Columbia/HCA Healthcare Corp. has sued former executive Samuel Greco and several vendors alleging a "pattern of racketeering" to bilk millions from the company.
The suit, filed last week in U.S. District Court in Tampa, Fla., centers on Columbia's purchasing program, which was run by Greco, formerly senior vice president for financial operations. He resigned in August 1997, weeks after the federal government started its nationwide probe into Columbia's billing practices.
Columbia contends that over seven years, the group devised schemes using Greco in his top management position to purchase goods and services from several vendors all managed or owned by the same people.
"These newly incorporated vendors had no prior existence, much less experience, expertise, employees and resources necessary" to provide necessary services, Columbia said in the lawsuit. Columbia alleges the companies received substantial payments for the services.
Columbia is looking to recoup $10 million from the losses on the contracts plus $2.5 million from Greco's severance package.
Some of the goods included telecommunications and computer equipment that were unnecessary or never delivered. Services included electronic billing and financing receivables. Columbia contends in the lawsuit that it could have hired other firms to do the same tasks at a lower price.
An internal memo to all employees says the suit has nothing to do with the federal government's ongoing probe into Columbia's billing practices, but the company has informed the Justice Department about the suit.