FRANKFORT — Federal authorities are investigating two former Cabinet for Health and Family Services employees who were fired in May 2008 after officials discovered they were allegedly living rent-free in homes owned by a nursing home operator.
Sharon Harris, a former nurse with the cabinet, and Moses Young, a former assistant director with the Office of Inspector General who had oversight over nursing homes, were fired after cabinet officials learned that the two were living in Lexington-area homes owned by Ralph Stacey Jr., who is an owner of the Garrard Convalescent Home in Covington.
When asked, neither Young nor Harris could provide proof that they had paid rent to Stacey, cabinet records show.
Harris and Young are appealing their May 2008 terminations to the state Personnel Board. In board documents, an attorney for Harris and Young asked that the appeal be stayed because of a federal investigation.
The motion to stay was filed in December 2008. The case is still on hold, pending the outcome of the federal investigation, board records show.
Thomas Clay, a Louisville attorney who represents Harris and Young, said Thursday that he could not comment on the ongoing federal probe. A spokesman with the FBI said he could neither confirm nor deny an investigation of the matter.
Stacey could not be reached for comment.
Cabinet officials said they could not confirm that the FBI is investigating their former employees or who is the target of the investigation.
"However, as a general rule, the cabinet would cooperate with such an investigation, if requested to do so," said Gwenda Bond, a spokeswoman for the cabinet.
Questions about Harris, Young and their relationship to Stacey circulated for nearly seven years before Harris and Young were terminated in 2008.
In fact, Harris had been fired in 2002 over questions about her relationship with Stacey, but was later reinstated, according to a cabinet investigative report released to the Herald-Leader in July 2008.
Harris was working for the Office of Inspector General in 2001 when, at the end of an inspection at Garrard Convalescent Center, she expressed concerns to Young about what was found at the inspection.
Young was not Harris' supervisor at the time, and the conversation seemed inappropriate to other inspectors who were there at the time.
Harris at first refused to turn over an audio recording of that exit interview to other OIG investigators, according to documents released by the cabinet. When Harris finally turned over the tape, the conversation between Harris and Young had evidently been erased, according to cabinet records.
No action was taken as a result of that investigation, cabinet records show.
But in 2002, Harris' involvement with Stacey came under scrutiny again.
Harris had transferred to the state Medicaid office at the time, but OIG inspectors found Harris at Garrard Convalescent Center during an inspection. Harris said she had a contract with the nursing home, but she was ultimately fired because she had failed to disclose the contract to the cabinet.
The Personnel Board later voted 6-0 to reinstate Harris with full back pay.
In a separate OIG investigation in 2006, there were allegations that Stacey was getting prior notice of surprise inspections. That allegation was ultimately unsubstantiated, cabinet documents showed.
The cabinet investigative report also said that Harris, during the 2008 investigation, had been secretly taped saying that she had never paid rent to Stacey.
Cabinet officials allege the two had lived in Griffin Gate neighborhood homes in Lexington since 2005.
Young, who oversaw nursing home inspections, was also fired for allegedly calling Stacey before, during and after inspections of his nursing home, according to cabinet records. Young also participated in other matters involving Stacey but never disclosed to cabinet officials that he was living in a home owned by Stacey.
Young told investigators that he paid his rent to Stacey in cash.
The two have appealed their terminations saying they were unfairly singled out by the inspector general and that the cabinet failed to follow policy by not allowing them to have attorneys present during questioning about their living arrangements.
Harris also said she should not have been terminated because she was not working for the Office of Inspector General at the time she was living in Stacey's home.