Preferred Family Healthcare admits to Medicaid fraud, to pay $8 million

Preferred Family Healthcare (PFH), the Springfield, Mo.-based company involved in a broad fraud scheme in Arkansas, will pay more than $8 million in forfeiture and restitution to the federal government and the state of Arkansas.

According to a statement Friday (April 1) from the office of U.S. Attorney for the Western District of Arkansas, the payment comes under the terms of a non-prosecution agreement, which acknowledges the criminal conduct of the mental healthcare provider’s former officers and employees.

“Preferred Family Healthcare must relinquish the illegal profits it garnered from a wide-ranging fraud and bribery scheme,” U.S. Attorney Teresa Moore for the Western District of Missouri noted in the statement. “Several former officers and employees are being prosecuted in separate criminal cases for their individual criminal conduct. This non-prosecution agreement holds the charity itself responsible for their actions as agents of the charity. Public tax dollars were stolen and misused in the course of this public corruption scheme, and through this agreement and these separate prosecutions, those dollars are being restored to the public coffers.”

PFH in October 2020 agreed to a $6.5 million after reaching a settlement with Arkansas related to the company’s violations of the state and federal False Claims Act.

Preferred Family Healthcare provides a services in Missouri, Arkansas, Kansas, Oklahoma, and Illinois, including mental and behavioral health treatment and counseling, substance abuse treatment and counseling, employment assistance, aid to individuals with developmental disabilities, and medical services. Most of the charity’s funding is from appropriated federal funds – the largest portion being Medicaid reimbursement.

By signing the non-prosecution agreement, PFH officials admitted that former officers and employees of the charity engaged in a conspiracy to, amongst other criminal activity, embezzle funds from the charity and to bribe several elected state officials in the Arkansas House of Representatives and the Arkansas Senate.

Under the terms of the non-prosecution agreement, Preferred Family Healthcare will forfeit more than $6.9 million to the federal government and pay more than $1.1 million in restitution to the state of Arkansas related to the misuse of funds from the state’s general improvement fund. Also, as part of the federal investigation, the former chief operating officer and chief financial officer of the charity were indicted by a federal grand jury on March 29, 2019. They pleaded not guilty, and are awaiting trial, which is scheduled to begin on Oct. 3, 2022.

Several former executives from the charity, former members of the Arkansas state legislature, and others have pleaded guilty in federal court as part of the multi-jurisdiction, federal investigation, including the following:

• Former Chief Executive Officer Marilyn Luann Nolan of Springfield pleaded guilty to her role in a conspiracy to embezzle and misapply the funds of a charitable organization that received federal funds. A sentencing hearing has not been scheduled.

• Former Director of Operations and Executive Vice President Robin Raveendran of Little Rock pleaded guilty to conspiracy to commit bribery concerning programs receiving federal funds. A sentencing hearing has not been scheduled.

• Former executive and head of clinical operations Keith Fraser Noble, of Rogersville, Mo., pleaded guilty to concealment of a known felony. A sentencing hearing has not been scheduled.

• Former employee and head of operations and lobbying in Arkansas, Milton Russell Cranford, of Rogers, Ark., was sentenced to seven years in federal prison without parole after pleading guilty to one count of federal program bribery.

• Political Consultant Donald Andrew Jones, of Willingboro, N.J., pleaded guilty to his role in a conspiracy from April 2011 to January 2017 to steal from an organization that receives federal funds.

• Former Arkansas State Senator Jeremy Hutchinson, of Little Rock, pleaded guilty to conspiracy to commit federal program bribery. A sentencing hearing has not been scheduled.

• Former Arkansas State Representative Eddie Wayne Cooper, of Melbourne, Ark., pleaded guilty to conspiracy to embezzle more than $4 million from Preferred Family Healthcare. A sentencing hearing has not been scheduled.

• Former Arkansas State Senator and State Representative Henry “Hank” Wilkins IV pleaded guilty to conspiracy to commit federal program bribery, and devising a scheme and artifice to defraud and deprive the citizens of the State of Arkansas of their right to honest services. A sentencing hearing has not been scheduled.