A Springfield company will pay more than $1 million in forfeiture to the federal government under the terms of a non-prosecution agreement announced today, which acknowledges the criminal conduct of two former executives who are involved in a related criminal investigation.
The company in question is Pro1 IAQ, Inc., a Missouri corporation with operations in Springfield and Bouler, Colorado, which designs and sells indoor thermostats nationwide.
“Company owners and executives abused their leadership positions in an unrelated charity to illegally enrich themselves and their for-profit company,” said Teresa Moore, U.S. attorney. “More than $1 million from the health care charity, primarily funded by Medicaid reimbursements, was siphoned to Pro1 through a series of illicit payments over several years. Pro1 has accepted responsibility for the criminal conduct of its former executives and cooperated with the federal investigation. Those embezzled funds will be recouped by the government under the terms of this non-prosecution agreement.”
By signing the non-prosecution agreement, representatives of Pro1 admitted that former executive officers engaged in a conspiracy to embezzle funds from Preferred Family Healthcare, Inc., a Springfield-based nonprofit corporation, from 2008 to November 2017. Pro1 benefited from acts of alleged criminal misconduct by the executives, who were also executives of the charity and channeled funds from Preferred Family Healthcare to financially enrich the firm.
“The diversion and theft of over $1 million of federal sourced funds, designated for employment training, behavioral health care and other public services by former executives of Preferred Family Healthcare and Pro1, was a gross abuse of the positions of trust they once held,” said Steven Grell, special agent-in-charge, Dallas Region, U.S. Department of Labor, Office of Inspector General. “They chose their own personal gain and benefit over the greater good of the public and the nonprofit organization whom they served. This agreement demonstrates Pro1’s willingness to take corrective actions regarding the fraudulent actions of its former executives.”
Details of the agreement
Under the terms of the non-prosecution agreement, Pro1 must forfeit $1,057,617 to the federal government, which is the amount Pro1 gained from the conspiracy.
Among the specific actions acknowledged in the non-prosecution agreement, executives and employees of Preferred Family Healthcare were utilized to complete tasks related to Pro1 operations, sometimes working full time for Pro1 while being paid by the charity. Additionally, the charity paid Pro1 for the lease of a warehouse for approximately three years and provided office space in the charity’s main office building at no cost to Pro1 for more than a year.
While Pro1 did not provide appropriate oversight regarding the actions of its agents, which could be considered willful blindness, many of the actions taken by Pro1’s executives were done without specific knowledge of the president and the corporate board of directors. Pro1, as a part of this investigation, has discontinued the leadership roles of those executives and has cooperated fully with the federal criminal investigation.
Preferred Family Healthcare agreed earlier this year to pay more than $8 million in forfeiture and restitution to the federal government and the state of Arkansas under the terms of a non-prosecution agreement, which likewise acknowledges the criminal conduct of its former officers and employees.
Several former executives of Preferred Family Healthcare, former members of the Arkansas state legislature and others have been convicted in federal court as part of the multi-jurisdiction, federal investigation. As part of the federal investigation, the former chief operating officer and chief financial officer of Preferred Family Healthcare were indicted by a federal grand jury on March 29, 2019. They pleaded not guilty and are awaiting trial, which is scheduled to begin on Oct. 3, 2022.
Several former executives of Preferred Family Healthcare, former members of the Arkansas state legislature, and others have been convicted in federal court as part of the multi-jurisdiction, federal investigation. As part of the federal investigation, the former chief operating officer and chief financial officer of Preferred Family Healthcare were indicted by a federal grand jury on March 29, 2019. They pleaded not guilty, and are awaiting trial, which is scheduled to begin on Oct. 3, 2022.