Another guilty plea in Preferred Family Healthcare probe | Arkansas Blog

Wednesday, September 12, 2018

Another guilty plea in Preferred Family Healthcare probe

Posted By on Wed, Sep 12, 2018 at 8:03 AM

Keith Noble, former chief clinical officer for Preferred Family Healthcare of Springfield, Mo., pleaded guilty Tuesday in federal court in Missouri to concealing knowledge of a felony — the embezzlement of the nonprofit's money for the benefit of company executives.

David Ramsey pointed the finger at Noble in a July article. It was only after that article that Noble was removed from the PFH payroll, joining three other former top executives and Rusty Cranford, the PFH employee and lobbyist who's pleaded guilty to a massive fraud scheme that has ensnared four former Arkansas legislators among others.

The Democrat-Gazette account of Noble's plea is an epic catalog of thievery.

* $17.6 million in excessive fees to top managers.

* A half-million in payoffs to an accountant who oversaw a $3 million fraud scheme. He was indicted, then committed suicide.

* Interest-free loans worth almost $5 million to for-profit companies controlled by PFH executives.

* $1.5 million in rent payments to for-profit companies that owned vacation homes of various executives, including retreats in Arkansas and Florida.

* $4.5 million in illegal lobbying and campaign contributions by the nonprofit. Cranford got $2.9 million. A Philadelphia lobbyist, D.A. Jones, also has entered a guilty plea in the case.

* Luxury cars, private air travel and other perks were enjoyed by the insiders.

Noble admitted in his plea to receiving $4.3 million in 12 years through illegal means.

Three top executives have left PFH but have not been charged. Noble said he was not always aware of their schemes. Noble's plea does add another cooperating witness to a long list PFH is pulling out of Arkansas but has made hundreds of millions over the years operating behavioral health agencies in five states. It took in more than $1 billion from 2005-2017, the government said.

And here's the thing missing from the account of Noble's plea:

This was a criminal enterprise funded almost entirely by federal money, primarily Medicaid. It produced hundreds of millions in payments to PFH (more than $30 million a year in Arkansas) and its various affiliates. Given the amount of embezzlement, you might speculate that the system had been rigged to provide excess profits to this putative nonprofit. That was Cranford's job as a lobbyist, of course.

As Arkansas moves ahead with continuing social services of undeniable benefit, it's clear it must do more than find an operator with clean hands. It should take a hard look at how the program is structured.

Noble's plea again makes unnamed references, as Ramsey's article did, to former Chief Financial Officer Tom Goss, former Chief Operating Officer Bontiea Goss, and former Chief Executive Officer Marilyn Nolan. They were placed on administrative leave in November 2017 and terminated in January 2018.  They have not been charged with a crime.

Among the illegal activities noted in Noble's extensive plea agreement:

In Arkansas, Cranford, [former Rep. Eddie] Cooper and others organized fundraisers for many candidates running for seats in the Arkansas State Senate and Arkansas House of Representatives. At Cranford’s direction, “Employee D” prepared and disseminated invitations for the events, which were often held at venues such as
restaurants and hotels in Little Rock, Arkansas. Cranford, Cooper and others paid for expenses related to the fundraisers using their Charity-issued corporate credit cards.

Incorporated as a nonprofit, PFH is legally barred from making campaign contributions.

The charge to which Noble pleaded, misprision of a felony, carries a maximum penalty of three years. He's agreed to make $4.3 million in restitution.

Here's Noble's full plea agreement. He appeared before a magistrate yesterday and released pending sentencing.

The federal charge against Noble details the broader details of PFH's operation and structure of related companies to carry out the embezzlement schemes.

Wouldn't you like to see a specific accounting of this spending in Arkansas?


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