Former Fletcher Allen executive pleads guilty

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(Host) A former top official at Fletcher Allen Health Care has pleaded guilty to misleading state regulators over the true cost of a huge hospital expansion project. Attorney General William Sorrell says the guilty plea will help prosecutors in their continuing criminal investigation.

VPR’s John Dillon has more. Thad Krupka

(Dillon) Thad Krupka worked as chief operating officer at Fletcher Allen at the time that the Burlington hospital was seeking state approval for a $173 million expansion. The Renaissance Project ended up costing about $330 million, even though regulators had allowed the hospital to spend far less.

Krupka admitted in Vermont District Court on Wednesday that he was involved in preparing false claims about the project to the state. Attorney General William Sorrell says Krupka’s cooperation will be key as state and federal prosecutors build a case against others involved in the alleged criminal wrongdoing.

(Sorrell) “There are a number of individuals who might be criminally and/or civilly liable for their participation in the Renaissance Project misrepresentations, false representations to the state Department of Banking, Securities and Health Care Administration. It’s envisioned that Mr. Krupka will continue to cooperate as requested in ongoing investigation in any state and or federal court proceeding.”

(Dillon) Sorrell would not say who might be the subject of additional prosecution. Krupka is the first person charged in the Fletcher Allen case, although the institution last year agreed to pay $1.3 million in fines.

In documents filed with the court in the Krupka case, a FBI agent paints a detailed picture of the plan to conceal the true cost of the Fletcher Allen project. The documents quote an e-mail that Krupka sent in September 2000 to a subordinate who was worried about the costs. Krupka wrote that he would make sure that everyone, including former hospital CEO Bill Boettcher, knew where officials have “hidden” certain capital issues.

Sorrell said health care consumers would ultimately pay the huge overruns at Fletcher Allen.

(Sorrell) “If Fletcher Allen officials had been honest with the state about the true cost of the Renaissance Project and that it wasn’t $173 million as they continually represented to the state but was something over $330 million, would the project have been approved? And so taxpayers, and private insurers and individuals who are uninsured who pay their own hospital charges are going to be paying for the Renaissance Project for a really, really long time.”

(Dillon) Krupka could face a maximum sentence of six years in prison but sentencing won’t take place for at least a year. His cooperation with investigators could mean that he avoids any jail time. In a separate deal with federal prosecutors, Krupka has agreed to forfeit $170,000 from his Fletcher Allen salary.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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