Originally created 05/11/05

Mental health center cashed in insurance

Even before five men were convicted of defrauding it of $2 million, the Community Mental Health Center of East Central Georgia had been reimbursed a substantial portion of the money.

The center was actually paid $1.4 million on a claim it filed on an insurance policy that covers employee dishonesty, said Joe Kim, the director of legal services for the Georgia Department of Administrative Services, which handles the claims. The money was paid back in December, months before the federal health care fraud convictions of former Georgia Rep. Robin Williams, former center director C. Michael Brockman, pharmacist Duncan Fordham and lobbyists M. Chad Long and Rick L. Camp.

"Actually the policy doesn't require a conviction," Mr. Kim said. "Obviously a conviction slams the door on whether the payment is required."

The insurance carrier, Great American Insurance Co., likely did its own investigation before paying about $1 million, to which the state added about $440,000, Mr. Kim said.

"They're not going to make a determination whether a 'crime' was committed, just whether it's a 'dishonest act,'" he said.

The Augusta center chose not to discuss the payment publicly for fear of weakening the prosecution's case, said CEO Chuck Williamson.

"We tried to keep that as close and confidential as possible until the resolution of the case," he said. "It's something that we thought would possibly be a detriment to the case as it went forward."

The money is being kept in an account as a kind of contingency fund, Mr. Williamson said.

"It's more of a rainy-day fund at this point than anything else," he said. "The fact of the matter was, due to everything that happened, we had nothing. We had no type of contingency, and it was a month-to-month operation."

The center is still running a deficit of about $35,000 but is hoping to break even by the end of the fiscal year June 30, Mr. Williamson said. But the center is also facing a potential 20 percent cut in its $7.4 million in state funding and other potential financial pitfalls, Mr. Williamson said.

"That's the kind of thing we have to guard against, future cuts," he said.

As part of the conviction in U.S. District Court, the five men surrendered more than $1 million that will be divided among state, federal and local agencies. Restitution will be part of sentencing, which will likely come in a few months. And the insurance settlement doesn't settle that matter for those convicted, said Russ Willard, spokesman for the Georgia Attorney General's Office, which helped prosecute the case.

"The state is still out those funds, and the insurance company is still out those funds," he said.

That will likely be an issue that the attorneys discuss during presentencing talks, said Michael C. Garrett, one of two attorneys representing Mr. Williams.

Restitution should be "an amount to make a victim whole," Mr. Garrett said. "When a victim has already been made whole, I look at it differently."

Reach Tom Corwin at (706) 823-3213 or tom.corwin@augustachronicle.com.


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