Miller Gets 10 Years in SRMC Case; Carty Says He’ll Appeal

Defense attorney Gordon Rhea, left, and defendant Amos Carty outside the courthouse on St. Thomas Friday. (Source photo by Judi Shimel)
Defense attorney Gordon Rhea, left, and defendant Amos Carty outside the courthouse on St. Thomas Friday. (Source photo by Judi Shimel)

The lawyer representing one of two former chief executive officers for Schneider Regional Medical Center said Friday there will be an appeal of the conviction and sentence issued by Superior Court Judge Michael Dunston.

Former Chief Executive Officer Amos Carty Jr., vowed to challenge the Nov. 14 jury verdict.

Carty, along with former Chief Executive Officer Rodney Miller and former Chief Financial Officer Peter Najawicz appeared at a sentencing hearing Friday. Miller got 10 years in prison. Carty and Najawicz each received one-year sentences.

All three were convicted on charges contained in an amended indictment charging them with embezzlement, conspiracy, obtaining money under false pretenses and violations of the local racketeering statute.

Miller, who took $2.8 million in the med center embezzlement scheme, was turned over to Bureau of Corrections officers and remanded to St. Croix’s Golden Grove Adult Correctional Facility. Carty and Najawicz were given 15 days to put up $25,000 appeal bonds that would allow them to remain free, pending the outcome of further court proceedings.

Prosecutors with the V.I. Department of Justice said Carty was enriched by $545,575.87. Najawicz gained $490,4ll.92.

As he pronounced sentencing, the judge said he thought long and hard about the role he had to play. At the start of Friday’s five-hour hearing, Dunston began by ruling on a series of defense motions asking that the court vacate the jury verdict.

The judge considered them all. In the end he declared a reasonable jury would have found Miller, Carty and Najawicz guilty as charged.

“It gives me no pleasure to impose a sentence in this case but I am required to, to uphold the verdict of the jury,” Dunston said. The judge added that some may find his sentencing too lenient.

For most of the time that the scheme to defraud the med center played out, Carty served as chief legal counsel and chief operating officer. He took over as chief executive officer after Miller left in late 2007. When the results of an audit conducted by the V.I. Office of the Inspector General and the U.S. Department of the Interior Inspector General became public in 2008, then-Gov. John deJongh dismissed the hospital board; a replacement board fired Carty.

Najawicz was dismissed by the previous board. The inspector general found that Miller had crafted an overly generous severance package for the former finance chief three years in advance of Najawicz’s firing.

Najawicz worked at the medical center from 2004 to 2007. One of the first things he was directed to do by Miller was write off a $10,000 salary advance given to Carty when he began his duties as chief legal counsel.

At the time the action was taken, the loan was only two years old, Dunston said. Carty was still on the job, being paid a substantial salary, but there was no indication that any further attempts to collect the debt were made by the med center. Neither, he said, was there any sign that Carty tried to repay.

In the colloquy leading to the imposition of penalties, the judge acknowledge arguments by defense attorney Robert King, saying Najawicz was ordered to pay bonuses, stipends, an advance on a housing allowance and lavish sums related to non-existent contracts. King said his client did so even though he was prevented from viewing the contracts by Miller.

Nonetheless, Dunston said, Najawicz was not only a certifying officer of the V.I. government, he was a certified public accountant. The defendant knew the procedures for processing payments but chose to do otherwise, the judge said.

“I cannot overlook the fact that each and every one of those payments made from the Scotia Bank account were made by Mr. Najawicz. And as a certifying officer of the government and a certified public accountant, he knew the proper method of making those payments,” the judge said.

And Carty fashioned every document facilitating the illegal payments in the scheme, Dunston said. Payments that included $1.5 million to a specialized retirement account for Miller called a Rabbi Trust. In testimony heard during the trial, witnesses said the arrangements to set up a Rabbi Trust were not approved by the board and were not established by the time Miller left Schneider Regional in 2007.

Payments that included a $45,500 advance on a housing allowance during a year when Miller already collected housing allowance payments approved by the hospital board.

In the end, pronouncement of sentence reflected the serious nature of some acts and less so on others.

For Miller, convicted of 19 counts in a 44 count superseding indictment the judge gave concurrent five-year sentences for conspiracy to embezzle; embezzlement by a public officer related to writing off Carty’s salary advance; obtaining money by false pretenses by granting auto allowances to Najawicz; obtaining money by false pretenses by misuse of a housing allowance; for granting himself a $45,500 housing allowance advance;

obtaining money by false pretenses by granting education allowances not approved by the hospital board; and for structuring Najawicz’s severance package.

Miller was given 10-year sentences for falsifying public accounts by directing the payment of $1.5 million for the Rabbi Trust and by attaching schedules to an unapproved contract, allowing him to authorize illegal payments.

A five-year sentence was also given for substantive violation of the Criminally Influenced and Corrupt Organizations Act, the local racketeering statute.

The judge issued a $350,000 appeal bond for Miller and directed that he be sent to prison to start serving the sentence immediately.

Carty was sentenced to one-year prison concurrent terms on several counts related to convictions on 11 criminal counts: For conspiracy to commit embezzlement; falsification of public accounts; embezzlement by a public officer; falsification of public accounts for arranging the write off of his $10,000 salary advances; falsification of public accounts for arranging the $1.5 million payment to Miller under a non-existent Rabbi Trust agreement; obtaining money by false pretenses by helping Miller avoid repayment of a $2,000 housing security deposit on a temporary apartment at the start of his term as chief executive; obtaining money by false pretenses by structuring schedules to an unapproved contract for Miller.

There also was a one-year sentence for substantive violation of CICO.

Dunston made a point of mentioning that conviction on some counts in Carty’s case meant he could not run for public office. For many years, Carty was viewed as an attractive candidate in a future race for governor, having served as legal counsel to both the Legislature and the Office of the Governor.

Outside of the courthouse, defense attorney Gordon Rhea promised to appeal the case without delay.

“We do intend to file an appeal and I am confident the ultimate outcome will be where the truth lies. My client, Amos Carty, is innocent of the charges that were brought against him,” Rhea said.

For Najawicz, convicted on 18 of 44 counts, there were concurrent one-year sentences for conspiracy to commit embezzlement; embezzlement by a fiduciary for approving a $400,000 payment to Miller; obtaining money by false pretenses for approving a $400 monthly auto allowance for himself that was not part of his hiring agreement; certification of illegal payments in excess of $2 million; certification of illegal payments for Miller’s $45,500 housing allowance advance; certification of illegal payments for Miller’s monthly housing allowance in excess of the figure approved by the hospital board; embezzlement by a fiduciary by approving $1.5 million to Miller under an unauthorized Rabbi Trust agreement.

Najawicz was also given 30 days in prison for certification of illegal payments to himself in the form of bonuses and stipends directed by Miller. The judge also directed the defendant to pay a $2,000 fine.

A $50,000 fine was ordered for substantive violation of CICO by the former chief financial officer.

With that, one outstanding matter remains – how much restitution each defendant must pay back to the government. The judge said he would publish his opinion on that matter shortly, with an eye towards retirement by the end of the year.