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HealthTech not happy with plea agreement in Cardwell case

Although Paul Cardwell has agreed to pay $3.5 million to Powell Valley Healthcare’s management company for embezzling from the organization, company representatives doubt Cardwell will be able to make good on the agreement.

Cardwell accepted the settlement in connection with defrauding Powell Valley Healthcare out of $847,844 while its CEO between February and September 2011.

Neil Todhunter, director of HealthTech Management Services, shared his doubts of recovering the multi-million dollar settlement from Cardwell in a discussion with Powell Valley Healthcare board members Monday evening. HealthTech provides management for Powell Valley Healthcare and technically was Cardwell’s employer.

During Monday’s board meeting at Powell Valley Hospital, Dr. Michael Tracy said medical staff have asked whether Powell Valley Healthcare will get any share of that settlement.

Todhunter said HealthTech is beginning the process to determine what resources Cardwell might have that could be garnered to pay the settlement.

“If he has any (assets), they’re out of the country,” most likely in Thailand, he said.

Cardwell was arrested in Thailand in June after fleeing the United States in July 2012 to avoid prosecution.

HealthTech’s chief goal now is to recover its out-of-pocket costs in attorney and court fees and other costs associated with Cardwell’s actions, Todhunter said.

“For us, that’s right around $700,000. To be honest, we don’t expect to see any of that,” he said. “We think that the likelihood of any of us getting any kind of a recovery is about 5 percent or less. If there is any, and it’s beyond that, we’ll be happy to share.”

A West Lafayette, Ind., resident, Michael Plake, agreed to pay a $2 million settlement to HealthTech for helping Cardwell embezzle the money from Powell Valley Healthcare; the scheme involved Plake posing as a medical recruiter.

Plake was actually pocketing 25 percent of the recruiting money from Powell Valley Healthcare and kicking back the other 75 percent to Cardwell.

Todhunter said HealthTech’s overarching concern has been to make sure that Powell Valley Healthcare was reimbursed for the losses it suffered through Cardwell’s actions.

“I believe that has happened,” he said.

Powell Valley Healthcare recovered its losses through two insurance policies and a February payment of an unspecified amount by HealthTech. Combined, the organization received a total of $1.15 million as reimbursement for the money taken by Cardwell and Plake, as well attorney fees, Cardwell’s wages and other associated costs.

On the criminal side of things, Cardwell pleaded guilty on Oct. 2 to three felony charges for defrauding Powell Valley Healthcare out of the $847,844 in 2011, and roughly the same amount from a Monticello, Ind., hospital between 2003 and 2009. As part of an undisclosed deal with the U.S. Attorney’s Office, he entered guilty pleas to counts of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering and conspiracy to commit mail fraud.

Todhunter noted that U.S. District Court Judge Nancy Freudenthal hasn’t signed off on Cardwell’s plea agreement yet. He said HealthTech’s attorneys are challenging some aspects of the deal, specifically the amount of prison time Cardwell would serve.

“We think the timeframe agreed in the settlement is much too short of a time (for Cardwell to serve in prison),” he said. “We think they will add another 30 months on top of that.”

Todhunter said he didn’t have the sentencing agreement with him and couldn’t specify what its terms were.

Todhunter noted Freudenthal also was the judge who previously sentenced Plake.

After hearing statements from Plake and several of his family members during a May hearing, Freudenthal sentenced Plake to 30 months in prison for his role in the scam.

Given that example, “I think she’s going to jump on him (Cardwell) with both feet,” Todhunter said.

PVHC Board President Dr. Mark Wurzel instructed board members to write their recollections of lies and deceptions by Cardwell that they witnessed while he was chief executive officer at Powell Valley Healthcare. Those will be compiled for victim impact statements for the sentencing, he said.

Cardwell’s sentencing hearing was rescheduled Tuesday. Formerly set for Dec. 23, Judge Freudenthal moved the sentencing to Jan. 27 in federal court in Cheyenne.

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2 comments

  • posted by William Watson

    November 01, 2013 4:33 pm

    I agree with Mike 1oo% PVHC has got their money back. Now they should maybe look at the rest of the management that they have there and start questioning if they are really doing their jobs or just getting paid for nothing. I know a few Vice Presidents that work there that should be shown the door with a big sign that says dont come back. I also think that if you are so worried about money, why dont you make your doctors see more patients in a day and make them work five days a week instead of 3-4. This is just my opinion but I dont think many people really know what is going on around there

  • posted by Mike Wilson

    October 31, 2013 9:26 am

    Sounds like Powell Valley Healthcare has been reimbursed financially for what Cardwell took in monies directly.
    Powell Valley Healthcare should start looking at themselves for production of revenue(or lack thereof) rather than hoping to get more cut from HealthTech. Powell Valley Healthcare should stop pointing fingers and not attempt to take more from others' rather than looking at thier need to be more efficient and effective in their services.
    Cardwell should do triple the time that Plake was sentenced for(actually 10 years would be a lesson)-90 Months is about 7 1/2 years, then the thief will be back to Thailand living large.
    Impact Statements? The Impact would have been minimal if Administration would have just listened to Director's and staff's concerns but Administration was to busy trying to be his friend-parties, golfing, his car, all the money he reportedly earned through amazing investments- they were blinded by his lies and true Leaders should have seen through it as many staff did.

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