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October 20, 2014

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Former UMC chief set to stand trial on theft, misconduct charges

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Sam Morris

Former UMC chief Lacy Thomas.

Clark County officials are hoping next week will be “the beginning of the end” of at least one of the controversies that has been casting a shadow over University Medical Center.

The long-awaited trial of the public hospital’s former CEO, Lacy Thomas, is to begin Monday.

In February 2008, a county grand jury indicted Thomas on five counts of felony theft and five counts of felony misconduct of a public officer. Authorities alleged Thomas used the hospital’s money to pay friends and associates for work that was either never done or was worthless. UMC lost an estimated $10 million because of the no-bid contracts handed out by Thomas, prosecutors said.

County commissioners fired Thomas in January 2007, and since that time “there has been a cloud hanging over the hospital, and we need to move forward,” Commissioner Steve Sisolak says. “With this hanging out there it’s like having a sore tooth.”

Each of the theft charges carries a minimum sentence of one year in prison — but those charges could be tricky to prove because they involve Thomas directing contracts to others rather than pocketing the money himself.

A misconduct charge might be easier to prove because prosecutors only need to convince jurors that Thomas engaged in unlawful activity “for the private benefit or gain of himself or another.”

Thomas’ lawyer is likely to counter, however, that none of the contractors was charged with any crimes.

And if prosecutors are arguing that Thomas is the one who benefited, the state has the burden of proving that.

Before the indictment, sources close to the investigation hinted that Thomas and his wife, Henrene, got kickbacks. Those sources told the Sun that the couple flew to Aruba in 2005 at the expense of one of the contractors in question, and that a bank account was established in her name for kickbacks from contracts awarded to friends in Chicago.

When the indictment was handed down, however, it included nothing about kickbacks, and Henrene wasn’t named in the indictment.

Prosecutors won’t say why. They say they don’t want to try their case in the press.

Regardless of the outcome, it will put UMC’s troubles back in the spotlight.

District Attorney David Roger expects the trial will last at least two weeks, and coverage of the high-profile case is sure to remind the public of taxpayers’ massive underwriting of the public hospital, overseen by county commissioners.

Thomas’ defense lawyer, Daniel Albregts of Las Vegas, did not return repeated calls for comment. But Albregts can point out that even though Thomas was fired more than three years ago, UMC has yet to regain its financial footing.

The defense could try to cite that as proof that Thomas wasn’t really to blame for the financial losses during his tenure. In fact, the hospital ran $71 million in the red for the fiscal year that ended June 30, more than double the deficit when Thomas was at the helm.

And the controversies at UMC have gone beyond just the financial hemorrhaging in the wake of Thomas’ termination.

In April, the CBS News magazine “60 Minutes” told a national audience that UMC created a hardship for cancer patients by closing its outpatient oncology unit in a bid to save money. In November, the Sun exposed illegal leaks of patient information at the hospital. In December, the hospital was slapped with a federal lawsuit after allegedly refusing emergency room treatment for a woman who wound up going home to give birth to a premature girl, who died.

The hits just keep coming. This week state health authorities reprimanded UMC for allowing on-duty emergency room nurses to meet in a break room with County Commissioner Chris Giunchigliani. The meeting improperly drew the nurses away from patients, state Health Division inspectors concluded.

As far back as last fall, however, county commissioners were talking of washing their hands of the hospital, even selling the facility.

Rory Reid, commission chairman and a Democratic gubernatorial candidate, in January announced an initiative led by Las Vegas businessman and former university system Chancellor Jim Rogers to turn UMC into a teaching facility. Reid has since followed up with a suggestion that an independent board oversee the hospital’s operations, shifting that responsibility from the commissioners.

Larry Matheis, executive director of the Nevada State Medical Association, says what the Thomas case “does raise is the issue of oversight, whether county commissioners have the time with all the roles they have to manage something as complex as a hospital. Clearly, oversight is the question.”

Authorities allege Thomas’ malfeasance began as early as September 2004, less than a year after he was hired. It wasn’t until more than two years later that the commission began coming down hard on Thomas by questioning the hospital’s finances.

The argument that Thomas acted alone on the contracts in question without any advice or participation from purchasing agents, lawyers or other county officials “defies common sense,” says certified public accountant Louis Williams of Chicago, Thomas’ friend.

“It is highly unusual that one person would be allowed to award contracts,” Williams says.

He used the Internet to solicit donations from friends to help bail Thomas out of jail. Williams says he last spoke to Thomas by phone about a month ago.

“Obviously, he thinks he’s innocent and he is confident he hasn’t committed any crimes,” Williams says. “If it became a crime to do business with people you know, they would have to throw the whole town of Las Vegas in jail. This is America and people do business with other people they’re comfortable with.”

Sisolak says commissioners are “hoping justice will be served no matter what the jury decides. It should bring some closure, and that’s a positive thing.”

But Sisolak says he knows that even though “one storm cloud will be removed from the horizon for UMC, there are several others behind it.”

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