FORMER MEMORIAL HOSPITAL WEST FACILITIES DIRECTOR, WIFE OF FORMER MEMORIAL REGIONAL HOSPITAL TEAM LEADER, AND SEVEN HOSPITAL VENDORS CHARGED IN BRIBERY SCHEME
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, announce the indictment of nine individuals for their participation in a bribery and kickback scheme in connection with the award of facilities maintenance contracts at Memorial Regional Hospital (MRH), in Hollywood, FL, and Memorial Hospital West (MHW), in Pembroke Pines, FL. Both hospitals are part of the Memorial Healthcare System, an organization that receives more than $10,000 in federal assistance each calendar year.
Charged in the twenty-three count indictment are Adil Osman, 64, of Miramar, a former Director of Facilities Management at MHW; Dorece Gordon, 63, of Lake Worth, wife of a former Team Leader in the Facilities Management Department at MRH; and seven vendors who did business with MRH and MHW. The vendors charged in the indictment are Thomas Kennedy, 44, of Davie, Paul Chaiet, 48, of Dania Beach, Richard Cohen, 45, of Wellington, Robert Andrei, 70, of Davie, Thomas Pacchioli, 52, of Weston, John W. Hunter, 64, of Palm Coast, and Louis Columbo, 37, of Lake Worth.
Four defendants (Kennedy, Chaiet, Cohen, Andrei) were arrested earlier today and will make their initial appearances before U.S. Magistrate Judge Anne E. Vitunac, in West Palm Beach, at 10:00 a.m. this morning. Defendants Osman, Pacchioli, Dorece Gordon and Columbo will surrender to U.S. Magistrate Judge Vitunac, in West Palm Beach; no date has been set yet. Defendant Hunter, who was arrested in Daytona Beach, will have his initial appearance in the Middle District of Florida.
Count 1 charges the seven vendors with conspiracy to bribe employees of MRH and MHW, in exchange for being selected to perform certain facilities maintenance contracts, in violation of Title 18, United States Code, Sections 666 and 371. The vendors are also individually charged with substantive bribery counts (Counts 5 - 13), in violation of Title 18, United States Code, 666. In turn, defendant Osman is charged with soliciting and accepting bribes in connection with his employment at MHW from June 2004 through July 2008 (Count 2), in violation of Title 18, United States Code, Section 666.
According to the indictment, Osman was the Director of Facilities Management in the Facilities Management Department at MHW from June 7, 2004 until July 10, 2008. Osman was responsible for contracting with vendors for the purchase of goods and services for MHW. In this capacity, Osman was authorized to unilaterally select the vendors on jobs that cost less than $10,000, but was required to obtain bids from at least three vendors on jobs costing more than $10,000. The indictment alleges that Osman accepted money and in-kind payments, including home improvements, such $1,440 for gutters, a $3,625 deposit for a swimming pool, $3,230 for a fence, $2,000 for cabinets, and $12,000 for an electric generator, from vendors in exchange for selecting them to perform work at MHW. A nearly identical kickback scheme allegedly existed between some of these vendors and former Team Leaders Elliot Gordon and Anthony Merola at MRH. Defendants Elliot Gordon and Anthony Merola were previously charged and pled guilty to a Criminal Information, and are scheduled to be sentenced on July 29, 2011.
According to the charges, the seven charged vendors would inflate their invoices to MHW and MRH to facilitate the payment of kickbacks to Osman and former Memorial Regional Team Leaders. Through this scheme, the vendors allegedly received more than $15 million in contracts from the Memorial Healthcare System from June 2004 through February 2009. In exchange, Osman, Merola and Gordon allegedly received bribes and kickbacks in the form of cash and in-kind payments.
U.S. Attorney Wifredo Ferrer stated, “When individuals engaged in programs receiving federal funds solicit and accept bribes from those intent on paying to gain secret access and reap lucrative contracts, the system has broken down. We will continue to aggressively investigate this conduct act to ensure that government monies don’t fall into the hands of the greedy and corrupt.”
“This investigation reveals how business is not to be conducted in the United States. We cannot tolerate a system in which individuals corrupt the competitive process by selling their integrity through the payment and receipt of bribes at taxpayers’ expense,” said John V. Gillies, Special Agent in Charge of the FBI’s Miami Office. “There is a growing intolerance by the American people for corruption, which is reflected in their willingness to come forward and report abuses. We encourage anyone who may have information about corruption to come forward and report it. That information is critical to our work.”
IRS-CID Special Agent in Charge José A. Gonzalez stated, “The tax system is built on the premise that taxpayers file accurate tax returns. This case should send a message that aiding and assisting in the preparation of false tax returns will be thoroughly investigated and prosecuted.”
In addition, Count 4 charges defendants Cohen and Osman with mail fraud for their involvement in a scheme to defraud MHW by rigging the bidding process on contracts over $10,000. Indeed, Cohen is alleged to have won forty-six bids by essentially bidding against himself through nominee and victim corporations. Defendant Kennedy is charged with engaging in a similar scheme to defraud MRH (Count 3), using fictitious bid proposals utilizing separate nominee and victim corporations. In both instances, the victim corporations were unaware that their names were being used by the defendants to submit bids.
Defendant Chaiet is charged with nine counts of assisting in the preparation of multiple fraudulent individual and corporate income tax returns by knowingly deducting personal expenses as business deductions, in violation of Title 26, United States Code, Section 7206(2) (Counts 14- 19 and 21-23). More specifically, Chaiet, a Certified Public Accountant, is alleged to have prepared false income tax returns for Dorece Consulting Services, Whitehead Industries, and Elliot Gordon for taxable year 2005. He is also charged with preparing false income tax returns for taxable year 2006 for Whitehead Industries, RSM&F Enterprises, and Dorece and Elliot Gordon. For 2007, he is alleged to have prepared false income tax returns for Elliot Gordon and Anthony Merola.
Lastly, defendant Dorece Gordon is individually charged with filing a false tax return, in violation of Title 26, United States Code, Section 7206(1) (Count 20), by failing to report cash payments and proceeds allegedly received through Whitehead Industries and Dorece Consulting, and improvements to her home, totaling approximately $175,723.
If convicted, the defendants each face a statutory maximum terms of imprisonment of up to five (5) years on the conspiracy charge, ten (10) years on the each of the substantive bribery counts, twenty (20)years on the mail fraud charges and three (3) years each on the tax offenses.
Mr. Ferrer commended the investigative efforts of the FBI and the IRS Criminal Investigation Division. Mr. Ferrer also thanked the management and security personnel at Memorial Healthcare System for their assistance and cooperation in this investigation. The case is being prosecuted by Assistant U.S. Attorney Neil Karadbil.
Anyone with information about corruption should contact the FBI at (305) 944-9101.
An indictment is only an accusation, and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.