[UPDATE] Former Archbold CEO Found Guilty on All Counts

By: Gabrielle Sarann Email
By: Gabrielle Sarann Email

[UPDATE] 12-22 2:30PM --

Department of Justice --

WASHINGTON – John D. Archbold Memorial Hospital Inc. has paid the United States a total of $13.9 million to settle allegations that the hospital submitted false claims to the state of Georgia’s Medicaid program, the Justice Department announced today.

The settlement resolves allegations that between November 2002 and July 2008, the Thomasville, Ga.-hospital made false representations to the Georgia Department of Community Health, the state agency that administers the Medicaid program in Georgia, that it was a public hospital for Medicaid purposes in order to increase the amount of Medicaid funds provided to the hospital. Under Medicaid rules, only public hospitals may participate in the Medicaid Upper Payment Limit (UPL) program. In addition, public hospitals receive additional Disproportionate Share Hospital (DSH) program funds that are not available to private hospitals. Contrary to its certification to the Georgia Department of Community Health, Archbold Memorial was in fact a private hospital, and as a result received millions of dollars in UPL and DSH funds to which it was not entitled.

"We are committed to protecting the integrity of the Medicaid program and ensuring that health care providers do not game the system to the detriment of the poor, disabled, and young people served by this important program," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.

"The U.S. Attorney’s Office will continue to use the False Claims Act to protect programs like Medicaid, which rely on the honesty and accuracy of information provided by program providers to determine the amount of money paid by the United States," said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia in Atlanta. "Any false statements made in order to increase the amount of money the federal government spends to provide health care to its beneficiaries will be ferreted out and the funds recovered."

The civil settlement resolves a lawsuit filed in federal court in the Northern District of Georgia under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblower – Wesley Simms, M.D.– will receive $695,151 from the settlement amount.

This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.

The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of Georgia, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.

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[UPDATE] 12/10 10:15 a.m. by WCTV --

The U.S. Department of Justice has released a statement on the trial.

It can be read by clicking the tab above titled: DOJ Beverly Release

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[UPDATE] 12/8, 5:58 p.m. by Gabrielle Sarann --

Jurors deliberated for two hours and twenty-five minutes before unanimously delivering that verdict.

Beverly will be sentenced at a later date.

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[UPDATE] 12/8 5:45 p.m. by Gabrielle Sarann --

A jury of four men and ten women will seal former Archbold CEO and President Ken Beverly's fate.

At 2:05 p.m., they began deliberating on Beverly's six-count indictment.

They will have to decide if he conspired with former Archbold CFO Bill Sellers to defraud the government and if he falsified documents to get those funds.

If he intimidated Sellers to prevent him from implicating Beverly, and whether he lied in his May 2008 deposition by testifying he didn't know of phony records until the Simms lawsuit broke the year before.

In his closing argument this morning, Prosecutor James Crane asked jurors to recall Beverly's cross-examination.

Why he repeatedly gave evasive answers to whether he'd ever talked to Sellers about this investigation, and if Archbold is a public or private hospital.

"That man is brilliant," said Crane. "He has far more education on hospitals than anyone in Georgia, yet he can't give reasonable or straight forward details?"

To orchestrate the alleged fraud scheme, three stages were laid out to jurors.

Lobbying the feds for funding beginning in 2002.

Definition stretching by asking the government to accept a deed instead of a lease to show Archbold was owned by a hospital authority.

And executing the alleged fraud scheme by submitting fake documents to qualify for more Medicaid funds.

But in his rebuttal, defense attorney Bruce Maloy made several defining points, including asking jurors to review Seller's plea agreement.

That it's evidence of Sellers' weak character and scheme to drag Beverly down with him.

"He gets no reward for saying he did this on his own," said Maloy. "So he's got to implicate somebody and Ken Beverly is the man that he has picked."

Maloy asked jurors to consider that Sellers is a liar and posed the question, "Would Ken Beverly jeopardize the reputation of an institution he put his whole life into?" That Archbold was the "love of his life, second only to his family."

Beverly faces a federal prison term and fine.

Sellers has pleaded guilty to three offenses and is cooperating with federal prosecutors.

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[UPDATE] 12/8 Noon by WCTV --

Closing arguments are underway in the federal fraud trial of Ken Beverly, the former President and CEO of Archbold Hospital.

The jury is expected to get the case sometime this afternoon.

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[UPDATE] 12/7 6:17 p.m. by Gabrielle Sarann --

Former Archbold CEO Ken Beverly spent a second day on the witness stand.

For more than two hours, he testified having been out of the loop entirely when former CFO Bill Sellers submitted phony minute meetings to the feds.

Even though he oversaw Archbold's bottom line, down to deciding that hospital walls be painted "Archbold beige."

The 66-year-old testified he "...learned of the minutes from the King and Spalding investigation in mid-October (2007)... when they showed it to me for the first time," he said.

Beverly denied the alleged criminal conspiracy to bilk more than ten million dollars of Medicaid money from 2003 to 2007.

He said Sellers was the mastermind behind the scheme and acted alone.

But a tenet of defense attorney Bruce Malloy's argument, is there's no definition of a public hospital in Georgia.

Two Department of Community Health witnesses have testified to that.

Carie Summers on December 3 and most recently former DCH attorney Neal Childers

"It's one of those terms that's so obvious, it's difficult to find a definition," said Childers, who was general counsel to DCH from 2003 to 2006.

Yet to qualify Archbold as a public hospital, the DCH permitted Sellers to substitute a deed to secure debt instead of a lease to show the Thomasville Hospital Authority had ultimate control of the hospital.

Childers conceded that minute meetings was not a requirement but a way to demonstrate operational control.

One observer recalls the January 2008 recording between Sellers and Beverly in front of their church as the most disturbing.

"When they slowed that down and I had a chance to look at those words and read them, they seemed to swing the case toward the prosecution," said Ken Klanicki, who's been attending the trial since it began.

Lawyers will deliver closing arguments at 9 a.m.

If he's found guilty, Beverly faces a fine and federal prison term.

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[UPDATE] 12/6 5:52 p.m by Gabrielle Sarann--

Ken Beverly took to the witness stand at 9 a.m. Monday.

Most of his testimony focused on denying any involvement of scheming with former CFO Bill Sellers to cast Archbold as a public hospital.

Beverly's direct examination began with defense attorney Bruce Malloy asking him if he conspired to falsify records to get extra Medicaid monies.

Beverly said "I was not part of a conspiracy. That's not right."

And when asked if he tried to influence Sellers, his reply was "Absolutely not."

But for most of the day, jurors watched a tug-of-war between the prosecution and Beverly.

Especially when Attorney James Crane asked Beverly if he knew Archbold was a private, not-for-profit hospital, to which Beverly contested by claiming "It's a not-for-profit 501(c)3 corporation."

Prosecutors again played a January 2008 recorded conversation secretly taped by Sellers outside he and Beverly's church.

But on the witness stand, Beverly said the conversation was meant to get Sellers to speak with lawyers about the charges and does not implicate him in the investigation.

Beverly testified that he spoke with Sellers that day "... to get him involved in the investigation... and it just went on and on and on. It put the organization in a horrible position."

One observer in the courtroom questions Beverly's honesty on the stand.

"Whenever the prosecution came up, he seemed quite hesitant," said Klanicki. "So, I was troubled by that."

The prosecution will resume its cross examination of Ken Beverly tomorrow at 8 a.m.

A verdict is expected by the end of the week.

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[UPDATE] 12/6 Noon by WCTV --

This morning on the witness stand, Beverly denied all 6 counts of his indictment and said he's not part of any conspiracy to get money from the federal government.

Beverly denied falsifying records, and committing perjury in a civil deposition.

We'll have more tonight on Eyewitness News.

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[UPDATE0 12/3 6:07 p.m. by Gabrielle Sarann --

The prosecution has wrapped up witness testimony today in the federal fraud trial of Ken Beverly.

The day began with former Archbold CFO Bill Sellers under the microscope, as the defense grilled him about
phony records he and Beverly allegedly engineered to show that Archbold was a public hospital.

"Archbold Hospital has an outstanding reputation. And to see it dragged through the mud has been very troubling," said Klanicki,

The government rebuffed by reminding jurors of secret recordings Sellers made to cooperate with federal prosecutors.

In January 2008, Beverly was recorded saying "...whether we get a felony conviction or not, whether I get a felony conviction or not, whether we serve five year or ten years, we have something to do with it."

As the case unfolds, the big question is whether Beverly engaged in a conspiracy to defraud the federal government.

But details about Beverly's managing style surfaced, as well.

No one denied he's a "visionary" and "extremely hard-working".

Even a former chairman of the hospital board and Thomasville internist Dr. Marshall Dunaway testified that Beverly's "...attention to detail is legend at Archbold."

But when it came to Beverly and Sellers relationship, a running joke at Archbold was that "Bill Sellers wouldn't go to the bathroom without permission," said Dunaway.

Several witnesses testified that Beverly was a "micro-manager."

Down to his decision that hospital walls be painted "Archbold beige."

Jurors also watched Beverly's May 2008 deposition on an overhead projector.

He denied knowing Sellers was submitting fake records to the government until "at some point in time, I learned that but not before the Simms lawsuit," said Beverly.

Beverly's lawyers will present their witnesses Monday at 8 a.m.

The verdict is expected to be handed down by the end of next week.

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UPDATE] 12/3 2:00 p.m. by WCTV --

The defense is getting it's crack at a key witness on December 3 in the trial of a Former Archbold Hospital CEO accused of fraud.

Chief Financial Officer Bill Sellers is testifying in the trial of Ken Beverly.

Sellers has already pleaded guilty on three counts and agreed to cooperate with federal prosecutors.

On the witness stand Thursday, November 2 Sellers detailed how both he and Beverly conspired to secretly present Archbold as a public hospital to obtain more than ten million dollars in federal funds. Today, Dec. 3, the defense is questioning Sellers about his plea agreement with the government. He could face up to 60 years in prison, but he's hoping to get probation.

The defense asked why Sellers never directly accused Beverly of falsifying minutes of meetings. Sellers says its because he was intimidated by Beverly.

Stay with WCTV for updates.

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[UPDATE] 12/2 5:55 p.m. by Gabrielle Sarann --

Day three of the trial centered around the prosecution's star witness: former Archbold Hospital CFO Bill Sellers.

"The government appears to be putting on a very good case," said Dr. Wesley Simms, a pathologist with Archbold Memorial Hospital. "They seem to be very focused, very detail-oriented."

On the witness stand, Sellers described having a social relationship with Beverly.

They even attended the same church in Thomasville, First Methodist Church.

But as a colleague, Sellers revealed that Beverly had a "dominant personality".

He testified that Beverly "...was pretty belligerent, verbally abusive... I didn't challenge the line," he said.

Beginning what's projected to be a two-week trial, Sellers explained to jurors how both he and Beverly conspired to qualify for more than ten million dollars in Upper Payment Limit (UPL) and Indigent Care Trust Funds (ICTF).

He detailed how they mislead the government to believe the Thomasville Hospital Authority had both ownership and operational control of Archbold Hospital, federal requirements needed to receive additional funding.

Sellers even verified a letter with Beverly's signature submitted to Gary Redding, with the Department of Community Health.

On October 24, 2002, a paragraph of that letter began "As we discussed, Archbold is public in all aspects of its operations, certainly including the historical perspective."

Also presented by prosecutors were three secret recordings of conversations between the two men, the second of which took place in their church parking lot.

The third recording took place at Sellers home in January 2008, just after Beverly was implicated, Sellers recorded Beverly saying, "And it's not the survival of me, it's better to have me on the inside spitting out, than the outside spitting in."

Just before defense attorney Bruce Malloy began his cross-examination, 15 minutes before jurors were dismissed, Sellers parting statement was that "Mr. Beverly was involved from the beginning. From before I sent the minutes."

Tomorrow, Sellers will be cross-examined by the defense at 8 a.m.

Beverly is expected to testify next week.

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[UPDATE] 12/1 6:14 p.m. by Gabrielle Sarann --

Nine witnesses took to the stand today in the fraud trial of a former President and CEO of Archbold Memorial Hospital.

Ken Beverly is accused of bilking millions of dollars from Medicaid.

The second day of testimony began with Dr. James Story.

He's Archbold Hospital's former president and its now president emeritus.

On the witness stand, he testified having never been told by defendant Ken Beverly that Archbold Hospital's status had changed from private to public, a switch that would have been necessary to legally qualify for more federal funding.

But Story did concede to Defense Attorney Converse Bright's question that "... both Archbold Hospital and Archbold Medical Center grew tremendously under Ken Beverly's terms."

As the trial progresses, the question will be whether Beverly conspired with his former CFO Bill Sellers to scam Medicaid out of more than $4 million in Upper Payment Limits (UPLs) and more than $5 million in Indigent Care Trust Funds (ICTF).

Beverly is charged with six counts of fraud for, in part, submitting fraudulent minutes on behalf of the Thomasville Hospital Authority, a shell organization used to issue bonds.

The government's ninth witness and close friend of the Beverlys was Delores Harris.

She worked with Ken for more than 27 years.

She described Beverly as "...a pitbull on PMS... because when he grabbed something he wouldn't let go," said Harris, as she reluctantly testified against him.

But a half-hour before the judge dismissed jurors for the day, the government introduced its star witness: Bill Sellers.

Sellers said just after he was suspended from Archbold in November 2007, that Beverly came to his house for a clandestine meeting.

"His intention was that he was going to take care of me on my contract," said Sellers. "He said if he wanted to do me in, he could have several years ago."

Sellers, a recovering alcoholic, said Beverly was likely referring to several DUI's he'd been issued.

But Sellers has been sober since April 2000.

Seller's testimony will continue tomorrow at the Valdosta federal courthouse at 8 a.m.

The trial is expected to last through next week.

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[UPDATE] 12-1 Noon by WCTV --

The former President and CEO of Archbold Hospital is on trial for the second day in federal court - accused of defrauding Medicaid out of millions of dollars.

More than ten witnesses have testified so far, but we have not yet heard from Ken Beverly himself.

His assistant of more than 27 years took the stand this morning, as well as board members from the Thomasville Hospital Association and Archbold Hospital Board.

The board members testified that they were not aware of Archbold Hospital changing from a private to public hospital.

Stay with WCTV.tv

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[UPDATE] 11/30 6 p.m. by Gabrielle Sarann --

Seven months after Ken Beverly was indicted on six counts of fraud, Archbold's former CEO and President goes to trial.

"Certainly the trial is progressing and we're gonna let the jury hear the evidence and perform their function," said Michael Moore, the US Attorney for the Middle District of Georgia.

For 34 years, south Georgians knew Beverly as having come up through the ranks of Archbold Medical Center.

And now, he has a team of lawyers trying to convince a jury that he didn't defraud Medicaid of more than $10 million.

Defense attorney Bruce Malloy told the jury that Beverly was thrown under the bus by his former CFO Bill Sellers, "What motive does Bill Sellers have to lie to minimize his stupid, crazy, dangerous scheme that he perpetrated?," said Malloy. "And what motive does Ken Beverly have to not risk Archbold and... jeopardize himself and his family?"

But prosecutor James Crane contends Beverly had plenty of incentive, "The motive: money. Millions of dollars for himself... to go into Archbold Memorial Hospital... And ultimately for his pockets."

"They've heard the opening statements from the lawyers and now they're receiving evidence and hearing witness testimony," said Moore. "The government is putting its case up first."

When Beverly retired in 2008, he received a Supplemental Executive Retire Plan (SERP) of about $5.6 million.

Former CFO Bill Sellers has already pleaded guilty to three counts of falsifying records.

Tomorrow, prosecutors will continue to call witnesses beginning at 8 a.m.


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