Federal Freeze on Bank Account Could Shut Down Va. Rescue Squad
Feb. 10--ABINGDON, Va. -- A federal freeze of the Saltville Rescue Squad's bank account could conceivably shut down the emergency service, according to arguments Thursday in U.S. District Court.
Federal prosecutors have filed criminal charges against the squad as a corporation to force the forfeiture of $880,000 thought to have been made from alleged health care fraud.
It's a move that could leave the squad without money to operate.
"We're working ... to make sure that doesn't happen," Assistant U.S. District Attorney Janine M. Myatt told a judge in federal court Thursday.
During an arraignment moments earlier, squad business manager and President Eddie Wayne Louthian Sr., of Chilhowie, and member Monica Jane Hicks, of Meadowview, pleaded not guilty to charges of defrauding insurance companies.
It was their first court appearance since an indictment made on Jan. 18 was unsealed last week.
Louthian faces a maximum penalty of 60 years in federal prison and Hicks could serve 25 years if found guilty of allegations that they sent $2.65 million worth of fraudulent billing slips to insurance companies from December 2010 until September 2011.
Louthian and Hicks remain free on $10,000 unsecured bonds.
After the not-guilty pleas, debate quickly turned to a defense motion to unfreeze the bank assets so the squad could hire a lawyer. Squad defense attorney R. Wayne Austin asked that $50,000 be released.
In all, $300,000 has been seized from the bank account, Austin said, with some of those funds resulting from donations instead of payment for medical services.
Although the rescue squad is volunteer based, it began billing insurance companies in 1999 to cover the cost of maintenance and doing business.
For prosecutors, there's a catch to the freeze. A corporation cannot stand trial without an attorney. And, unlike with an indigent person, the courts can't appoint an attorney for a corporation.
So, either some of the squad's assets must be released to hire a legal representative, presiding Judge Pamela Meade Sargent said, or the case against the rescue squad as a corporation must be dropped.
"If the prosecution wants to continue again the corporation ... then we're going to have to come to some reconciliation," she said.
The argument was delayed to give attorneys time to consider their strategy. A motion hearing will be heard March 8.
During the arraignment, Sargent noted that Louthian's criminal charges might keep him from collecting a squad paycheck.
The charges prevent both squad members from involvement with the squad's business matters while the case continues. Trial is set for May 14 -- 18.
Hicks, who limped into court with a cane in her hand, is applying for disability benefits, according to attorney statements. But Louthian's tenure as the squad's business manager, earning him $52,000 in 2010, is dubious, Sargent noted, and he might have to look elsewhere for a paycheck.
"It may be, Mr. Louthian, that you may have to look for employment," Sargent said. "It may be that the rescue squad will continue to pay you."
The defendants are accused of chauffeuring by ambulance able-bodied patients to dialysis treatment and then billing insurance companies for carting them on a stretcher. Insurance companies will not pay for an ambulance transport if the patient can walk, drive, or find another ride.
The squad is charged with one count of conspiracy to commit health care fraud, one count of health care fraud, five counts of making false statements in relation to a health care matter and two counts of money laundering.
Louthian is charged with one count of conspiracy to commit health care fraud, one count of health care fraud, four counts of making false statements in relation to a health care matter, two counts of money laundering and one count of making a false statement to a federal grand jury.
Hicks is charged with one count of conspiracy to commit health care fraud, one count of health care fraud and one count of making false statements in relation to a health care matter.
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