Former Hospital Executives Plead Guilty to Income Tax Evasion
PHILADELPHIA (AP) _ Two former executives of a for-profit hospital have pleaded guilty to taking part in an income tax evasion scheme in which secret raises and bonuses were disguised as business expenses.
G. Francis Craven, 54, and Joel Davids, 44, of the James C. Giuffre Medical Center falsified records to make more than $40,000 in salary increases look like auto or travel expenses, prosecutors charged.
No sentencing date was set because the two are cooperating with officials as part of their plea agreement. A third former executive, Frank Haney, 47, also was charged in the scheme.
Craven was administrator of the financially beleaguered hospital, Davids was associate administrator and Haney head controller.
Craven and Davids pleaded guilty to conspiracy to defraud the government and to filing false tax returns for the year 1984. Prosecutors said Craven didn’t report nearly $18,500, Davids $19,800 and Haney $4,000.
The 228-bed hospital, which provides millions of dollars in charity care each year to indigent, uninsured patients, has been under state and federal investigation in recent months because of its financial and medical practices.
A state investigation announced in May uncovered 124 deficiencies including 12 questionable patient deaths and 29 cases of unnecessary surgery.
In May, the state closed the emergency room for 15 days, banned admissions for eight days and ordered the naming of a new board of directors.
Dr. James C. Giuffre, the hospital’s 75-year-old medical director and namesake, resigned in January after anonymous letters alleging malpractice and mismanagement were sent to state authorities and reporters. The letter-writers claimed to be staff members at the hospital.