The owners of Paragon Family Practice have been criminally charged with theft in Frankfort 1 ½ years after they were sued by employees for allegedly withholding funds.
LEX 18 Investigates first told you about Ann Giles and Lu Anne Wallace in August 2013. At the time, the owners of Central Kentucky’s largest network of private Medicaid clinics were accused by employees of failing to pay health insurance and 401k premiums, despite continuing to withdraw that money from employee paychecks.
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Many employees also said they hadn’t gotten a paycheck in weeks or months.
However, it wasn’t withholding money from employees that got Giles and Wallace in trouble; it was withholding money from the state and allegedly keeping it for themselves, according to court records.
On March 2, Giles and Wallace were charged by a Franklin County grand jury with 25 counts each of theft by failure to make required disposition of property. The property, according to the indictments, is taxes collected by Resources in Health Care Management LLC, the staffing and billing arm of Paragon and other affiliated medical clinics.
The documents say they “intentionally dealt with the property as their own and failed to make the required payment.”
LEX 18 Investigative Reporter Richard Essex went to the homes of Giles and Wallace, but neither came to the door. Court documents did not indicate whether the women had retained attorneys.
The indictment offered few other details. The case was presented to the grand jury by an investigator with the Kentucky Department of Revenue, and a criminal summons was sent out the same day of the indictment.
The women were scheduled to be arraigned in Franklin County Circuit Court on April 10.
The indictment was the latest in a series of ongoing legal trouble for Resources in Healthcare Management, its owners and related clinics.
In August 2013, a class-action lawsuit was filed in federal court on behalf of employees who claimed their health insurance and retirement benefits had been cut off even though the employees continued paying for them.
In October of that year, more employees filed another class-action lawsuit claiming they had not received “wages/benefits” for weeks or months.
The company also had filed for Chapter 11 bankruptcy protection.
The company said at the time that changes in the ways the federal government provided Medicaid reimbursements had caused a massive funding shortfall, resulting in the problems.
Most of the Paragon Family Clinic offices are now closed, but several clinics remain open.
