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January 28, 2014

Former Monticello hospital exec sentenced

$850K taken from Monticello facility

CHEYENNE, Wyo. (AP) — A former administrator who pleaded guilty to defrauding hospitals in Indiana and Wyoming must serve more than 10 years in prison, a federal judge ordered Monday.

U.S. District Judge Nancy Freudenthal sentenced Paul Cardwell to serve 121 months and pay restitution of nearly $1.7 million.

Cardwell pleaded guilty last year to two counts of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.

Prosecutors say Cardwell took nearly $850,000 from Powell Valley Healthcare in 2011 and took about the same amount between 2003 and 2009 from White County Memorial Hospital in Monticello.

Auditors discovered the scheme in 2011. Three weeks before his trial was set to start, Cardwell disappeared while free on bond in the summer of 2012. He was arrested in Thailand last June and extradited to the United States.

Prosecutors said that Cardwell defrauded both hospitals by funneling money to co-defendant Michael J. Plake of West Lafayette. Freudenthal last year sentenced co-defendant Plake to 30 months in prison.

Cardwell directed payments to a firm Plake established ostensibly to recruit medical personnel for the hospitals, prosecutors have said. They said the men didn’t do any actual medical recruiting and that Plake kicked back the bulk of the money to Cardwell.

HealthTech Management Services, a private company, operated the Powell company and retained Cardwell to work there after his tenure in Indiana. Company officials testified Monday that Cardwell’s deception damaged both the reputation of the company and of the Powell hospital.

William Patten Jr., the current CEO of Powell Valley Health Care and an employee of HealthTech, said the loss of $850,000 created serious financial challenges for the hospital, some of which he said it’s still struggling to overcome.

Tracy Copenhaver, a Powell lawyer representing the hospital, urged Freudenthal to give Cardwell the maximum sentence.

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