Feds seeking to seize assets of former treatment center

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Federal prosecutors are attempting to seize buildings, cash and other property from a Powell group home and treatment center, alleging the nonprofit organization submitted fraudulent bills to Medicaid.

In asking a judge to turn the hundreds of thousands of dollars worth of property over to the government last month, the U.S. Attorney’s Office asserted that Northwest Wyoming Treatment Center’s assets represent “the proceeds of, and property derived from the proceeds of, health care fraud.”

The details of the civil forfeiture case are being kept confidential, but an attorney representing one of the center’s former employees said it stems from a years-long investigation into the Medicaid billing practices of former Powell psychologist Gib Condie, who founded the Northwest Wyoming Treatment Center.

“Basically this does arise out of the leadership and advice that [Gib] Condie gave to Northwest Treatment Center,” Cheyenne attorney Gay Woodhouse said Wednesday.

Condie is currently serving a three-year federal prison sentence for health care fraud after he reportedly submitted millions of dollars of fraudulent bills to Wyoming Medicaid. He also was ordered to pay $2.28 million in restitution and forfeit property valued somewhere around $1.5 million. Condie contended that he had submitted legitimate claims and provided quality care, but federal prosecutors disagreed, saying he had made multiple misrepresentations in billing for ineligible work.

The Medicaid claims that landed Condie in prison came from Big Horn Basin Mental Health Group, his private business that operated a statewide network of mental health providers.

Northwest Wyoming Treatment Center is a separate, not-for-profit organization with a different mission. Condie founded it in 2000 as the Vernon Clegg Condie Group Home to provide supervision, tutoring and care for teenagers involved in court proceedings or crises. It later became the Northwest Wyoming Treatment Center, adding a residential drug treatment facility for teens in 2008. At its peak in 2015, records show NWTC employed two dozen people and pulled in more than $2.3 million in revenue.

Much of that revenue came from Wyoming Medicaid. Between 2012 and 2015, NWTC submitted nearly $6 million worth of claims to the joint federal-state program, an average of nearly $1.5 million per year.

However, the center stopped submitting claims to Medicaid in 2016 and revenue plummeted to just $325,454 that year. Condie and Big Horn Basin Mental Health Group also stopped billing Medicaid early that year, after authorities told him they had found evidence that his billing was fraudulent.

Though reduced in size, NWTC continued to operate through March 1 of this year, when it stopped accepting teens at its group homes, according to information the Wyoming Department of Family Services provided to the Park County Attorney’s Office.

It was only a few weeks later, on March 25, that federal prosecutors filed a complaint in Wyoming’s U.S. District Court seeking the forfeiture of various Northwest Wyoming Treatment Center assets.

The document that lays out the details of the allegations against the center has been sealed — not even being made available to center leaders.

Former NWTC Executive Director Ty Barrus and Joe Bridges, the president of the center’s board, each declined to answer any questions about the center this week. They referred questions to attorney Pat Crank of Cheyenne, but he was attending a Wyoming Game and Fish Commission meeting and unavailable on Wednesday.

Woodhouse, meanwhile, is representing Chad Lindsay, who previously served as the center’s CFO and later, as interim director. Lindsay has been cooperating with the U.S. Attorney’s Office as it’s investigated the Medicaid billing over the last couple of years, Woodhouse said.

She noted that prosecutors have already obtained a conviction of Condie.

“To the extent that they’re looking at anybody else, I can say for sure that Mr. Lindsay wasn’t involved in anything that was illegal,” Woodhouse said. “He wasn’t aware of any of this billing practice; it wasn’t really in his purview.”

In a January 2018 interview with the Tribune, Condie said federal authorities had probed his involvement with Northwest Wyoming Treatment Center — and specifically threatened to prosecute him for fraud in connection with a grant the organization received.

However, Condie said FBI agents were told by the center’s then-staffers that he wasn’t involved.

“Once it was up and going, they just took over. They did their own billing, eventually,” Condie said. “It was completely independent of me.”

According to information provided to Wyoming Medicaid and the Wyoming Department of Health, the listed “owner” of Northwest Wyoming Treatment Center changed from Condie to Barrus in July 2011.

While the details of the pending forfeiture case have been made confidential, prosecutors did file public documents outlining the property they want to seize. That includes NWTC’s former treatment center on Julie Lane, its boy and girl group homes on Hamilton Way, an empty lot, a Polaris UTV and a 16-foot-long trailer. The value of those assets could easily surpass $750,000, plus whatever money remains in two NWTC bank accounts.

If center leaders want to keep the property and dispute the government’s allegations, they’ll need to file a verified claim by Wednesday, May 1, then file an answer to the allegations and go through a discovery process.

Big Horn Federal Savings has already filed a claim on the former treatment center and the group homes, saying it’s still owed roughly $221,000 on a nearly $488,000 mortgage.

To seize the assets in the civil forfeiture case, prosecutors will only need to prove that the property represents the proceeds of fraud by a “preponderance of the evidence” — basically showing it’s more likely than not that they’re right. That’s a much lower burden of proof than the “beyond a reasonable doubt” standard that the government would have to prove if it was bringing criminal charges.

At the end of 2017 — the most recent data publicly available — Northwest Wyoming Treatment Center reported having about $690,000 in net assets.

The organization’s public tax forms outline how the center experienced substantial growth over the years, with revenue rising from about $155,000 in 2005 to nearly $2.31 million by 2015.

NWTC leaders had hoped to grow even further: In 2015 — with the organization in the midst of a year that would produce a more than $543,000 net gain — center leaders approached the Powell Economic Partnership and the City of Powell for help on an expansion project.

NWTC proposed replacing its roughly 10-bed residential treatment center on Julie Lane with a 20-bed facility near the intersection of Panther Boulevard and Lane 8H. They pledged to add 10 new jobs to an already $1.19 million payroll.

The Powell City Council agreed to apply for a $3 million grant from the State Loan and Investment Board to kick-start the expansion, but the plan was later scrapped because of a state law prohibiting facilities from adding any more treatment beds.

NWTC leaders said they planned to re-apply for a grant down the road, but the organization’s fortunes changed just months later.

The vacant lot on Lane 8H is among the property that the U.S. Attorney’s Office is now seeking to seize.

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