- Associated Press - Wednesday, March 26, 2014

JACKSON, Miss. (AP) - A federal appeals court has ruled against two men challenging verdicts in a bribery and kickbacks case involving a north Mississippi hospital.

A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans ruled Tuesday in cases against Ray Shoemaker and Lee Garner.

Garner and Shoemaker were tried for various federal crimes arising from a bribe and kickback scheme involving Tri-Lakes Medical Center in Batesville, Miss. The crimes included conspiracy, federal program bribery, paying and receiving health care kickbacks, embezzlement and making false statements to federal agents.

After a federal jury returned guilty verdicts on all counts, the district judge in Mississippi acquitted them and granted new trials on several counts, saying alleged actions of hospital board member David Chandler were used to support allegations against Garner and Shoemaker.

Shoemaker is a former administration at Tri-Lakes. Garner is the owner of a Guardian Angel Nursing/On-Call Staffing.

The government said the two men conspired to increase Garner’s nurse staffing business at the hospital and Garner paid Shoemaker for his help.

Garner was accused of offering to pay Shoemaker $25,000 in exchange for Shoemaker’s influence over the ordering of nursing services for Garner’s company. Court records show Chandler paid Shoemaker $12,000 in the conspiracy.

In August 2012, U.S. District Judge Neal Biggers said the government erred in relying on the alleged actions of Chandler to support allegations against Garner and Shoemaker.

Prosecutors had said Garner paid Chandler a kickback and bribe in the amount of $5 per hour for every hour of nursing services Garner’s nursing company billed and collected at Tri-Lakes.

As part of that scheme, prosecutors said Garner paid Chandler $268,000 between May 2005 and July 2007. Prosecutors said Chandler acted as a middleman between Shoemaker and Garner.

Biggers said prosecutors had to show that the person receiving the alleged bribe - in this case Chandler - had authority to act for the institution.

The government appealed Biggers’ acquittals and the new trials for Garner and Shoemaker. Shoemaker appealed Biggers’ denial of acquittal or a new trial on the remaining counts, of which he alone was convicted.

The 5th Circuit panel vacated Biggers’ acquittals and new trials, and upheld Shoemaker’s other convictions, and sent the case back to Biggers for sentencing.

The 5th Circuit panel said the evidence in the case clearly showed Chandler had decision-making authority over how the hospital spent its money and that was sufficient to convict Shoemaker and Garner.

“Viewing the evidence in the light most favorable to the jury’s verdict, we conclude that evidence of the agreement between Garner, Shoemaker, and Chandler to bribe Shoemaker was sufficient to support the convictions,” the panel said.

Garner, Shoemaker and Batesville doctor Robert Corkern were indicted by a federal grand jury in September 2011 on allegations they carried out a conspiracy to wrongly reward Garner and enrich Shoemaker through a kickback-bribery scheme, as well as multiple lies to lending agencies funding Tri-Lakes.

Corkern and Chandler cut plea deals with the government for their cooperation.

Corkern was sentenced to two years’ house confinement and three years’ post-release supervision for his role in a scheme. Chandler was sentenced to 14 months in prison.

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