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Former YOH Execs Sentenced for Medicare Fraud
CLEVELAND -- The former financial manager for what was Youngstown Osteopathic Hospital yesterday was sentenced for defrauding Medicare fraud, money laundering and wire fraud.Youngstown Osteopathic Hospital closed its doors five years ago after declaring bankruptcy.Richard A. White, who managed operations of the former hospital through his company, Montrose Management of Montrose, Ala., was ordered to serve 90 months in prison and pay $7.2 million in restitution. He was convicted one year ago following a jury trial held before U.S. District Court Judge Patricia A. Gaughan.A second defendant, Michael A. Suhadolnik, the hospital's former chief financial officer, was convicted on one count of wire fraud and was sentenced to 37 months in prison.Judge Gaughan released the defendants on bond, and ordered them to report to the Bureau of Prisons April 25.A third defendant, Raul Sanchez DeVarona, an attorney from Coral Gables, Fla., testified at the trial of White and Suhadolnik. DeVarona pleaded guilty to the conspiracy charges and last April was sentenced to 15 months in prison. A fourth defendant, Patricia Macejko of Canfield, is awaiting trial.Gregory A. White, U.S. attorney for the Northern District of Ohio, said White and his co-defendants conspired to defraud the government by creating a network of Medicare provider companies associated with the hospital. The network, designed by White, was supposed to benefit the hospital, but evidence at trial showed it produced profits to the defendants through inflated costs charged to Medicare. Each of the entities was controlled by White making him a "related party" under Medicare regulations, which prohibit profits between related parties. As a part of the scheme, the relationship White had to the Medicare providers was not disclosed to Medicare, allowing White to charge the providers huge management fees.The scheme extended to five clinics in Florida established by White as part of the "network." DeVarona operated the Florida clinics.The wire fraud count charged that White, Suhadolnik and DeVarona defrauded Youngstown Osteopathic by transferring monies to various entities supposedly to benefit the hospital. Although the Florida clinics received financial support from YOH, White and Suhadolnik did not disclose to the hospital's board of directors that White had established management contracts from which his management company, Montrose Management, would profit. "