Sherif Abdelhak, in the last holdover of the 1998 crash-and-burn of 14-hospital Allegheny Health, Education and Research Foundation, Pittsburgh, has pleaded no contest to a misdemeanor charge of misapplication of entrusted property.
Abdelhak, 56, the former CEO of AHERF, was sentenced to almost the maximum penalty allowable under the law -- 11 1/2 months to 23 months in jail. He will serve his time in an alternative facility after reporting to jail on Tuesday and will be allowed to work or perform community service.
As chief of what once was one of the hospital industry's most aggressive players, Abdelhak authorized the raid of hundreds of charitable endowments when the healthcare system began to fail. Over the past months, courts have dismissed the vast majority of the 1,500 criminal counts first lodged against him and two other senior AHERF executives in March 2000.
Former AHERF CFO David McConnell was admitted to a program for first offenders, which placed him on 12 months probation, required him to complete 150 hours of community and imposed $16,700 in restitution. Charges were dropped against AHERF General Council Nancy Wynstra.
The lone misdemeanor charge for which Abdelhak was sentenced yesterday belied the extent of the misdoing, and sentencing guidelines were "woefully inadequate," Allegheny County Judge Raymond Novak said. Although the record shows that Abdelhak did not take funds for his personal use, he clearly set the tone for a culture of excess that existed at the once high-flying AHERF, Novak said.
The plea agreement with the state attorney general's office averted a jury trial scheduled to begin next week. Maintaining his client's innocence, Abdelhak's attorney, J. Alan Johnson, said in a written statement that he supported the plea bargain "given the current environment."
Novak estimated a jury trial would have taken 37 weeks and would have cost the state millions of dollars more on top of the $2 million it already paid for forensic accountant services. In addition, it would be "extremely difficult to keep a jury focused" on a case as complex as this one, Novak said.
"I hope this sentence sends a strong message to business leaders across Pennsylvania: You are accountable for your actions," Attorney General Mike Fisher said in a written statement. Fisher is the Republican nominee for governor in the upcoming November election.
"You are accountable for your actions," he said. "You can't hide the financial health of your company with accounting tricks. This case was particularly egregious, because charitable dollars were used to keep the company afloat."