An Arkansas contractor who took part in defrauding St. Joseph Hospital of at least $532,660 has been sentenced to two years and three months in prison.
Rocky Williams, 50, also was ordered to pay restitution to the hospital. He shares liability for the repayment with James Newton, a former executive at the Lexington hospital who was in charge of hiring contractors.
Newton and Williams admitted taking part in a scheme in which Williams paid Newton bribes in return for Newton steering $8 million worth of work to Williams’ company, called ZaneRock Construction.
The two first teamed up for a kickback scam in 2002 at a hospital in Arkansas where Newton worked at the time, when Williams offered him a new washer and dryer in exchange for contracting work, according to a memorandum filed by Assistant U.S. Attorney Neeraj Gupta.
The Arkansas hospital and Saint Joseph were both affiliated with a company called Catholic Health Initiatives.
After Newton moved to Kentucky, he and Williams continued the kickback scheme, according to court documents.
The two admitted that between 2009 and 2012, Williams gave Newton at least $532,660 in hidden payments for credit-card bills; vehicle and rent payments; and gifts that included a motorcycle, an all-terrain vehicle, vacations, golf club memberships, a pool table and furniture.
Williams claimed he performed the work Newton steered to him “at a fair price and under budget,” implying there was no real victim in the crime, but that was not true, Gupta said in a memorandum.
The $532,660 in bribes represents extra money St. Joseph paid, and doesn’t reflect the full loss to the hospital because it doesn’t include illegal profits Williams kept, the prosecutor argued.
It also doesn’t reflect the damage to honest contractors who lost business because of the kickback scheme.
Williams could afford these bribes for the same reason that his scheme was eventually uncovered, because Williams’ work was regularly low-quality and overpriced, Gupta wrote. “Witnesses at trial would even have testified that in addition to inflating his bills to the hospital, Williams also invoiced and was paid large amounts for work that was never done.”
For example, Williams charged $238,222 to put a new roof on a building but didn’t do the work, according to the motion.
Court records do not describe the work Williams’ company received or the St. Joseph facility where he did it.
U.S. District Judge Danny C. Reeves sentenced Williams Friday in Lexington. He must report to prison Aug. 27.
Reeves also sentenced Newton, 52, to 27 months in prison. He began serving the sentenced in March, according to a news release.
Newton had moved to Florida after leaving the Lexington hospital.