Who ruined Cleveland?

On the home page of this publication is a December 23rd Chattanooga Times Free Press report titled "Feds: Life Care plan started at top", which contains a synopsis of federal fraud charges bought against Cleveland based Life Care Centers of America. Among the charges are that Life Care engaged in a widespread scheme to defraud Medicare and tried to cover up wrongdoing by punishing employees who complained of the possible illegal practices. The cost of Medicare is being blamed for a large part of the US budget deficit and lawmakers are demanding Medicare fraud be stopped, but it seems in this case the federal prosecution team which includes Elizabeth Tonkin, who works in the U.S. Attorney's Office for the Eastern District of Tennessee in the Knoxville office, is being less than enthusiastic in the prosecution process. Her team unnecessarily sealed the case from public scrutiny causing criticism from a federal judge. It seems to be an example of federal prosecutors themselves attempting to cover up a Medicare fraud case they were investigating.

The case was sealed by prosecutors since 2008, and was only opened after a request from the Chattanooga Times Free Press.

After the request a federal judge issued a scathing opinion in which he put federal prosecutors "on notice" for keeping a Medicare fraud case under seal for four years. The opinion and documents in the long-running case were unsealed by U.S. District Judge Harry S. "Sandy" Mattice. The entire lawsuit was kept under seal from the time of the filings under seemingly false pretext, according to Mattice's opinion. Whistle-blower lawsuits are allowed to stay under seal for 60 days while prosecutors evaluate the case and determine whether the U.S. Department of Justice will get involved. Keeping the cases sealed is supposed to "prevent alleged wrongdoers from being tipped off that they were under investigation," Mattice wrote. But the prosecutors admitted they had begun settlement negotiations with Life Care in June 2010. The company's top officials were fully aware that they were being investigated. "The length of time this case has remained under seal borders on the absurd," Mattice wrote.

Life Care Centers of America is reported to be the 181st largest privately owned company in the US and operates more than 260 assisted and independent living facilities, retirement centers and nursing facilities in 28 states. Life Care also provides home care agency services. The company generates $2.69 billion in annual revenue and employs more than 38,000 people.

Most of our Cleveland readers will know that Life Care is owned by local businessman, Forrest Preston, a prominent and influential member of Cleveland's elite, and most of them will not be surprised by the charges or the way Preston, through his company managers, are alleged to have treated employees. Using a threat of being fired as a way to intimidate honest employees seems to be a stock-in-trade tool to cover up shady dealings by Cleveland's prominent business leaders. The fact that this town could be described as the epicenter of the Bible Belt does not seem to stifle the scandal its leaders create. If the charges are proven, Preston will join a growing list of corrupt or otherwise tainted leaders to have focused disgrace upon an otherwise upstanding community.

It seems to be no coincidence that the people tarnishing Cleveland's good name tend to be part of the same powerful group that run, and benefit from, Cleveland's small town image and lifetime Bradley County born residents. It also seems no coincidence that the so-called "good ol' boys" are powerful in the Cleveland / Bradley Chamber of Commerce and its partner, Cleveland Associated Industries. Two entities that I believe work contrary to the interests of ordinary citizens but prosper by getting nothing but praise from local press and covering up misdeeds. It is interesting that while intimidation by this group can easily be used to cover up wrongdoing in Cleveland, they don't find other communities such easy prey. In the case of the accusations against Life Care Centers of America, and its owner Forrest Preston, the scheme to overcharge Medicare was disclosed in 2008 by two whistle-blower employees from Life Care facilities in Morristown, Tennessee, and Lauderhill, Florida.

Sometimes in cover-up cases such as this, as word leaks out, more and more victims are emboldened to come forward to help prosecutors cement their case. The Bernie Madoff investment fraud case cascaded into personal wrongdoing that cost an otherwise untouchable and influential participant many years in the penitentiary. In the Life Care case of alleged Medicare fraud it is worrying that prosecutors seem to be helping Life Care avoid responsibility by artificially keeping charges hidden from the press, something wrongdoers from Cleveland have attempted to do in the past. And, the fact that the federal government is lending itself to be part of a cover-up protecting Medicare fraud and abandoning its responsibility to the elderly that were possibly harmed by its practices, calls into question the integrity of the prosecutors involved.

There is no guarantee that this time Preston, even with an estimated personal fortune of $600 million, will have enough money or influence to prevail against determined federal prosecutors armed with eyewitness accounts and a watchful public. Either way, his reputation and that of his home town will be forever tarnished.

That's what I think. What do you think?


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