Crime

‘No one to fault but myself.’ Ex-hospital executive sentenced in bribery, kickback scheme

St. Joseph Hospital in Lexington
St. Joseph Hospital in Lexington gkocher1@herald-leader.com

A former St. Joseph Hospital executive was sentenced Friday to 27 months in prison for steering work to a contractor in exchange for at least $532,660 in bribes and kickbacks.

James Newton, 50, pleaded guilty in September for a three-year conspiracy to commit mail and wire fraud against St. Joseph Hospital by assigning contracting work to Rocky Williams.

“I have no one to fault but myself,” Newton said as he read a written statement in court. He apologized to St. Joseph and its parent, Catholic Health Initiatives, “for any hurt I may have caused due to my actions.”

Newton, who now lives and works in Florida, asked for mercy from U.S. District Judge Danny Reeves “even though I’m not worthy of it.” He added: “I don’t intend to let this define me as a person.”

Newton and Williams will be jointly responsible for restitution of the $532,660.

The bribes and kickbacks took the form of unauthorized and concealed payments of credit card and fuel card bills, vehicle and rental payments, and other gifts such as a motorcycle, an all-terrain vehicle, vacation, golf club memberships, a pool table, furniture and home furnishings, according to court documents.

Williams, 50, pleaded guilty last month to one count of conspiracy to commit mail fraud and wire fraud.

The government maintained that the payments over three years enabled Newton to conceal nearly $180,000 of bribes and kickbacks each year from anyone auditing his financial statements for extra income or unexplained deposits.

Similarly, no one auditing Williams’ financial statements would recognize that Williams’ expenses also included expenses for Newton and his family, court documents say.

“The purpose of that was to conceal the relationship” between the two men, said Assistant U.S. Attorney Neeraj Gupta in court.

It was only through a grand jury investigation of both men and the subpoenas of bank records that the FBI identified numerous vendors collecting money from Williams but providing services to Newton.

“Newton’s $532,660 gain does not even capture the full loss to the hospital because it does not include Williams’ profits from the scheme or the annual salary paid to Newton,” Gupta wrote in a sentencing memorandum. “The harm from Newton’s pay-to-play scheme also affected honest contractors in Lexington who lost business because they were not willing to bribe Newton in exchange for construction and maintenance work.”

Information on the work performed or the St. Joseph location where it was performed was not provided.

The sentencing memorandum said Newton “demanded a monthly stream of payments between 2009 and 2012. Before he and Williams moved to Lexington, they conducted their scheme in Arkansas.”

Had the case gone to trial, Gupta was prepared to present evidence that Williams gave payments and gifts to Newton between 2002 and 2008. During that time, Newton assigned to Williams contracting work of Newton’s then-employer, St. Vincent Hospital in Arkansas. St. Vincent, like St. Joseph, is affiliated with Catholic Health Initiatives.

Defense attorney Brandi Lewis said Newton tried to disengage from Williams but that Williams threatened to expose that Newton was taking bribes.

Newton must report to the prison to which he is assigned on March 12. Williams is scheduled to be sentenced March 23 in Lexington.

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