Aug. 22, 2008 — Of three defendants scheduled to appear before V.I. Superior Court Judge James Carroll III Friday to challenge a court-ordered freeze on their assets, one got dropped from the docket, one simply did not appear and one got arrested.
Schneider Regional Medical Center CEO Amos Carty was originally scheduled to appear along with SRMC's chief financial officer, Peter Najawicz. Carty's name was removed from the docket. Najawicz, to Carroll's puzzlement, didn't show at all. Miller did appear, hours after his arrest earlier Friday morning. (See "Former Hospital CEO Arrested on Fraud Charges.")
Carty and Najawicz are on paid leave at the request of Gov. John deJongh Jr. (See "Top Schneider Officials Going on Paid Leave for Investigation.")
When Carroll asked Najawicz's attorney, Michael Fitzsimmons, why his client was not in court, Fitzsimmons contended that Najawicz was not ordered to appear, and he didn't see why he had to.
Carroll referred to a heated debate earlier between Fitzsimmons and Assistant Attorney General Denise George-Counts about Najawicz's property, questioning why Najawicz wouldn't want to defend himself.
"This has been very stressful for my client," Fitzsimmons said. "He showed up on Monday only to have you see the attorneys alone in your chambers. And this morning it took more than an hour for us to get started."
Responded Carroll, "Well, I guess he can read about it in the papers."
Carroll granted an ex-parte request of V.I. Attorney General Vincent Frazer on Aug. 5 to temporarily freeze personal assets — including bank accounts, vehicles and homes — of Carty, Najawicz and Miller. An ex-parte proceeding is conducted with only one side present, with no notice to the other side. The temporary restraining order (TRO) would ensure that, should criminal proceedings ensue, the assets could be subject to forfeiture if the three are charged and convicted under a section of the V.I. Code called the Criminally Influenced and Corrupt Organizations Act (CICO).
Fitzsimmons argued Friday that the order was unconstitutional, and that it was otherwise flawed because it was filed under the wrong statute. He maintained that it alluded to "criminal activity" that has not been proven. He also made clear that his client, Najawicz, should not be lumped in with proceedings against Miller.
"Mr. Miller should be considered separately from my client," Fitzsimmons said. "There are different charges."
Fitzsimmons said he didn't wish to defend Najawicz's ownership of property "today."
"Then why are we here today?" Carroll asked.
His client is being charged under the wrong legal premises, Fitzsimmons maintained.
Court filings indicated Najawicz owns five residences. He claims he owns only three, and that the court has no right to say how Najawicz paid for these properties. George-Counts admitted the court was in error on that point, acknowledging Najawicz's assertion that he only owns three properties. Najawicz objected to the language in the charging document, an affidavit filed by Nicholas Peru, a special agent with the V.I. Inspector General's Office.
Peru's allegations were based on information in a widely circulated audit released July 29 by the offices of the inspectors general of the Department of the Interior and the Virgin Islands. In its 25 pages, the audit indicates the medical center's top three executives — Miller, Carty and Najawicz — were paid hundreds of thousands more than what was outlined in their employee contracts, used the center's official credit card for at least $317,200 in personal purchases, and worked hand in hand with board members to misrepresent financial figures and prevent the release of financial documents to investigators working on the audit.
The government claims in the affidavit that Najawicz facilitated the receipt of "several thousand dollars" from SRMC to himself from 2004 to 2007, transferring illegal funds to his personal bank accounts. Fitzsimmons called the figure "ambiguous."
"How much is several thousand?" he asked.
And, he claimed, the government hasn't shown probable cause.
George-Counts insisted the government indeed has probable cause. Charges "of a much more serious nature, criminal charges, will follow within the next six weeks," she said. The TRO is an "emergency measure" in the event assets were being "moved around or taken elsewhere," George-Counts said.
Carroll gave the attorneys until Aug. 27 to file motions and until Aug. 29 to respond.
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