Another sentence issued in relation to fraud case involving an Arkansas legislator

Jerry Walsh, the former executive director of South Arkansas Youth Services (SAYS), was sentenced to 30 months in prison followed by three years of supervised release for conspiring to unlawfully divert over $380,000 from the charity to an Arkansas state senator and the lobbying firm of a convicted lobbyist.

According to a press release from the office of Acting U.S. Attorney David Clay Fowlkes for the Western District of Arkansas, Chief U.S. District Judge Susan Hickey sentenced Walsh, 72, of Magnolia, who previously pleaded guilty to one count of conspiracy to misapply the nonprofit’s funds without authority from the board of directors. Judge Hickey also ordered Walsh to pay $515,631.56 in restitution.

As part of his plea, Walsh admitted that beginning in 2013, while serving as executive director for SAYS, he diverted SAYS funds to convicted lobbyist Milton “Rusty” Cranford and an unnamed Arkansas state senator in exchange for the state senator’s influence in protecting the non-profit’s state contracts with the Arkansas Department Health Services (DHS) and DHS’ Division of Youth Services (DYS).

As part of that agreement, Walsh was to provide a monthly “legal retainer” to the Arkansas state senator without the expectation that the senator ever provide any legal work. Instead, the purpose of the payments was to obtain the senator’s assistance in preserving the contracts by influencing DHS and DYS officials. According to the plea, Cranford negotiated the amount paid to the senator, which amounted to over $120,000.

Walsh also admitted to paying Cranford’s lobbying firms above-market prices and employed a relative of Cranford who had a “no-show” job with SAYS. In total, Walsh illegally diverted approximately $262,000 in charity funds to Cranford’s lobbying firm and relative.

Cranford has bribed several Arkansas legislators in a Medicaid fraud. That ongoing fraud investigation has led to convictions and guilty pleas from six former legislators, including former Sens. Henry “Hank” Wilkins of Pine Bluff and Jeremy Hutchinson of Little Rock, the nephew of Gov. Asa Hutchinson.

Cranford, Wilkins and Hutchinson are still awaiting sentencing in the federal corruption probe involving Springfield, Mo.-based Preferred Family Healthcare of Springfield, Mo. PFH was one of Arkansas’ largest Medicaid recipients that reported more than $180 million in annual revenue before DHS officials suspended the Missouri nonprofit from the state’s Medicaid program last summer.