Prosecutors in the U.S. District of Northern Indiana released an indictment on Thursday alleging Cardwell and conspirator Michael J. Plake defrauded a Monticello, Ind., hospital out of more than $800,000 between March 2003 and October 2009.
Cardwell, currently a wanted fugitive, was CEO of White County Memorial Hospital during the time in question. The indictment alleges he implemented a scheme in which he funneled White County’s money to a bogus staff recruiting firm, called Plake and Associates.
In actuality, the firm was just Plake — a 47-year-old West Lafayette, Ind., resident with no recruiting experience and who at the time in question was working as a Catholic youth minister. The indictment alleges Plake did no recruiting with White County Memorial Hospital’s money, instead pocketing 25 percent while kicking 75 percent back to Cardwell.
Assuming a total of $800,000, that would put Cardwell’s share at about $600,000 and Plake’s at $200,000 over the six-and-a-half years.
The indictment alleges the two men made their dealings appear legitimate by creating fake recruiting agreements and invoices.
Cardwell and Plake each stand charged with one felony count of conspiracy to commit mail fraud in Indiana’s northern district.
If the allegations sound familiar, that’s because Cardwell and Plake are accused of running the same scheme at Powell Valley Healthcare during Cardwell’s tenure as CEO. However, the men are alleged to have done so at a far accelerated pace at Powell Valley Healthcare than at White County Memorial Hospital: they allegedly took more money here ($847,884) in a far shorter period of time (the seven months between March and September 2011).
In August and September 2011, the large recruiting bills and other questions from hospital officials about representations made by Cardwell began eroding his scheme, documents reviewed by the Tribune indicate. Cardwell resigned on Sept. 26, 2011 and a 15-count indictment followed in March in the U.S. District Court for Wyoming.
When Cardwell was hired by Powell Valley Healthcare officials in February 2011, it was based in some part on rave reviews from those who had worked with him at White County Memorial Hospital. In comments to the Monticello Herald Journal leading up to his May 2010 retirement, Cardwell’s co-workers expressed praise and thanks for the work their CEO had done since coming on board in April 2001.
In a statement Friday, IU White Memorial Hospital officials told the Herald Journal that “we continue to cooperate with law enforcement authorities as this investigation is ongoing. We are confident that the criminal justice system will bring about a just result in this case.”
Plake has already entered into a plea agreement with federal prosecutors in Wyoming relating to the allegations at Powell Valley Healthcare. He pleaded guilty to two of the 15 counts in September and his defense attorney, Sean Barrett of Cheyenne, has indicated in court filings that the charge in Indiana will be incorporated into Plake’s deal and sentence in Wyoming.
Plake’s sentencing hearing is set for Feb. 25 in Cheyenne before Chief U.S. District Court Judge Nancy Freudenthal.
Details of what that sentence will entail have generally not been publicly disclosed, but Freudenthal said at a September hearing that it may include Plake being held liable for the full $847,884 misappropriated from Powell Valley Healthcare.
Cardwell returned to the United States from Thailand in March and pleaded not guilty to the Wyoming charges, but dropped off the map in late August. He had been free on a $50,000 unsecured bond set by U.S. District Scott Skavdahl of Casper when he stopped all contact with his defense attorneys. Cardwell’s attorneys have said they believed their client was about to accept a plea deal at the time he went on the lam.
Despite Cardwell’s absence, a civil suit being brought against the former CEO and Plake by Powell Valley Healthcare is proceeding.
Powell Valley Healthcare’s management company, HealthTech Management Services Inc., was technically Cardwell’s employer and is also a defendant in the civil suit; Powell Valley Healthcare contends the company didn’t do enough to oversee Cardwell. HealthTech, meanwhile, denies any liability and wants Cardwell and Plake held responsible for any damages to Powell Valley Healthcare.
Freudenthal last week set a June 24, 2013 trial date for the civil case.
Two of Cardwell’s attorneys, Robert W. York of Indianapolis, Ind., and Robert W. Horn of Jackson, had asked to be allowed to withdraw as his representatives in early September, citing an inability to reach him and a lack of payments. Judge Freudenthal, however, did not let them, saying they hadn’t met the necessary procedures to withdraw. Horn and York represented Cardwell at last week’s pre-trial conference.