PITTSBURG—Several people tied to the rural healthcare management company EmpowerHMS, which operated Oswego Community Hospital in Labette County until last year, when the medical facility closed after failing to pay employees for weeks, were indicted this week on conspiracy charges involving an alleged $1.4 billion criminal scheme.


"This was allegedly a massive, multi-state scheme to use small, rural hospitals as a hub for millions of dollars in fraudulent billings of private insurers," Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division said in a press release. "The charges announced today make clear that the department is committed to dismantling fraud schemes that target our health care system, however complex or elaborate."


Among those charged are Jorge Perez, Aaron Durall, Seth Guterman, Neisha Zaffuto, and Christian Fletcher, who were named in The Pittsburg Morning Sun’s reporting on the alleged hospital fraud last year.


Perez, Durall, Guterman, Zaffuto and Fletcher are each charged with conspiracy to commit health care fraud and wire fraud, conspiracy to commit money laundering, as well as substantive money laundering. Perez, Guterman and Durall are also charged with substantive health care fraud. Others charged in the alleged scheme include Florida residents Ricardo Perez, James Porter Jr., Sean Porter, Aaron Alonzo, and Nestor Rojas. None of those charged are residents of Kansas or neighboring states.


"Health care fraud impacts the cost of health care for all of us and affects the viability of hospitals and other health care facilities across rural Missouri. Those responsible for fraud must be held accountable, and my office remains committed to working with federal law enforcement to seek justice in these cases," said Missouri State Auditor Nicole Galloway, who issued a statement on the charges this week.


As the Morning Sun has previously reported, the scheme allegedly involved improperly over-billing insurance companies for urinalysis drug tests and blood tests.


"All told, the Justice Department claims, the conspiracy resulted in $1.4 billion in sham billings over just more than two years and caused insurance companies to pay out $400 million in reimbursements," the Kansas City Star reported this week.


Pam Green, a former night charge nurse at a hospital in Horton, Kansas, which was also managed by EmpowerHMS before closing its doors last year, told Kaiser Health News that she hopes Perez and his associates receive lengthy prison sentences.


"He just devastated so many people, not just in Kansas, but in Oklahoma and all the other places where he had hospitals," Green said. "I went months and months without pay, without health insurance. He robbed the community."


Perez has never responded to the Morning Sun’s past requests for comment or those of many other media outlets, but did give a rare interview to KHN last year.


"I wanted to see if I could save these rural hospitals in America," Perez said at the time. "I’m that kind of person."