- Associated Press - Monday, January 27, 2014

CHEYENNE, Wyo. (AP) - A former administrator who pleaded guilty to defrauding hospitals in Wyoming and Indiana must serve more than 10 years in prison, a federal judge ordered Monday.

U.S. District Judge Nancy Freudenthal sentenced Paul Cardwell to serve 121 months and pay restitution of nearly $1.7 million.

Cardwell pleaded guilty last year to two counts of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.

Prosecutors say Cardwell took nearly $850,000 from Powell Valley Healthcare in 2011 and took about the same amount between 2003 and 2009 from White County Memorial Hospital in Monticello, Ind.

Auditors discovered the scheme in 2011. Three weeks before his trial was set to start, Cardwell disappeared while free on bond in the summer of 2012. He was arrested in Thailand last June and extradited to the United States.

Prosecutors said that Cardwell defrauded both hospitals by funneling money to co-defendant Michael J. Plake of West Lafayette, Ind. Freudenthal last year sentenced co-defendant Plake to 30 months in prison.

Cardwell directed payments to a firm Plake established ostensibly to recruit medical personnel for the hospitals, prosecutors have said. They said the men didn’t do any actual medical recruiting and that Plake kicked back the bulk of the money to Cardwell.

HealthTech Management Services, a private company, operated the Powell company and retained Cardwell to work there after his tenure in Indiana. Company officials testified Monday that Cardwell’s deception damaged both the reputation of the company and of the Powell hospital.

William Patten Jr., the current CEO of Powell Valley Health Care and an employee of HealthTech, said the loss of $850,000 created serious financial challenges for the hospital, some of which he said it’s still struggling to overcome.

Tracy Copenhaver, a Powell lawyer representing the hospital, urged Freudenthal to give Cardwell the maximum sentence.

Copenhaver emphasized that Cardwell was arrested in Thailand after fleeing the United States on a false passport. “He’s not here because of remorse,” the lawyer said. “He’s here because he got caught or he’d still be spending our money over there.”

Copenhaver said he suspects Cardwell still has some of the hospitals’ money hidden away.

Defense lawyer James Voyles of Indianapolis urged Freudenthal to sentence Cardwell below federal sentencing guidelines, recommending a term of 63 to 78 months in prison. Voyles said Cardwell’s sentence should be in line with Plake‘s.

Voyles said it was hard to reconcile Cardwell’s life history of success in school, sports and business together with extensive community volunteer work with his criminal behavior. “He’s certainly someone who has got to reflect on his own conduct,” the lawyer said.

Federal prosecutor Lisa Leschuck recommended Freudenthal sentence Cardwell to 121 months.

Cardwell stood at courtroom lectern in orange jail clothes and shackles to address the judge. He apologized to the citizens of Powell and of Monticello, Ind., and asked them to forgive him.

Then Cardwell declared himself to be prideful, arrogant and a thief. “I simply convinced myself that the money I was stealing through Plake and Associates was due to me because of the work I was doing,” he said.

But Cardwell said his crimes must be balanced against the good he said he’s done in his 47 years. He said he went to Thailand to bring his one-year-old son there back to the United States. And he said he’s been teaching Bible study and other classes to inmates in jail since his arrest.

In pronouncing sentence, Freudenthal called it a “troubling, fraudulent scheme” to take so much money from community hospitals that struggle to keep operating.

Freudenthal noted that Cardwell didn’t back his young son back to the United States. She said that only through the work of law enforcement in both countries did Cardwell get back to the United States to face sentencing.

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