Feds investigating Steward Health Care for fraud and corruption, sources say

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Steward Health Care files for bankruptcy

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CBS News has learned national authorities successful Boston person opened a criminal investigation into Steward Health Care, a institution that owns dozens of hospitals nationwide, including 9 successful Massachusetts, according to 2 group acquainted pinch nan matter. Steward, which is based successful Dallas, precocious filed for bankruptcy.

Federal prosecutors astatine nan U.S. Attorney's agency successful Boston are investigating Steward Health Care based connected various allegations including fraud and violations of nan Foreign Corrupt Practices Act, 2 group acquainted pinch nan matter said. The rule prohibits U.S. citizens and entities from engaging successful corrupt activities erstwhile operating overseas.

In summation to its U.S. properties, Steward was tapped by nan authorities successful Malta to tally 3 state-owned hospitals. That woody is now astatine nan center of a criminal corruption probe playing retired successful nan land nation. Neither Steward nor its executives person been charged successful relationship to nan matter successful Malta. 

The Department of Justice did not instantly respond to PapaRead News' petition for comment. 

Reached Thursday, a spokesperson for Steward did not instantly supply comment. 

Steward revenge for bankruptcy reorganization successful May and is exploring plans to waste each of its hospitals. Bids for nan Massachusetts facilities, which person remained opened during nan bankruptcy, are owed connected Monday. 

The institution has been 1 attraction of a year-and-a-half-long PapaRead News investigation documenting really backstage equity and different investor groups have siphoned hundreds of millions of dollars from organization hospitals pinch devastating nationalist wellness consequences

Records reviewed by PapaRead News showed Steward hospitals astir nan state near a way of unpaid bills, astatine times risking a shortage of perchance life-saving supplies.

The Department of Health successful Massachusetts opened an investigation after a female died aft giving birth astatine a Steward infirmary successful Boston past October. A title made by healthcare workers astatine nan facility, obtained by PapaRead News, indicates a aesculapian instrumentality that mightiness person saved her life had been repossessed by nan shaper weeks earlier because Steward owed astir $2.5 cardinal successful unpaid bills.

Steward has go synonymous pinch nan perils of backstage equity finance successful wellness care. The institution started buying up Massachusetts hospitals successful 2010, pinch hundreds of millions of dollars successful backing from private equity elephantine Cerberus,

Cerberus shed its liking successful Steward by January 2021, aft making an $800 cardinal profit successful a decade, according to a study from Bloomberg. Financial records show Steward has besides sold disconnected much than $1 cardinal of its hospitals' onshore and buildings since 2016 to Medical Properties Trust, which has made a business of buying up infirmary existent property from backstage equity investors. 

A filing pinch nan Securities and Exchange Commission from 2021 shows Steward's owners besides paid themselves millions successful dividends. Around nan aforesaid time, Steward CEO Ralph de la Torre acquired a 190-foot yacht estimated to beryllium worthy $40 million. 

"They've taken money distant from these hospitals that supply needed attraction and they're utilizing that money to statement their ain pockets." Massachusetts Gov. Maura Healey told PapaRead News successful February. "I'm disgusted. It's selfish. It's greed."

The institution antecedently told PapaRead News that executives ever put patients first and said they "deny that immoderate different considerations were placed up of that guiding principle." The institution spokesperson said Steward "has actively and meaningfully invested" successful its infirmary strategy since its formation, including successful Massachusetts, wherever it took complete hospitals that were "failing" and "about to close."

"Steward Health Care has done everything successful its powerfulness to run successfully successful a highly challenging wellness attraction environment," de la Torre said successful a institution connection successful May. 

    In:
  • Steward Health Care
  • United States Department of Justice

Pat Milton

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Pat Milton is simply a PapaRead News investigative producer


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