468,125, mainly for restitution, and imposed three years of probation after Hutchinson serves his sentence.
Preferred Family and its subsidiaries received $245 million in Medicaid payments for mental health services in Arkansas for fiscal years 2011-2018 while at least some part of the scheme was in operation, state records show. These payments amounted to one-third more than what the second-ranking behavioral health care provider received during that time, state records show.
An estimated $20 million of taxpayer money in all went to bribes and kickbacks to those involved in the scheme, according to court records.
At its peak, Preferred Family collected $43.9 million in 2016 from the state's Medicaid-funded mental health program -- one in every seven dollars the program spent that year.
The Gosses used Preferred Family money to provide interest-free loans to their for-profit businesses and pay marked-up vehicle leasing fees to one of their companies, according to court records. Over four years, the nonprofit paid $2 million to lease the vehicles from the Gosses' company, which had leased those vehicles from another company for $1.1 million.
Preferred Family, according to court records, also paid for charter flights from Springfield to the Gosses' second home in Colorado.
Preferred Family contracts were canceled in 2018 by the state at the insistence of then-Gov. Asa Hutchinson, Jeremy Hutchinson's uncle. Jeremy Hutchinson's father is Tim Hutchinson, who served as U.S. senator for Arkansas from 1997 to 2003.
Asa Hutchinson is set to announce his bid for U.S. president at an event in downtown Bentonville at 10:30 a.m. today.
Preferred Family's board of directors cooperated fully in the federal investigation after the scheme came to light, U.S. Justice Department officials have said. The company later agreed to pay $8 million in settlements with the state of Arkansas and federal governments.
Jeremy Hutchinson pleaded guilty in 2019 to one count each in three federal judicial districts -- Western and Eastern in Arkansas and Western Missouri -- on charges including accepting bribes and tax fraud. His sentencing remained on hold while he waited to testify in the Gosses' trial. Then the couple entered a plea agreement in September.
Woods and Neal were charged in connection with a $400,000 state grant steered to Cranford and intended to benefit a business venture by Tom Goss. Goss paid the state back after federal investigators began looking into the grant.
Woods was convicted May 3, 2018, of 15 counts of public corruption and is serving 18 years in federal prison. According to the Bureau of Prisons, Woods is scheduled for release in mid-2033. Neal cooperated with the investigation. He pleaded guilty and served one year of home detention. Cranford was sentenced to seven years but was released as a nonviolent offender during the covid pandemic.
Cooper and Wilkins also pleaded guilty in the course of the investigation. Wilkins was sentenced in January to a year and a day in prison and ordered to pay $123,000 in restitution. Cooper awaits sentencing in the Gosses' case.
Others who have pleaded guilty are: Marilyn Luann Nolan of Springfield, Mo., Preferred Family's former chief executive officer; Robin Raveendran of Little Rock, former director of operations and executive vice president of the company; and Keith Fraser Noble of Rogersville, Mo., former director of Preferred Family's clinical operations.
In the Arkansas cases, Hutchinson, 49, of Little Rock, pleaded guilty in June 2019 in U.S. District Court in Little Rock to federal charges of bribery and filing a false tax return. In addition to the prison sentence, U.S. District Judge Kristine G. Baker ordered Hutchinson to pay $355,535 in restitution to the Internal Revenue Service and the Arkansas Department of Finance and Administration.
Hutchinson pleaded guilty in Missouri's western district to one count of conspiracy to defraud the United States. He faced a maximum prison term of five years, a maximum of three years' supervised release and a maximum $250,000 fine.
Hutchinson is represented in the Missouri case by Dudley of Little Rock and Nancy Price of Springfield, Mo.
On the web
Jeremy Hutchinsons plea agreement: nwaonline.com/426plea/