Hospital CEO sued for allegedly embezzling $850K

The former CEO of Powell (Wyo.) Valley Healthcare faces a lawsuit for allegedly embezzling nearly $850,000 while he was head of the nonprofit hospital system, the Powell Tribune reported.

HealthTech Management Services Inc., the company that provides management services to Powell Valley, employed Paul Cardwell to oversee the company's operations and filed suit Thursday against him. The lawsuit alleges that Cardwell authorized spending $847,934 between March and September to recruit physicians and other personnel to Powell Valley Healthcare and that the money was sent to a "straw company," set up by Cardwell's acquaintance, which then kicked a "substantial" amount of Powell Valley Healthcare's money back to Cardwell.

When Powell Valley Healthcare and HealthTech requested documentation to support the payments, Cardwell offered up "inauthentic" contracts and invoices from the straw company, the lawsuit claims.

Cardwell abruptly resigned in September 2011 to resolve family issues. 

"A tremendous amount of pressure was placed on me, personally and professionally, the last few weeks being out with family issues and coming back in the last couple of weeks," Cardwell said in September, according to another Powell Tribune article. "As you can imagine, it can be overwhelming. Circumstances occurred that led me to believe that I was no longer needed or wanted here."

Days after his resignation, Cardwell asked to be reinstated but was turned down.

HealthTech's attorney, Eli Richardson, explained that HealthTech alone filed the complaint with no participation by Powell Valley Healthcare.

Cardwell is thought to be living in Thailand, the article noted. Richardson did not say how Cardwell would be served with the lawsuit.

Bill Patten is now Powell Valley Healthcare's CEO.

For more information:
- read the Powell Tribune article on the lawsuit and the article on the resignation

Related Articles:

Novant Health exec pleads guilty to embezzlement
Hospital exec embezzled $3.2M, insurer alleges
Former hospital accountant sentenced for embezzling $1.1M
Hospital financial officer arrested for embezzlement