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New York boots Armor Correctional; In Florida, Armor boss

named to powerful commission

author: Dan Christensen July 7, 2017

By Dan Christensen,

The company that provides health-care services to
thousands of jail inmates across Florida, including
Broward and Palm Beach counties, has been kicked
out of New York for allegedly “placing inmates’ health
in jeopardy.”

Armor Correctional Health Services paid $350,000 in
penalties and agreed not to bid on or enter into any
contract to provide jail health services in New York
state for three years, settling formal charges brought
in July 2016 by New York Attorney General Eric T.
Schneiderman. The lawsuit was filed after a dozen
inmates died since Armor was hired, including
five found to have received inadequate medical
care, Schneiderman’s office said.

“For-profit jail providers must ensure that
appropriate medical care is provided in jails,
where many inmates suffer from complex
medical needs,” Schneiderman said when the
settlement was announced in October. “This
settlement sends a clear message that
companies who fail to provide the required health
services to inmates won’t be tolerated in New
York State.” Armor Correctional provided Dr. Jose Armas, owner and president of Armor
comprehensive medical services to the Nassau Correctional Health Services, right, and Gov. Rick
County Correctional Center.

Five months later, however, Florida Gov. Rick Scott appointed Armor Correctional founder and
president Dr. Jose “Pepe” Armas to a coveted seat on the powerful Constitution Revision
Commission that will recommend changes next year to the Florida Constitution.

Armas and companies he controls have contributed nearly $300,000 to Scott’s election
campaigns, his Let’s Get to Work political committees and to the Republican Party of Florida.

“Armas is a distinguished physician and healthcare executive whose focus on patient-centered
care has defined his career,” Gov. Scott’s office said in announcing his appointment to the
commission in March.

A spokeswoman for Armas at Miami’s EvClay
Public Relations sought to downplay Armor
Correctional’s New York troubles, saying the
company had made a “business decision” to pull
out of New York three years before the
settlement. Similarly, she described Armas as
“solely” an investor in Armor and “not involved
in its daily operations.”

Florida corporate records, however, have for
years listed Armas as Armor’s president. And
the company’s federal income tax returns from
New York Attorney General Eric Schneiderman
2009 through 2013 state that Armas owned 100
percent of Armor. They also show that in 2012-
2013 Armor paid Armas $9.6 million in dividends.

What happened in New York wasn’t the first time an Armas-led company has been in trouble.

In 2013, Armas’s MCCI Group Holdings LLC paid $1.6 million to the U.S. Department of
Justice to settle a whistleblower lawsuit under the False Claims Act alleging that MCCI had
violated the federal Anti-Kickback Statute and the Anti-Inducement Act. MCCI denied the
allegations, but also paid another $300,000 in attorney fees to the whistleblower’s attorney.

“MCCI reached a settlement to avoid the delay, inconveniences and expense of litigation,” said
Armas spokeswoman Melisa Chantres.

At the time, MCCI owned and operated medical clinics in Miami-Dade and contracted with
Humana, which was also named in the qui tam suit, to provide care, including prescription
drugs, to Medicare and Medicaid beneficiaries.

The complaint, filed in federal court in Miami, did not allege any wrongdoing by Armas himself,
but contended that MCCI broke the law “by providing to its current and potential Medicare
beneficiaries free services and gifts, such as transportation, meals, beauty and salon services,
massages and entertainment,” according to the settlement agreement. The illegal activities
allegedly took place between 2000 and 2012.

Scott’s Medicare fraud case
Long before Scott became governor in 2011, he was the founder and CEO of health-care titan
Columbia/HCA and at the center of a much larger Medicare fraud case. Scott quit
Columbia/HCA amid an FBI probe in 1997, and the company he built later paid a record $1.7
billion in criminal and civil fines.
MCCI was named in another South Florida whistleblower case filed by Dr. Mario M. Baez in
2012 and made public last year. Baez accused MCCI, Humana and several Palm Beach
County physicians of “upcoding,” a fraudulent billing scheme in which health-care providers
charge Medicare, Medicaid and other insurance payers for more expensive services than were

Last month, the U.S. formally intervened in the case to recover damages against only one of
those defendants, Dr. Isaac Kojo Anakwah Thompson, and not against MCCI. Assistant U.S.
Attorney Mark Lavine did not explain in court papers why the government declined to intervene
against MCCI or Humana. Thompson, Baez’s former partner, was sentenced to 46 months’
imprisonment in July 2016 after pleading guilty to health-care fraud.

Baez could have filed an amended False Claims Act complaint to proceed against MCCI in the
name of the United States, but did not do so. MCCI spokeswoman Chantres said the company
was never served legal notice of the lawsuit and called Baez “a complete stranger to MCCI.”

In Broward, Armas’ Armor Correctional, its
doctors and Broward Sheriff Scott Israel are
defendants in a federal civil rights lawsuit in the
death of William Herring Jr., 22, a mentally ill
inmate who starved to death in December 2012
while allegedly being deprived of treatment.

The lawsuit filed last December by Fort
Lauderdale attorneys Greg Lauer and Christina
Currie notes that Armor was being paid $25
Fort Lauderdale attorneys Christina Currie and
million a year by the sheriff’s office to provide
Greg Lauer
comprehensive health care to county inmates.

“However instead of holding true to its promise Armor chose to maximize profits. Armor knew
that the result of putting profits before patients would be that some inmates with serious
medical conditions would not get the care that they were entitled to,” the lawsuit says.

The complaint goes on to identify five other Broward inmates who it says died “slow, horrible
and preventable deaths in the same jail” from 2011-2012 because of Armor’s decision to
maximize profits. The five are identified as: William Campbell, arrested for DUI; Gary Joseph
Smith, arrested for possession of cocaine; Calvin Goldsmith, arrested for trespassing; Raleigh
Priester, arrested for throwing a rock at a city employee; Arthur Sacco, arrested for an
unspecified misdemeanor.

Broward Public Defender Howard Finkelstein’s office represents many inmates under Armor’s
care. He said what he’s observed about Armor is disturbing.

“If you have a family member who is in jail and their life depends on Armor for medical
treatment, you’re in trouble,” Finkelstein said. “The name of the game with Armor is to withhold
treatment until the inmate is released, sent to prison and it becomes someone else’s
treatment, or dies.”

Chantres said Armor does not comment on pending legal matters, but noted the company
“strives to deliver excellent patient care daily.”