Schneider execs retrial begins today
Published: October 9, 2012
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The retrial of three former Schneider Regional Medical Center executives on charges that they conspired together to steal money from the hospital is set to begin today, four years - almost to the day - after they first were arrested in the case.
Jury selection for the retrial of Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz is scheduled to begin this morning, although some outstanding issues remain, including an appeal pending before the V.I. Supreme Court and the fact that Miller may not have hired an attorney yet, that could affect whether the trial moves forward.
Miller, 40, Carty, 47, and Najawicz, 45, are accused of conspiracy, embezzlement, grand larceny and fraud, as well as violating the territory's anti-racketeering statute, the Criminally Influenced and Corrupt Organizations Act, or CICO. They were arrested in October 2008 after a joint federal-local inspectors general audit sparked a criminal investigation.
Former hospital board chairwoman June Adams, 84, also was arrested at the time, but she has since become a witness for the prosecution and all charges against her have been dropped.
Prosecutors contend the three men worked 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 hospital money into their own pockets.
The men have pleaded not guilty to the charges. Defense attorneys have argued that the men did nothing wrong and legally were entitled to the money they received.
Miller was chief executive officer at Schneider Regional from 2002 to 2007. Carty had been the hospital's chief operating officer and general counsel during Miller's tenure and succeeded him as CEO. Najawicz was chief financial officer under Miller and Carty.
In August 2008 - while the criminal investigation was going on, but before any charges were filed - a judge issued a temporary restraining order freezing bank accounts, cars and homes belonging to Miller, Carty and Najawicz under a provision of CICO that subjects a person convicted of a violation to forfeiture of any real or personal property derived from that criminal activity. The freezing of assets is aimed at keeping them within the government's reach.
Later, as the case proceeded, the temporary restraining order was replaced by an injunction.
At this point, a portion of the men's assets have been frozen by court order for more than four years, although information at a recent hearing indicated that a bank had sold Miller's Florida home at auction, and there have also been instances when money that had been ordered frozen was removed from accounts in the names of Miller or his wife.
The first trial
The first trial started in May 2011.
Punctuated by frequent, whispered sidebar conferences, the trial was a lengthy, document-laden proceeding that plodded along during the course of weeks.
Ultimately, after five weeks of testimony and 5½ days deliberating, the jury could not reach a unanimous verdict on any one of the 44 charges that made up the case at that point.
On June 24, 2011, V.I. Superior Court Judge Michael Dunston declared a mistrial.
Prosecutors said that same day that they would retry the case.
This time around, Dunston has said, he wants to cut the trial time in half, to three weeks instead of six.
The judge has encouraged more streamlining on the case, urging lawyers to sit down together and comb through documents to determine which ones they can agree to admit into evidence by stipulation, thereby avoiding having to spend time laying the groundwork in testimony to get each piece of paper admitted into evidence individually.
Despite the plodding nature of some of the testimony at the first trial, there were moments of drama, including Dunston's announcement in the second week that Adams would no longer be a defendant after prosecutors dropped all charges against her.
Much trial testimony focused on two of Miller's contracts, dated in 2005 and 2007, that had a lucrative schedule of benefits attached to them that prosecutors contend Miller and Carty unlawfully inserted into the contract without the board's knowledge or consent.
However, former hospital board members offered conflicting recollections and testimony about what they said they agreed to for Miller's compensation. At least one of the board members had to answer questions about contradicting himself in separate sworn statements he made in 2008.
Defense attorneys made much of the fact that the audit blames the executives and the board members for the problems it uncovered.
Testimony on Rabbi trusts and wire transfers of large sums of cash to personal bank accounts featured prominently in the trial, as did employee loans and bonuses to others besides the three executives that were charged.
One of the more dramatic moments in the last trial occurred when Najawicz's attorney played a recording of board members huddling in executive session in June 2008, discussing how they might respond to the forthcoming audit.
Najawicz is not present at the meeting on the tape, and at one point, board members discuss the possibility of making him the public scapegoat for the payments that went to Miller - some of the payments that are now at the crux of the case.
In September, Dunston issued an order denying a motion by Najawicz to dismiss the charging document based on double jeopardy.
"Given that there was manifest necessity to declare a mistrial, defendant may be retried without violating the Double Jeopardy Clause," Dunston wrote in his opinion on the matter.
In a notice of appeal his attorney filed Thursday, Najawicz appealed that ruling to the V.I. Supreme Court. It was not clear whether that appeal in the higher court could push back the start date of the retrial.
Robert King, Najawicz's attorney, did not return a Daily News call last week.
Another issue before the court is legal counsel for Miller and Carty.
Attorneys for Miller and Carty from the first trial asked to withdraw because of nonpayment, and Miller and Carty have been, for some time, representing themselves in pre-trial matters until they could obtain counsel. Carty is a practicing attorney himself, but Miller is not.
It was not clear last week whether either man had retained legal counsel, or whether Dunston would allow the trial to proceed with Miller and Carty acting pro se.
- Contact Joy Blackburn at 714-9145 or email firstname.lastname@example.org.