In hospital executives' corruption trial, defense claims charges are based on 'ignorance' and 'politics'

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ST. THOMAS - Is it about fraud, theft, and breaching the public's trust - or is it about four people wrongly accused, the result of others' ignorance, intimidation and political agenda?

Jurors were presented with both of those views on Friday, when prosecuting and defense attorneys hashed out their positions as opening statements got under way in the trial of four former Schneider Regional Medical Center officials accused of helping each other steal large sums of money from the hospital.

Former hospital executives Rodney Miller Sr., 38; Amos Carty Jr., 45; and Peter Najawicz, 44, are accused of conspiracy, embezzlement and fraud, as well as violating the territory's anti-racketeering statute, the Criminally Influenced and Corrupt Organizations Act, or CICO.

Former hospital board chairwoman June Adams, 82, is charged with aiding and abetting embezzlement or falsification of public accounts and perjury.

The three executives are accused of working together - using tools such as stipend agreements, contracts, letters of direction, benefits and perks - to give the appearance of legitimacy to their scheme to illegally divert large amounts of hospital money into their own pockets.

Defense attorneys contend that their clients have done nothing wrong and that the executives were legally entitled to all the money they received.

On Friday, 12 jurors and four alternates - a total of 10 women and six men - listened attentively as lawyers stood, one by one, and described their view of the case and the evidence jurors would see.

The prosecution

"This case is about fraud, deception, corruption, theft - and a breach of the public's trust," said Assistant Attorney General Denise George-Counts. All the defendants had been entrusted with the care and management of public funds at Schneider Hospital, George-Counts said.

Miller was chief executive officer at Schneider Regional from 2002 to 2007. Carty had been hospital chief operating officer and general counsel during Miller's tenure and succeeded him as CEO. Najawicz was chief financial officer under Miller and Carty.

George-Counts told jurors that the evidence would show that the three executives diverted hundreds of thousands of dollars to themselves illegally.

"That's not about their salaries," she said.

Each of the three executives had a NOPA salary. NOPA stands for Notice of Personnel Action, and it is the form that the V.I. government uses to track a government employee's status, including job title, pay rate, dates of hire, promotion and termination.

However, George-Counts contended that the three men began illegally transferring money in excess of their NOPA salaries, directly from hospital accounts into their personal bank accounts.

As she flashed a depiction of an iceberg - a massive thing, hidden underneath the ocean's surface, but smaller above - on a screen, the prosecutor said that she thinks an iceberg best describes the hospital during that time.

"The thing about the iceberg is that what's above the surface is so deceptively different from what lies beneath," she said. The transfer of funds "wasn't done on the surface. That was done under the surface," George-Counts said.

After Miller was hired as Schneider CEO in 2002, people began to see positive differences in the hospital - from a paint job to shiny floors - and a boost in employee morale, she said. Under his tenure, the hospital also became accredited, which made the hospital board "very proud," George-Counts said.

"Above the surface, the hospital was starting to look better," she said.

Miller chose Carty and Najawicz for his team, she said. Although there were other executives, Miller, Carty and Najawicz seemed to have a certain "cohesiveness," she said.

"What showed on the surface was that this team was accomplishing great things," she said, adding that the case is about what lies beneath.

"The greed, the corruption, the theft, the deceit - that's what lies beneath," she said.

The prosecutor contended that the three executives decided to find a way to make more money from the hospital and deliberately began taking money they were not entitled to, in excess of their NOPA salaries.

At one point, George-Counts said, more than $400,000 was transferred from a hospital bank account to Miller's personal bank account, based on letters of transfer signed by the defendants. From May to November 2007, more than $1.8 million of hospital money was transferred to Miller's personal account, she said.

Miller was to have received a $20,000-per-year housing allowance in quarterly payments under his 2002 contract, which amounts to approximately $5,000 a quarter, George-Counts said. However, at one point Miller began collecting those payments in amounts of $7,500, with Adams authorizing them, George-Counts said.

Later on, Adams wrote a letter authorizing a $45,000 advance on Miller's housing allowance, to which he was not entitled, George-Counts said.

At one point, the defendants went with a note from the hospital board to establish a Scotia Bank account, she said.

They ordered payment of hundreds of thousands of dollars from the hospital's operating account to fund the Scotia Bank account, which she said "became the slush fund for the defendants" - the account from which they illegally paid themselves, the prosecution contends.

The prosecution will prove each and every charge against the defendants, George-Counts told the jury.

The defense

Attorney Alan Teague, representing Miller, told jurors that his client "has had to endure quite a lot over the past few years at the hands of the government." Teague also criticized media coverage of the case, saying that Miller had "already been tried and convicted by local news media."

Fortunately, he said, the law allows for a trial by a jury of peers, he said.

"You will find that all of these defendants have done nothing wrong," Teague said. Instead, he said, they need to be complimented for the things they have done for the community.

The case is not complicated, Teague said, telling jurors that the prosecution wants to misdirect them.

The case, he said, is about ignorance, intimidation and a political agenda. He asked jurors to remember that, as they hear evidence in the coming weeks.

After the hospital board hired Miller in 2002, Miller "performed admirably," Teague said.

He told jurors they would hear evidence that Miller was later offered a job in Illinois with a compensation package of $415,000, with the potential to receive $543,000 annually but that Miller was not done with his work here.

In 2005, the hospital board's executive compensation committee hired consultants to do an analysis on what they should offer Miller to stay at the hospital, Teague said. Miller was being paid in the lower 25th percentile of CEOs at comparable hospitals, and board members said they wanted to pay Miller in the 75th percentile, according to Teague.

There was nothing hidden about the way things were done at the hospital, he said.

In a 2005 statement to the Senate Finance Committee, Miller told senators that the hospital was paying people above their NOPA salaries, Teague said. The hospital has other individuals who make above their NOPA salaries, including a number of doctors, he said.

"My client is a fall guy," Teague said.

He outlined a number of Miller's accomplishments while he was CEO and said that "the better you are at your field, the more you get compensated."

However, when people saw what Miller was making, "all people saw was large dollar signs," and they jumped to conclusions, he said.

He urged jurors not to be fooled by a picture of an iceberg and to listen and see what the defendants have done for the community.

Attorney Anthony Chambers, representing Carty, said that Carty "deserved every dime he got - and maybe more."

"This is the beginning of the vindication of Amos Carty," Chambers said, noting that the truth will come out.

Carty, Chambers said, did his job and did it well.

There is no proof that Carty did anything illegal, he said.

Although Chambers noted that there are "salaries of significance" in the case, he also asked "who doesn't want to be paid what they're worth."

Noting that Carty had been president of the V.I. Bar Association, was active politically and could have made a run for governor, Chambers said Carty's prosecution is a political one.

He contended that the case is simple.

"Nothing was hidden. Nobody lied," he said.

Robert King, representing Najawicz, told jurors he still cringes when he hears the litany of charges against his client.

Najawicz was offered a base salary of $100,000 annually when Miller hired him in 2004, King said. The offer included a $10,000 signing bonus, and a six-month merit increase of $10,000, he said.

His client, he said, did not care where the salary on the offer he accepted came from.

"He just cares that he gets it," King said.

Najawicz now is being charged criminally "for accepting a job on the terms offered," King said, adding that his client has been accused of being part of a conspiracy "he didn't know existed."

Najawicz has been charged criminally for lawfully received raises and car allowances, King said. His client was charged because prosecutors have a theory that if a person is on a NOPA, and receives money over that amount, it is a crime, King said.

It never has been a crime to receive compensation over the amount on a NOPA, he said.

"He did his job. Mr. Najawicz is here because he did his job, and he doesn't agree with the government on certain things," King said.

The real crime, he said, is that Najawicz is sitting at the defense table.

He told jurors to listen carefully to the evidence and to hold prosecutors to their burden of proof.

No one gave an opening argument on Adams' behalf.

V.I. Superior Court Judge Michael Dunston said that Adams would reserve comment for the closing arguments.

The prosecution is scheduled to begin calling witnesses when the trial resumes Monday.

- Contact Joy Blackburn at 774-8772 ext. 455 or email

The V.I. Attorney General's Office has organized its case against four former Schneider Regional Medical Center officials into a 50-count charging document.

Although prosecutors originally filed a 144-count charging document in October 2008, the charges have been amended several times since then. Late last year, in response to defense motions, V.I. Superior Court Judge Michael Dunston issued an order directing prosecutors to consolidate some of the charges to eliminate multiplicity and overlap, which they have done.

In some instances, three defendants are charged under a single count. All four have pleaded not guilty to the charges and are standing trial in V.I. Superior Court.

The criminal charges are:

Rodney Miller Sr.

- Violating the Criminally Influenced and Corrupt Organizations Act, or CICO, 2 counts.

- Conspiracy, 1 count.

- Embezzlement by public and private officers, 5 counts.

- Obtaining money by false pretense, 7 counts.

- Embezzlement by fiduciaries, 1 count.

- Embezzlement or falsification of public accounts, 3 counts.

Amos Carty Jr.

- CICO violations, 2 counts.

- Conspiracy, 1 count.

- Embezzlement or falsification of public accounts, 3 counts.

- Embezzlement by public and private officers, 3 counts.

- Obtaining money by false pretense, 2 counts.

Peter Najawicz

- CICO violations, 2 counts.

- Conspiracy, 1 count.

- Embezzlement by fiduciaries, 5 counts.

- Obtaining money by false pretense, 3 counts.

- Certifying officer; accountability, 6 counts.

- Embezzlement or falsification of public accounts, 1 count.

June Adams

- Aiding and abetting embezzlement or falsification of public accounts, 3 counts.

- Perjury, 3 counts.

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