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Former hospital operators sentenced to five years in federal prison

Published 4:23pm Monday, June 18, 2012

James R. Cheek and Herschel A. Breig, former operators of Chilton Medical Center, have been sentenced to five years in federal prison on tax charges related to their work at a Texas hospital.

In addition to the prison time, U.S. District Judge Sam R. Cummings also ordered Cheek and Breig to pay more than $5 million in restitution. The majority of that money will go to the Internal Revenue Service.

The two pleaded guilty in February to one count of failing to submit payroll taxes during their time at Highland Medical Center in Lubbock, Texas in 2006-08. The two ran Highland from March 2006 through May 2008.

The U.S. Marshal’s Service immediately took Cheek and Breig into custody following sentencing.

Cheek and Breig were president and executive vice president of Missouri-based Carraway Medical Systems, LLC.

A subsidiary of Carraway leased CMC from Sunlink Health Systems out of Atlanta last March. The agreement gave Carraway the option to buy CMC during the six-year term of the lease.

Several weeks ago Ted Cheek, James Cheek’s brother, was named president of Carraway.

Chilton Medical Center CEO Ted Chapin, who came to Clanton in September, said the hospital would continue to provide quality healthcare to residents.

“This is not going to affect our day-to-day operations,” Chapin said. “We are not going to be distracted by this. We have an obligation to provide healthcare services … and that’s what we are going to do.”

Chapin said the hospital plans to open Golden Care, a Geri-Psych unit, later this month and is working to recruit a general surgeon to town too.

“I was hired to come in and turn this place around, and that’s what I aim to do,” Chapin said.

Ron Turner, chief operations officer at Sunlink, said Carraway would continue to operate the hospital under the terms of the lease.

“We are expecting them to perform under the lease agreement unless notified otherwise,” Turner said.

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