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Charlotte Amalie
Monday, July 4, 2022
HomeNewsArchivesMiller Defense Attempts to Explain Bank Transactions

Miller Defense Attempts to Explain Bank Transactions

Cutting through days of monotonous testimony with jokes that had the witness giggling on the stand, defense attorney Alan Teague tried to shed light Wednesday on the slew of bank transactions that have fueled charges of embezzlement and corruption against former Schneider Regional Medical Center officials Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz.

The three former executives have been charged with violating the territory’s Criminally Influenced and Corrupt Organizations (CICO) act, with prosecutors alleging that the trio awarded each other lavish pay packages and perks outside their official government salaries, and without authorization from the hospital’s board.

At the heart of several of the charges are various money transfers from the hospital’s operating accounts to the officials’ private ones — an indication, the government has argued, that the trio used their positions to siphon off millions for their own personal use, to the detriment of the hospital and its patients.

One particular account, at Scotia Bank, has been described by prosecutors as the executives’ "own personal slush fund," into which large deposits were made, and large sums of money taken out.

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Taking the stand Tuesday was Gail Gonzales Ferreira, a financial manager at the hospital who was also recently designated as its records custodian and charged with compiling thousands of documents in response to government subpoenas issued throughout the course of the case.

While on the stand, Ferreira said she was first authorized by Carty in 2004 — in the absence of the hospital’s then comptroller — to make a transfer into his account from the hospital’s main operating account.

Documents entered into evidence Wednesday includes several payment schedules for Miller, Carty and Najawicz—along with other hospital employees—detailing how much was to be transferred to their accounts and when. Ferreira testified, however, that after November of 2005, she was directed to stop making transfers from the Banco Popular account—around the same time the payments listed on the schedules stopped and the Scotia Bank account, which Ferreira said she helped set up, was created.

While on the stand, Ferreira read from an August 2005 letter from Miller to Najawicz discussing an initial $350,000 deposit into the account, along with a $50,000 deposit every month afterward.

"He [Najawicz] directed me to set up the account, within the hospital’s system and make the deposit," Ferreira testified.

From then on, Najawicz made the payments from the account, while Ferreira said she arranged for monthly deposits — ranging from $50,000 to $75,000 — to be made into it. Ferreira said that throughout the whole process, supporting documentation for the payments was scanty, adding that she never saw any authorization from the hospital’s board for the Scotia Bank account.

In response to questions from government attorney Denise George-Counts, Ferreira took the court on a journey through a number of payments made to Miller between 2005 and 2007, ranging from an initial entry of $30,000, to a final entry of $289,660.

When asked about the $30,000 entry, Ferreira said, "I wasn’t certain about the specific nature of the amount." Ferreira said she then turned to Najawicz, the hospital’s former chief financial officer, for an explanation.

"I recall that he said he’d provide me with support, but I don’t recall receiving it," she said, adding that she eventually made the transfer after Najawicz directed her to.

While George-Counts wrapped up her questioning of Ferreira Wednesday, Teague moved up to take a crack at the witness and delved into the details behind the numbers. Calculator in hand, Teague asked Ferreira to do the math with him, and cross-referenced the payments on the schedule to the benefits included in Miller’s employment agreements — including a June 2005 contract that listed an annual base salary of $265,000, along with various bonuses, incentives and allowances.

With Ferreira also busy calculating on the stand, Teague pointed out what would happen if Miller’s annual bonuses were tallied: the resulting total would reflect the corresponding payment listed on the schedule.

An exhibit, for example, showing a $205,750 transfer for Miller, would include his annual retention benefits, cost of living allowance, spousal travel allowance and housing allowance, Teague said.

"There were two payments that you testified to yesterday in 2006 totaling $102,875," Teague said to Ferreira. "When you multiply that number by two, what do you get?"

"You would get $205,750," Ferreira responded, as Teague pointed to the total on the schedule.

Teague also went through the schedules for Carty, and noted that several payments listed as "bonus" or "stipend" were also given to other hospital employees, with money transferred from the same Scotia Bank account. Those individuals have not been charged in the case, but were being paid the same kind of cash, he added.

Meanwhile, George-Counts also grilled Ferreira Wednesday on documents relating to insurance coverage for the three former execs, running from 2005 to 2009. Interestingly, a letter from one insurance firm outlines coverage conditions for Miller — including premium payments of $10,000 per month for 60 months. Miller, George-Counts pointed out through her questions to Ferreira, left the hospital in 2007.

The trial picks up again 9 a.m. Thursday.

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Cutting through days of monotonous testimony with jokes that had the witness giggling on the stand, defense attorney Alan Teague tried to shed light Wednesday on the slew of bank transactions that have fueled charges of embezzlement and corruption against former Schneider Regional Medical Center officials Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz.

The three former executives have been charged with violating the territory's Criminally Influenced and Corrupt Organizations (CICO) act, with prosecutors alleging that the trio awarded each other lavish pay packages and perks outside their official government salaries, and without authorization from the hospital's board.

At the heart of several of the charges are various money transfers from the hospital's operating accounts to the officials' private ones -- an indication, the government has argued, that the trio used their positions to siphon off millions for their own personal use, to the detriment of the hospital and its patients.

One particular account, at Scotia Bank, has been described by prosecutors as the executives’ "own personal slush fund," into which large deposits were made, and large sums of money taken out.

Taking the stand Tuesday was Gail Gonzales Ferreira, a financial manager at the hospital who was also recently designated as its records custodian and charged with compiling thousands of documents in response to government subpoenas issued throughout the course of the case.

While on the stand, Ferreira said she was first authorized by Carty in 2004 -- in the absence of the hospital's then comptroller -- to make a transfer into his account from the hospital's main operating account.

Documents entered into evidence Wednesday includes several payment schedules for Miller, Carty and Najawicz—along with other hospital employees—detailing how much was to be transferred to their accounts and when. Ferreira testified, however, that after November of 2005, she was directed to stop making transfers from the Banco Popular account—around the same time the payments listed on the schedules stopped and the Scotia Bank account, which Ferreira said she helped set up, was created.

While on the stand, Ferreira read from an August 2005 letter from Miller to Najawicz discussing an initial $350,000 deposit into the account, along with a $50,000 deposit every month afterward.

"He [Najawicz] directed me to set up the account, within the hospital's system and make the deposit," Ferreira testified.

From then on, Najawicz made the payments from the account, while Ferreira said she arranged for monthly deposits -- ranging from $50,000 to $75,000 -- to be made into it. Ferreira said that throughout the whole process, supporting documentation for the payments was scanty, adding that she never saw any authorization from the hospital's board for the Scotia Bank account.

In response to questions from government attorney Denise George-Counts, Ferreira took the court on a journey through a number of payments made to Miller between 2005 and 2007, ranging from an initial entry of $30,000, to a final entry of $289,660.

When asked about the $30,000 entry, Ferreira said, "I wasn't certain about the specific nature of the amount." Ferreira said she then turned to Najawicz, the hospital's former chief financial officer, for an explanation.

"I recall that he said he'd provide me with support, but I don't recall receiving it," she said, adding that she eventually made the transfer after Najawicz directed her to.

While George-Counts wrapped up her questioning of Ferreira Wednesday, Teague moved up to take a crack at the witness and delved into the details behind the numbers. Calculator in hand, Teague asked Ferreira to do the math with him, and cross-referenced the payments on the schedule to the benefits included in Miller's employment agreements -- including a June 2005 contract that listed an annual base salary of $265,000, along with various bonuses, incentives and allowances.

With Ferreira also busy calculating on the stand, Teague pointed out what would happen if Miller's annual bonuses were tallied: the resulting total would reflect the corresponding payment listed on the schedule.

An exhibit, for example, showing a $205,750 transfer for Miller, would include his annual retention benefits, cost of living allowance, spousal travel allowance and housing allowance, Teague said.

"There were two payments that you testified to yesterday in 2006 totaling $102,875," Teague said to Ferreira. "When you multiply that number by two, what do you get?"

"You would get $205,750," Ferreira responded, as Teague pointed to the total on the schedule.

Teague also went through the schedules for Carty, and noted that several payments listed as "bonus" or "stipend" were also given to other hospital employees, with money transferred from the same Scotia Bank account. Those individuals have not been charged in the case, but were being paid the same kind of cash, he added.

Meanwhile, George-Counts also grilled Ferreira Wednesday on documents relating to insurance coverage for the three former execs, running from 2005 to 2009. Interestingly, a letter from one insurance firm outlines coverage conditions for Miller -- including premium payments of $10,000 per month for 60 months. Miller, George-Counts pointed out through her questions to Ferreira, left the hospital in 2007.

The trial picks up again 9 a.m. Thursday.