Ohio Used Medical Equipment Business Owner Pleads Guilty to Scheme to Defraud Hospitals

Robert E. Alick, the operator of a used medical equipment sales business and resident of Chagrin Falls, Ohio, pleaded guilty today to five counts of mail fraud, one count of wire fraud and one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws in a scheme to defraud six hospitals, according to a release from the Department of Justice and the IRS.

According to the indictment and the plea agreement, Mr. Alick operated his used medical equipment sales business in Beachwood, Ohio, through the following entities: Healthcare Imaging Solutions Corp., ECT Medical Systems Inc., ECT Corp., Second Source Medical Equipment Corp. and Computer Remarketing Credit Corp. d/b/a DECT Imaging. Mr. Alick also admitted that in connection to the mail and wire fraud counts, from July 2002-April 2006, he engaged in a scheme to defraud hospitals that were his customers through various means, including by taking substantial deposits that were supposed to be used to purchase medical equipment and failing to use such funds for the purchase of the equipment and failing to deliver the equipment, instead using the money on other things, according to the release.

The six hospitals Mr. Alick admitted to defrauding were Toledo (Ohio) Hospital, Greene County Medical Center (Jefferson, Iowa), Canyon Surgery Center (Phoenix), North Suburban Surgery Center (Thorton, Colo.), Clarion (Pa.) Hospital and Hugh Chatham Hospital (Elkin, N.C.).

Mr. Alick also pleaded guilty to tax crimes, which included obstruction and impeding the IRS and failure to pay employment tax, according to the release.

Mr. Alick will be sentenced on June 3, 2010, and faces a maximum potential sentence of 20 years in prison followed by up to three years of supervised release and a fine of $250,000 for each of the mail and wire fraud counts. He also faces maximum potential sentence of three years in prison followed by one year of supervised release and a fine of $250,000 for the tax crime, according to the release.

Read the DOJ's release on Robert Alick.