Two former Highland Hospital executives are indicted in Lubbock federal court. Herschel Breig, and James Cheek were accused Wednesday of collecting federal payroll deductions but never turning over the money to the IRS. The indictment says that between the fourth quarter of 2006, and the second quarter of 2008, the two failed to turn over $1,856,529.
Breig was the Vice President and Cheek was the CEO of Highland Hospital's parent company, Shiloh Health Services, before Highland was sold to Grace Clinic. Both moved out of Lubbock to run healthcare operations in other states.
One count in the indictment accuses the men of embezzlement; but it is not clear if they are accused of taking money for themselves or taking money on behalf of Shiloh. The victim is listed as Shiloh's health care benefit program, and the money is said to have been "misapplied".
Grace Medical Center issued a statement Thursday morning.
Lubbock, TX – 8/11/11 — Grace Medical Center wishes to announce that it and all subsidiary entities of Grace Holdings, LLC are not now or have ever been associated or affiliated with Highland Community Hospital. The acute care hospital facilities located at 2412 50th St, Lubbock, TX were acquired and are now wholly owned and operated by Grace Holdings, LLC. No residual relationship of any kind exists between Grace Holdings, LLC and any former owners or management of the medical facilities at that location.
Grace Holdings, LLC is the holding company for Grace Health System with subsidiaries doing business as Grace Medical Center, Grace Clinic and Grace Pharmacy. Grace Health System is a 123-bed acute care hospital located at 2412 50th St., Lubbock, TX. Grace Clinic is a primary care and multi-specialty medical clinic with nine primary care physicians and fourteen specialist physicians on staff and is located at 4515 Marsha Sharp Freeway, Lubbock, TX. Grace Pharmacy is a full service pharmacy located on the premises of Grace Clinic and has one full time pharmacist on staff. All business units mentioned above are wholly owned by Grace Holdings, LLC of Lubbock, TX.
Copyright 2011. KCBD NewsChannel 11.