Podiatrist’s Paper Trail Tied to Pinewood

by Talk Business & Politics ([email protected]) 387 views 

Sometimes we’re still amazed at what a simple Google search turns up.

Early last year, we wrote a Whisper about the On Deck batting cage in Fayetteville being for sale after owner Chuck Calloway filed for bankruptcy protection listing debts of $1.9 million.

Former Razorback and St. Louis Cardinal Tom Pagnozzi, who owns a batting cage business in Arizona and looked into On Deck, told us the asking price was out-of-whack at around $2.1 million.

We noticed some construction recently and decided to see what was going on.

Turns out in May, Calloway turned the business over to ANB Financial NA with a quit-claim deed. In September, ANB sold the 18,300-SF building on 1.4 acres to Pinewood Healthcare Realty LP for the bargain price of $375,000.

The fact ANB sold an asset with an appraised value of $1.2 million is certainly noteworthy given the bank’s nonperforming and past due loans of more than $145 million, but it wasn’t the most interesting twist by far.

Checking out Pinewood on the Arkansas Secretary of State Web site revealed the registered agent is one James Naples, a podiatrist from Texarkana.

Nothing interesting there, until running his name through Google turned up a scathing 2004 federal indictment of Naples, five other podiatrists and his nurse in Texarkana charging them under RICO, the racketeering statutes usually reserved for the mafia and drug cartels.

According to the indictment, Naples and company were systematically defrauding Medicare, Medicaid and private insurers of millions through overcharging, fake billings and procedures they allowed residents to perform outside of any supervision.

Not only that, Naples was treating cancer patients – and billing insurers for the service – with a debunked procedure involving a Category V poison used in pesticides that was banned by the Food and Drug Administration in the 1930s.

Noting that, “as a Doctor of Podiatric Medicine, Naples is unqualified to treat cancer patients because it is beyond the scope of his training and license,” the group was charged with mail fraud, wire fraud and obstruction of justice.

In particular, Naples and two others were charged with conspiring to obstruct the investigation by means of bribery, falsifying or concealing documents, resisting Grand Jury subpoenas, intimidating witnesses and perjury.

“The defendants in this case callously preyed on vulnerable cancer patients,” Dana Corrigan of the Dept. of Heath and Human Services said in the indictment. “They showed little regard for patient safety, and instead focused on illegally maximizing their reimbursement from the Medicare program. After their scheme became known, these defendants brazenly obstructed a federal investigation.”

On Dec. 22, 2004, Naples pleaded guilty to obstruction of justice in exchange for the rest of the racketeering charges being dropped. He was sentenced to two years probation, ordered to pay $2 million in restitution and banned from Medicare/Medicaid for 10 years.

The rest of the defendants entered into plea arrangements as well, and as a side note, an unindicted co-conspirator in the case was Nicholas Bachynsky, who was imprisoned from 1989 to 1997 for defrauding insurers of between $15 million and $37 million. He was also stripped of his medical licenses for performing the same unapproved cancer treatment Naples later would.

In 2003, Bachynsky was charged with aggravated voluntary manslaughter in Italy when four patients he was treating died. He was on the run until being arrested in Florida in 2004, where he is still in the Miami federal prison on 40 counts of conspiracy, mail fraud, wire fraud and securities fraud.

Naples bought Vista Health, a 12-bed psychiatric care facility, in Fayetteville in 2000 for $3.9 million. A 2003 article in the Northwest Arkansas Business Journal on mental health noted that the facility doesn’t accept Medicaid. Considering Naples was under investigation for six years, now we know why.

Calls to Naples in Texarkana went to an answering service and an operator who told us Naples’ office is closed. No one from Architectural Construction Inc. of Springdale, who is doing the work at On Deck, ever called us back to let us know what the project entails.

We just hope it’s not a cancer clinic.