Singing River Health

Federal judge has forwarded 'serious allegations' about SRHS to prosecutors

 Maury Thompson awaits the ruling of Judge Neil Harris in SRHS case, Tuesday, Dec. 23, 2014, in Pascagoula.
TIM ISBELL/SUN HERALD Maury Thompson awaits the ruling of Judge Neil Harris in SRHS case, Tuesday, Dec. 23, 2014, in Pascagoula. SUN HERALD

GULFPORT -- Judge Louis Guirola Jr. confirmed Thursday he turned over allegations of criminal wrongdoing against Singing River Health System to the United States Attorney's Office.

Guirola recently presided over a civil trial to determine if he should approve a settlement between SRHS and all members of its failed pension plan. The trial was not a criminal case, but attorneys for some pension-plan members who opposed the settlement accused Singing River of breaking the law.

The county-owned health system had mailed brochures to plan members each year from 2009 to 2011 that indicated it was contributing to its employee pension plain. In reality, it was not making its employer contributions, although mandatory 3 percent contributions continued from employees.

"This is mail fraud," pension-plan member Maury Thompson testified during the settlement hearing in Guirola's courtroom. "Blatant mail fraud."

'Serious allegations'

Guirola made it clear to SRHS plan members in the crowded courtroom the trial was not about assigning blame or ferreting out criminal wrongdoing. Instead, his job was to determine whether SRHS and attorneys for pension-plan members had reached a fair settlement that should be applied to all members. In the end, he approved the settlement as fair and reasonable.

Guirola said Thursday he also forwarded a transcript of Thompson's testimony, plus documents introduced as exhibits during the trial, to the U.S. Attorney's Office.

"I felt, under the circumstances, those were pretty serious allegations," he said.

Attorneys for a group of pension-plan members who opposed the settlement, Harvey Barton and Earl Denham of Jackson County, have been trying since 2014 to get to the bottom of the pension-plan failure.

Barton put together a booklet on mail fraud -- "Mail Fraud for Dummies," he and Denham call it -- which they have widely shared. "I've handed them out like cotton candy," Barton said.

They also visited investigative agencies. "We sent people to the U.S. Attorney's Office," Barton said. "Do you know what they said? They said, 'We don't investigate crimes. You need to go see the FBI.'"

The attorneys or their clients also talked to the Jackson County District Attorney's Office, the state Attorney General's Office and the FBI.

Past investigation

At one time, District Attorney Tony Lawrence and the FBI were investigating the SRHS pension failure. They presented evidence one year ago to a grand jury, including testimony from CEO Kevin Holland and several former executives. No indictments resulted.

SRHS has denied any criminal wrongdoing.

As part of the settlement, the health system agreed to put $150 million into the pension over 35 years for its failure to fund the plan from 2009 to 2014. The pension was frozen in late 2014, but has continued to send out monthly retirement checks. However, its only income since the freeze has been from investments.

It is unclear how much in monthly benefits retirees will receive after the settlement is finalized and SRHS payments begin. Plan Trustee Steve Simpson will engage experts to calculate monthly payments going forward based on funding available.

"My goal is to give all the beneficiaries of this plan, including retirees and current employees, the biggest bang for the buck," Simpson said.

Barton, when he heard Guirola had sent testimony and exhibits to the U.S. Attorney's Office, said, "I'm tickled pink to hear Judge Guirola's doing something about it. Thank goodness for that."