The suit was filed Feb. 23 in the U.S. District Court in Casper by HealthTech Management Services Inc. HealthTech employed Cardwell as chief executive officer for the hospital and other health care facilities through a contract to provide management services at Powell Valley Healthcare.
Wurzel said HealthTech is suing for its damages only; its complaint does not address Powell Valley Healthcare’s embezzlement loss of nearly $850,000.
HealthTech’s lawsuit states that Cardwell paid $847,934 to the straw company (Plake and Associates), which then returned a large amount of the money to Cardwell through electronic transfers to accounts controlled by Cardwell.
Wurzel said the lawsuit addresses HealthTech’s, and not Powell Valley HealthCare’s, claims against Cardwell.
“PVHC views HealthTech’s lawsuit as part, but not all, of the process of resolving the issues implicated by these alleged circumstances,” Wurzel said in a prepared statement released Wednesday. “PVHC intends to participate in that process when and how appropriate and to pursue a final resolution of these issues.”
That includes reserving the right to also name HealthTech as a defendant if necessary, Wurzel said in a telephone interview Wednesday. That option was included in the board’s vote on Monday.
“Since this was not a loss incurred by them, they can’t really ask for our losses, so we’re going to have to,” he said.
Powell Hospital District Board members also serve as members of the Powell Valley Healthcare board. But Hospital District President Mark Kitchen said Monday it would not be prudent for him to comment on the lawsuit, since it was filed by Powell Valley Healthcare’s management company.
Wurzel said the PVHC board first became aware of what was happening back in September through the annual audit process.
“The audit indicated the things that are in the lawsuit — that there were checks written to this company for (physician and staff) recruiting purposes, that did not have the proper paperwork behind the checks,” he said.
Wurzel said he learned of the discrepancy on Sept. 23, the day Cardwell resigned.
“It was after that meeting with them that morning that I talked with our legal counsel, and HealthTech became aware that he’d resigned,” Wurzel said.
The Powell Valley Healthcare audit was not completed until late January.
Wurzel said no one knows for sure where Cardwell is. The lawsuit states he is believed to be living in Thailand.
“I’ve been told it’s possible to serve people no matter where they are ... if you can track them down,” Wurzel said.
Wurzel said former Chief Financial Officer Calvin Carey “to the best of our knowledge ... is not going to be included in any of these legal proceedings.”
Carey resigned in December.
Wurzel said he could not confirm whether a criminal investigation of Cardwell is being conducted.
No criminal charges are pending in Park County, but the multi-state nature of the allegations could make them appropriate for a federal investigation.
“PVHC trusts that liability and responsibility, if any, for the misconduct alleged in HealthTech’s complaint will ultimately be determined,” Wurzel said in the statement. “PVHC can and does confirm that it is committed to safeguarding its financial resources and that if they are diverted or misused, PVHC takes the matter very seriously.”
Wurzel said the alleged embezzlement put Powell Valley Healthcare in a difficult financial situation.
“That’s a gigantic sum that many things could have been done with,” he said. “He (Cardwell) made a big difference in our bottom line.”
In the statement, Wurzel said, “HealthTech has continued without interruption to provide management services to PVHC after Paul Cardwell’s resignation. HealthTech provided PVHC with an interim CEO, Mike Lieb, shortly after Mr. Cardwell’s departure. A new CEO, Bill Patten, likewise is being provided by HealthTech with the approval of PVHC’s board ... PVHC looks forward to continuing to serve the community under Mr. Patten’s leadership.”
Patten took up the position on Monday.