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Search warrant targets Ellwood City Medical Center, owner

Updated: Jan 21, 2019

From the New Castle News

A patient awaiting total hip replacement surgery at Ellwood City Medical Center had the procedure canceled after a vendor removed the orthopedic equipment from the operating supply room due to nonpayment.

The unnamed patient, the person’s surgeon and operating staff were never notified prior to the surgery.

The Lawrence County District Attorney’s Office disclosed the information as part of its investigation of the center, Florida-based Americore Health and its founder and CEO Grant White.

With the approval of District Judge Jerry G. Cartwright, detectives from the district attorney’s office served a search warrant yesterday to the legal record department of Northwest Bank, 324 Main St., Wampum.

Investigators are looking into theft of services claims dating back to August. The records they are seeking date back to July and regard nonsufficient funds, returned checks, bounced checks, deposit receipts, wire transfer records, signatory authorization, account sheets and daily balance sheets for accounts belonging to the medical center, Ellwood City Medical Center Real Estate LLC, Americore Health LLC and White.

The affidavit of probable cause, provided to the New Castle News, lists White; Dionna M. Kassalen, Americore Health’s chief financial officer; and Beverly A. Annarumo, the center’s CEO, as persons of interest in the investigation. The action comes as hospital employees and legislators have criticized Americore for failing to meet payroll dating back to August.

Among the district attorney’s early findings is that Americore has access to $6.5 million in cash following lines of credit taken out in October and November.

Financial troubles identified in Ellwood City include failure to make payroll; issuing checks without funds to cover them; issuing checks after 6 p.m. before holidays to allow employees to access funds; bouncing or writing fraudulent employee checks; threatening employees with termination for speaking with the media; failure to pay electric bills owed to Ellwood City; failure to pay vendors for surgical equipment, lab services and health benefits; and accounting for taxable payroll contributions.

The affidavit highlights six interviews with hospital employees, who were not identified. Among those interviewed were “management level personnel who have direct knowledge of the financial distress at ECMC.”

According to the affidavit, Americore Health had problems making payroll starting in August.

Highlights of what employees reported:

•One worker had 11 payroll checks bounced since August. The employee reported having to pay bounced check fees and was not paid for the work performed.

•Another feared loss of job “if they talked with anyone regarding the incidents taking place at Ellwood City Medical Center.”

•Paychecks were issued at times with no paystubs attached.

•Department heads were instructed to tell employees to deposit checks but not cash them.

•On numerous occasions, hospital employees’ bounced checks were replaced with checks from the hospital’s personal account. The second check would then bounce due to insufficient funds.

•At times, hospital employees would demand cash from the hospital’s human records department, which would not approve the requests. In other instances, the hospital directly wired funds into certain employees’ accounts.

•Direct deposits into employees’ accounts stopped prior to August.

•The laboratory testing company LabCorp stopped performing work for the hospital after reportedly being owed $85,000.

•Claimed hospital was unable to pay vendors and emergency room doctors. A group of ER doctors from Texas called in to replace another ER group, who left after reportedly not receiving payments.

The affidavit also noted that Americore bought or was preparing to purchase other financially troubled hospitals. As recently as December, the for-profit organization was preparing to purchase Alexia Hospital Center, located in St. Louis, Missouri, for $10 million. Closing is scheduled for the end of the month.

In addition to the Ellwood City facility, the others included:

•Southeastern Kentucky Medical Center, Pinesville, Kentucky.

Among the issues cited were bouncing payroll checks to employees; failure to pay city taxes; deficiencies that include infection control concerns and revocation of Medicare funding; and failure to ensure funds were available for preventive maintenance on hospital equipment.

•Izard County Medical Center, Calico Rock, Arkansas.

Issues cited were failure to pay software company $600,000 for medical record program and vendors not paid.

•Lee County Hospital, Pennington Gap, Virginia.

The sale failed to materialize after the Lee County hospital authority learned Americore was being sued in New York for unpaid loans that New York-based Business Loan Companies made to Americore and its owner.

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