NYC Health Execs Named in Federal Bribery Case

John Commins, for HealthLeaders Media , March 14, 2011

The indictment alleges that from at least 2006 through March 2011, Kruger received a stream of bribes totaling at least $1 million from several sources, including Rosen, Aquino, and Kalish.

Kruger allegedly funneled the bribes to the bank accounts of two shell companies -- Olympian Strategic Development Corp., and Bassett Brokerage – that were created by Turano. Turano allegedly used the money to pay the lease on a Bentley, pay his credit card bills, and pay off the mortgage on the multi-million dollar home, prosecutors said.

Kalish, the owner of consulting firm Adex Management Inc., allegedly funneled $197,000 to Olympian, which prosecutors claim was used to buy favors from Kruger. In the summer of 2008, for example, Aquino, then the CEO at Parkway Hospital, paid Adex $60,000 –- half of which Kalish put in the Olympian account -– so that Kruger would lobby the state to help Parkway acquire the Caritas Hospitals.

At the same time, Rosen also allegedly attempted to bribe Kruger to help MediSys acquire the Caritas Hospitals. They were ultimately acquired by Cerberus Capital Management. Rosen allegedly had the health system's Brookdale Hospital hire a third-party hospice care provider, knowing that Kruger had a stake in it.

In addition, prosecutors allege that between 1999 and 2008, Rosen used MediSys or affiliates to funnel $390,000 to Seminerio through a sham consulting company. In exchange, Seminerio lobbied the state for the discharge of a $19 million loan in 2006, co-sponsored a bill to provide a secured financing option to MediSys in 2006, and pressed state agencies on behalf of Medisys in connection with the Caritas Hospitals acquisition. Seminerio has already pled guilty to fraud and was sentenced to six years in prison.

Rosen also allegedly hired Boyland for what prosecutors said was a "no-show consulting job" that paid the lawmaker $35,000 a year between 2003 and 2008. In exchange for the approximately $177,000, Boyland allegedly pushed for the State Assembly to award millions of dollars to Brookdale Hospital.

John Commins is a senior editor with HealthLeaders Media.

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