Although its owner will soon be sentenced to federal prison, Mercy Regional Ambulance Service will continue to provide ambulance service to Franklin County until a suitable alternative is found.
At a hearing Thursday in East St. Louis, Clay Hobbs, 30, entered a guilty plea to 16 counts of failing to pay over $1.7 million in federal employment taxes to the Internal Revenue Service that had been withheld from employees. He will be sentenced on Dec. 5, 2008.
Mercy Regional Health Systems, LTD, which operated Mercy Regional and Effingham Advanced Ambulance Service, pled guilty to one count of false statements relating to healthcare matters, one count of embezzlement from an employee benefit plan, one count of healthcare fraud and two counts of mail fraud.
According to U.S, Attorney for the Southern District of Illinois A. Courtney Cox, evidence presented at Thursday's hearing showed that from February 2002 through March 2008, Mercy Regional Health Systems LTD., which was operated by Hobbs, made false statements to its employees relating to their healthcare coverage, as well as withheld 401(k) contributions from its employees but failed to forward the contributions to the employees' 401(k)l plans.
The company filed false and fraudulent claims with Medicare and the Illinois Department of Public Health through the Medicaid Program and sent fraudulent bills to the Illinois Department of Public Health through the use of the United States Postal Service.
Under terms of the plea agreement Hobbs and Mercy Regional Health Systems LTD. must pay significant restitution to the government and affected parties.
Restitution includes $118,000.50 for employees' unpaid medical insurance claims, $1,415 in underfunded 401(k) contributions, unpaid prevailing wages to employees in the amount of $40,557.03, fraudulent billings to Medicare in the amount of $24,734.26, and Medicaid in the amount of $69,815.50, fraudulent billings to the U.S Railroad Retirement Medicare in the amount of $10,965.66, and unpaid federal payroll taxes to the IRS in the amount of $1,730,268.23.
Mercy Regional Heath Systems LTD. has been operated by a court-appointed receiver since shortly after Hobbs' indictment. That set-up will continue until a replacement service can be found.
At that time all of the assets of the company will be liquidated to satisfy the restitution requirements.
The case was investigated by the Internal Revenue Service, Criminal Investigation, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, U.S. Department of Health and Human Services, Office of Inspector General, U.S. Department of Labor, Employee Benefits Security Administration, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Franklin County Sheriff’s Department, and the Illinois State Police.
The cases were prosecuted by Assistant United States Attorney Norman Smith.
