Two former top officers of Tower Health, a defunct California HMO, were arraigned on eight felony counts for allegedly siphoning more than $2 million in Medicaid reimbursements intended for physicians.
The company's former president and chief executive officer, Robert Hugh Cohen, 45, and former chief financial officer, John Carlo Morreale, 44, pleaded not guilty felony charges of grand theft, perjury, Medicaid fraud and filing false corporate financial reports. At deadline, attorneys for the men could not be reached.
A jury trial was tentatively scheduled to begin Sept. 6. Tower Health, Long Beach, Calif., filed for bankruptcy in 2001. The state seized the 100,000-member Medicaid HMO after an audit revealed the plan had $650,000 in cash and total liabilities of $13.6 million. The attorney general's office alleged that Cohen and Morreale loaned more than $10 million in Tower Health money, including $2 million in Medicaid funds, to family members and companies owned by Cohen, then wrote off the loans.