A motion outlining the proposed settlement was filed in Wyoming’s U.S. District Court in Cheyenne on Friday.
If approved by Judge Nancy Freudenthal, the settlement would end the civil suit against Cardwell and eliminate the need for an Oct. 15 civil trial.
“By entering into this agreement, Cardwell is admitting his liability for $3,500,000, but is making no admission that any aspect of the alleged conduct in fact occurred,” according to the document, which was signed by Cardwell on Aug. 22.
HealthTech filed the lawsuit in February last year alleging that Cardwell stole close to $848,000 during his seven months as Powell Valley Healthcare CEO in 2011.
HealthTech provides management at Powell Valley Healthcare and hired Cardwell to lead the PVHC as chief executive officer.
The lawsuit says Cardwell defrauded Powell Valley Healthcare by pretending money was going toward staff recruiting. Instead, he sent the money to Michael J. Plake, a friend in Indiana, who simply pocketed 25 percent of the money and kicked 75 percent back to Cardwell.
Eli Richardson, an attorney for HealthTech, said the settlement covers all claims, including the money that was stolen and “consequential damages from that activity.”
Derek Morkel, HealthTech’s chief executive officer, said Friday, “HealthTech is pleased that it has reached a settlement with Paul Cardwell regarding the amount of his liability to HealthTech, eliminating the necessity for a trial with him. We believe that the settlement amount is very appropriate and that the court should and will enter consent judgment in that amount.”
If the agreement is approved in court, Richardson said, HealthTech could use a variety of methods to collect the money from Cardwell, including garnishment of money and wages.
“If they find real property, they can see about having that property attached and selling it,” Richardson said. That depends on the laws in the state where the property is located.
If property were found overseas, “the law in that regard tends to be complex,” Richardson said. “But it would be typical for a creditor to explore its options in whatever country it finds property in.”
The settlement does not affect the scheduled civil trial against Plake, who admitted in May to helping Cardwell defraud Powell Valley Healthcare of $847,844 between March and September 2011. Plake was sentenced through a plea agreement in criminal court in May to 30 months in prison, but the civil case against him remains.
“We still need to resolve the civil damages against Plake separately,” Richardson said. “He still has a separate liability to answer for.”
A restitution plan for the stolen money was included in Plake’s plea agreement in May, calling for Plake to pay $500 per month or half of his monthly income, whichever is greater.
But that agreement doesn’t cover any damages beyond the amount stolen — such as HealthTech’s costs to replace Cardwell and to investigate the billing scheme.
Cardwell’s criminal trial remains scheduled for Sept. 30, but his attorney told Judge Freudenthal earlier this month that he plans to seek a plea deal. Cardwell remains in custody in Cheyenne.
Cardwell and Plake also are accused of stealing $845,820.77 from White County Memorial Hospital in Indiana, beginning in 2002 or 2003, through a similar scheme when Cardwell was chief executive officer there.