The corruption case involving four former Schneider Regional Medical Center officials took a surprising turn Monday after all the charges against one of the defendants were dismissed by the judge.
June Adams, the hospital board’s former chairwoman, was until Monday facing charges of aiding and abetting and falsification of government documents, along with perjury, for her role in the alleged scheme involving Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz, who have been accused of funneling money for their own personal use from the hospital’s bank accounts and conspiring to award one another lavish pay packages and perks above and beyond their official government salaries.
But by 9:30 a.m. Monday, the charges against Adams had been dismissed, fueling speculation throughout the day that she had become a government witness, though this has not been confirmed by the Source.
A few details, such as whether the charges were dismissed with or without prejudice, were unclear; and a gag order from the judge –granted during the first day of the trial after a motion was made by Miller’s defense camp — prevents either attorneys or any other officials involved in the case from talking about it.
With Adams gone from the defendant’s table, prosecutors picked up early Monday with their case against Miller, Carty and Najawicz, and focused for at least half the day on educational reimbursement vouchers submitted by Miller during his time as the hospital’s chief executive officer.
Miller attorney Alan Teague has continued to argue that all money Miller received while on the job was outlined in an agreement approved by the hospital’s board, which entitled him to, among other things, a housing allowance and reimbursement for educational expenses or tuition.
Last week, hospital paralegal Allison Spencer detailed the process by which such vouchers were paid, which includes a review of the request by the accounts payable division. While on the stand, Spencer said that the division is responsible for verifying the payments by checking for supporting documentation — testimony that was echoed Monday by Bernice Maynard, a supervisor within the accounts payable division.
Maynard said that in terms of processing the educational reimbursement vouchers, the division looks for invoices sent by the college or university, or a list of grades or class schedule.
While being questioned by prosecuting attorney Denise George-Counts,Miller, Maynard said that MIller submitted copies of only the front side of checks written out to the Medical University of South Carolina, but there was no indication whether the payment was ever made.
Maynard said after she received the first voucher request, she called Miller’s secretary and requested to speak to the hospital’s chief financial officer, but instead later received a call from Miller himself, directing her to make the payment.
When asked by George-Counts why she continued to process Miller’s subsequent requests, Maynard said that Miller had "set the tone" during that initial conversation, and she never again asked any questions.
The voucher requests ranged from $9,455 in June of 2005 to $10,055 in October of 2007. The documents are either signed by Miller alone, or by Miller and Najawicz, who began working as the hospital’s chief financial officer in mid-April 2004.
Under cross-examination from Teague, Maynard conceded that hospital policy allows the CEO to sign off on payments above $5,000, without approval from the board.
An objection from the prosecution cut short Maynard’s answer to a subsequent question from Teague about Miller having to submit supporting documentation — including class schedules or invoices — if his contract with the hospital did not require him to do so.
When asked, however, if she ever requested a copy of Miller’s contract, Maynard said she did but never received it.
Maynard expounded during a re-direct from George-Counts, who asked if Maynard was specifically "denied access" to Miller’s contract.
"I would say yes," Maynard said. "I never saw the whole contract until now. When I would ask about, let’s say the housing [allowance voucher requests], I would only be sent the section that dealt with housing, and for the educational ones, I was told that there was a contract, and that it was being amended, but I never got a copy of that."
During Spencer’s testimony, it was revealed that there were two 2005 employment contracts for Miller, one for $150,000 and the other with a base salary of $265,000. While Teague has contended that the first contract was a "placeholder" that simply prevented Miller’s contract with the hospital from lapsing while additional negotiations were taking place, the government has argued that it was a fraud.
The defense has also argued the difference between the officials’ government salaries and the total salary offered and outlined in their executive compensation packages could be inflated by a variety of perks.
Under questioning by Carty defense attorney Anthony Chambers, the hospital’s Human Resources Director Marlene Adams, said salaries listed in executives’ Notices of Personnel Action (NOPAs) — documents that list, among other things, what an employee’s position is and what they are paid — do not include perks such as relocation expenses, signing bonuses, car allowances, retention bonuses, educational reimbursements or professional development allowances.
"And the things that are not included in the NOPA, you wouldn’t know if they’re coming out of the hospital’s accounts?" Chambers asked.
"Correct," Marlene Adams said.
While Marlene Adams later said that she had "never seen" a stack of additional compensation/stipend agreements shown to her by Teague for a range of other hospital employees, she did explain that Human Resources would know more about what is included in the employees’ NOPAs than their employment agreements with the hospital.
Marlene Adams did add, however, that she was made aware of at least one additional compensation agreement — for the hospital’s current chief operating officer — after a joint federal and local audit about the hospital was released to the public in 2008.
During cross-examination, Teague also noted that certain benefits given to the hospital’s current head, including relocation expenses, are not factored into her NOPA.
And, under re-cross from Chambers, Marlene Adams added that prior to the case becoming public, no employee contracts were included in the hospital’s Human Resources files.
"Stipend agreements were not included or allowances, is that fair?" Chambers asked.
"Fair," she responded.
"And no one expected them to be, did they?" Chambers added.
"I guess not, because it wasn’t being done," she said.
Other files, which included a total compensation package, were included in the files held in the office of the hospital’s general counsel, Marlene Adams said.
The case picks up again 9 a.m. Tuesday.