A recent filing in Wyoming’s U.S. District Court says the U.S. Attorney’s Office in northern Indiana is in “the final stages of an investigation” into the actions there of former Powell Valley Healthcare CEO Paul Cardwell and West Lafayette, Ind., resident Michael Plake.
The U.S. Attorney’s Office in Indiana expects to seek an indictment against the two men in July, says the filing from Sean Barrett, Plake’s defense attorney in Wyoming.
Barrett disclosed the information while asking U.S. District Court Judge Nancy Freudenthal to delay Plake and Cardwell’s trial. In an order issued last week, Freudenthal agreed to push the trial back to Sept. 18; the proceeding had been scheduled to start on June 4 in Cheyenne.
It’s possible there won’t be a trial at all: another filing Barrett submitted on May 15 says federal prosecutors in Wyoming and Indiana “anticipate formulating a global disposition” for the cases — suggesting prosecutors may offer a plea deal to resolve allegations in both states.
Barrett’s filings and the order issued by Freudenthal do not offer any details on what the Indiana investigation and new potential charges are about. They say only that the investigation involves “conduct alleged to be the same as that alleged” in the Powell Valley Healthcare case.
Barrett did not return a Tribune phone call seeking more information by press time. John Powell, a spokesman for the U.S. Attorney’s Office in Cheyenne, said he was unable to comment on Barrett’s filing.
The U.S. Attorney’s Office in Wyoming has alleged that Plake and Cardwell operated a scheme at Powell Valley Healthcare where Cardwell claimed to be paying Plake for recruiting staff to Powell, but actually did no recruiting. Instead, the two men are alleged to have split the money between them: Plake getting roughly 25 percent and Cardwell about 75 percent of the $847,884.
The two men are each facing 15 criminal counts in connection with the Wyoming allegations; they both have pleaded not guilty.
Cardwell and Plake also are being sued in civil court by Powell Valley Healthcare and its management company, HealthTech Management Services Inc., which employed Cardwell.
Cardwell has denied those allegations. In an unusually brief one-page response to Powell Valley Healthcare’s and HealthTech’s complaints filed Tuesday, Plake gave a general blanket denial of the allegations and, citing the pending criminal charges in Wyoming, otherwise cited his Fifth Amendment right to not incriminate himself.
Powell Valley Healthcare has named HealthTech as a defendant in its complaint as well, saying the company is responsible for Cardwell’s conduct and didn’t provide adequate oversight. HealthTech denies any liability for Cardwell’s alleged embezzlement, saying in part that the CEO was acting outside the scope of his duties.
A trial date for the civil case has not yet been set.
Barrett, Plake’s attorney, asked for the delay in the criminal trial because the Indiana investigation still is pending. The lack of information complicates Cardwell and Plake’s ability to decide how to proceed in the Wyoming case “due to the unknown ramifications and consequences of the Indiana proceedings and evidence,” Barrett wrote.
While Cardwell was CEO at Powell Valley Healthcare, Plake was working as the director of religious education and youth for the Catholic center that serves Purdue University.
Before coming to the Powell hospital in March 2011, Cardwell’s last job had been as CEO of White County Memorial Hospital in Monticello, Ind. He served there from April 2001 to May 2010.
The hospital’s current owner, Indiana University Health, said in a March statement that it was cooperating with authorities and conducting its own internal investigation relating to Cardwell. An IU Health spokeswoman did not answer a request for information about the status of the organization’s investigation by press time.
Insurance to help PVHC with embezzlement loss
An insurance payment of $205,000 will help compensate Powell Valley Healthcare for its loss due to the alleged embezzlement of nearly $850,000 by former PVHC Chief Executive Officer Paul Cardwell.
Current CEO Bill Patten told the Powell Valley Healthcare board Tuesday that the organization’s insurance company agreed to pay the maximum $200,000 provided under its policy to compensate for criminal activities. The company also will pay $5,000 for claim handling.
Patten said negotiations over a similar claim are ongoing with the company that insures the Powell Hospital District separately.
“These are just one part of our overall efforts to recoup our losses as to ‘he who shall remain nameless’ extracurricular activities,” he said.