Ex-hospital boss guilty of fraudFinancial officer took payoffs in debt scam
Friday, October 28, 2005
by Michael Higgins and Mickey Ciokajlo
The former chief financial officer of Cook County-run Provident Hospital admitted Thursday that he took $12,500 in payoffs to help a failing business owner defraud finance companies out of more than $300,000.
Earl Bell, 49, of Chicago used his position at the hospital to convince finance companies that the county owed hundreds of thousands of dollars to businesses run by his friend, Mary Payne, according to Bell's plea agreement.
In fact, Payne's companies, which provided temporary staffers to health care agencies, were not owed the money and the debts were "fictitious," the plea agreement said.
By vouching for the debts, Bell allowed Payne to sell the right to collect on those accounts receivable to finance companies in California and Indiana. In return, Payne paid Bell $2,500 in August 1998 and another $10,000 in the fall of 2000, according to Bell's plea agreement.
Anita Rivkin-Carothers, Bell's attorney, said Thursday that her client feels remorse for his conduct.
"[Payne and Bell] were friends, and he was just attempting to help her with her business," Rivkin-Carothers said. "He never had any idea that it would get his far."
Bell pleaded guilty to fraud, but did not agree to cooperate or provide testimony, Rivkin-Carothers said Thursday. Payne, 41, of Hazel Crest and her former husband, Anthony Payne, 42, of Chicago Heights also pleaded guilty to fraud on Thursday.
Under the plea agreements, prosecutors will recommend a sentence of about 22 months for Mary Payne and 18 months for Anthony Payne. Federal guidelines suggest a sentence of 18 to 24 months for Bell, prosecutors said, but under the plea agreement, prosecutors will recommend any sentence they deem appropriate.
The plea agreements also call for restitution to finance companies and banks of about $2.36 million from Mary Payne, $1.75 million from Anthony Payne and $341,783 from Bell.
U.S. District Judge Suzanne Conlon is to sentence all three on Jan. 24.
Mary Payne controlled staffing companies that included Swerbeh Ltd. and JTD Inc., but in the late 1990s her companies were struggling, according to the plea agreements. She sent false invoices to AeroFund Financial, a finance company in California in 1998 and 1999, and Bell confirmed 15 false debts in writing, the documents state.
In 2000, Bell confirmed other false debts--one for $173,245 and one for $143,143--to help Payne sell those debts to Capital City Financial in Indiana, according to the plea agreements.
The Capital City scam unraveled later when state officials told the company that the debts could not be sold in that manner, the plea agreement said.
Bell also confirmed a fictitious debt of $343,696 for another Payne company, according to Bell's plea agreement.
In a separate scam, Mary and Anthony Payne used false invoices to persuade Continental Community Bank in Maywood to help finance one of Mary Payne's companies, according to the Paynes' plea agreements. Bell was not involved.
After the indictment was announced in August, County Board President John Stroger said Bell was an active member of his 8th Ward political organization and that he had known Bell for years. Since then Bell's name has been removed from the organization's letterhead.
Stroger said he sought an investigation when allegations against Bell came to his attention, and Bell immediately resigned.
"I feel sad about it since I've known him since he was a young man in college," Stroger said at the time.