Ex-Sacred Heart CEO Questions Prosecutors' Evidence in Kickback Case

The indicted former owner and CEO of Chicago-based Sacred Heart Hospital is arguing evidence gathered in an April 2013 search of the facility should be suppressed due to the alleged questionable credibility of federal prosecutors' key cooperating witness whose testimony helped prosecutors obtain the search warrant.

In April 2013, Sacred Heart's former CEO, Edward Novak, was arrested along with the hospital's CFO and four physicians based on their alleged involvement in a kickback scheme. That summer, the hospital closed and filed for bankruptcy after Medicare payments were suspended in light of the criminal charges filed against the defendants.

Earlier this month, Mr. Novak and his attorneys filed a motion requesting a hearing to determine if evidence seized in the raid of the hospital via a Federal Bureau of Investigation search warrant should be allowed at trial, according to a Crain's Chicago Business report.

According to Mr. Novak's counsel, the FBI should have disclosed information about Anthony Puorro, Sacred Heart's former COO who was also the government's principal informant and cooperating witness in its 90-page affidavit in support of its search warrant. Lawyers for Mr. Novak claim the information would have cast doubt on what Mr. Puorro told investigators about the alleged Medicare kickback scheme, according to the report.

Among the omitted information noted in the motion is that a week before agents arrested Mr. Novak, Mr. Puorro recanted part of his account concerning the kickback scheme to FBI agents and prosecutors, only to recant his recantation a few days later.

The FBI's affidavit acknowledges that Mr. Puorro "made certain statements which he has subsequently acknowledged were not accurate" but offers little more.

Mr. Novak's attorneys also argue that the affidavit should have indicated Mr. Puorro was implicated — though never charged — in an earlier, unrelated healthcare fraud case in Pennsylvania. They say if these details had been provided in the affidavit, it would have affected how the magistrate judge, Daniel Martin, viewed Mr. Puorro's credibility and perhaps whether the search warrant of Sacred Heart was allowed, according to the report.

More Articles on Anti-Kickback Statute:

8 Key Trends in Healthcare False Claims and Antitrust Litigation
$97M Medicare Fraud Scheme Leads to 7 Convictions 
Memorial Hospital in Ohio Pays $8.5M to Settle Kickback Allegations 

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