U.S. says lobbyist in scheme should repay $3.7 million

Lobbyist Milton “Rusty” Cranford received $3.73 million in the fraud and bribery scheme involving Arkansas legislators and a health care company, according to court documents filed Friday.

Cranford should pay the taxpayers back, the government requested in a Friday motion.

Cranford, 60, pleaded guilty to one count of federal program bribery on

June 7, 2018.

He could face up to 10 years in federal prison. His sentencing is scheduled for Monday afternoon in federal court in Springfield,

Mo.

All the convictions involve bribes paid by Cranford to benefit Preferred Family

Healthcare of Springfield, Mo., which was one of Arkansas’ largest Medicaid recipients for behavioral health services before the scandal broke in 2017.

The case against Cranford relates to illegal lobbying for Preferred Family, which operated substance abuse and behavioral health treatment centers in five states, including Arkansas. It had 47 sites in Arkansas alone before having to sell them after losing its state Medicaid certification because of the scandal.

Cranford and other executives embezzled at least $4 million from the nonprofit group between 2011 and January 2017, according to federal prosecutors. Most of the money paid for illegal lobbying Cranford helped direct, according to his guilty plea.

Five former Arkansas lawmakers, four of whom were serving in the Legislature at the time of the bribes or who partnered with Cranford in the scheme as a lobbyist after leaving office, have been convicted in the two-state federal investigation involving Cranford. They are former Rep. Micah Neal and former Sen. Jon Woods, both Springdale Republicans; former Rep. Eddie Cooper, D-Melbourne, who joined Cranford’s lobbying firm; former Rep. Henry “Hank” Wilkins IV, D-Pine Bluff; and former Sen. Jeremy Hutchinson, R-Little Rock.

Along with Hutchinson, federal prosecutors in Missouri

charged the married couple who ran Alternative Opportunities of Missouri before its 2015 merger with Preferred Family with conspiracy, bribery, fraud and falsifying tax returns. Former Chief Operating Officer Bontiea Goss and Chief Financial Officer Tom Goss have pleaded not guilty to the charges.

Chief Executive Officer Marilyn Nolan pleaded guilty in the case. Nolan and the Gosses were dismissed by Preferred Family’s board after the scandal broke. Other former executives of the company also face charges.

Cranford is expected to testify in the trial of his indicted employers, which isn’t set to begin until April 2021.

Cranford will forfeit $17,989 in cash seized at the time of his February 2018 arrest in Bentonville, according to the terms of his plea agreement. He will be held liable for the

balance, if the motion is granted.

The U.S. attorney for the Western District of Missouri also requested Cranford forfeit:

• His $95,034 share of the sale of property at 432 Sorrento Drive in Osprey, Fla.

• His share of the property at 2004 Boca Chica Ave. in North Port, Fla. No value was given. • His $45,667 share of property at 832 E. Hilltop Drive in Rogers.

• Another $500 in cash of Cranford’s in the possession of the government.

At this time the federal government isn’t seeking forfeiture of Cranford’s property in Douglasville, Texas, but that may change, according to the filing.

Since his guilty plea, Cranford has appeared three times before federal grand juries in the ongoing corruption investigation, has met with federal investigators 10 times and has also met with investigators for Arkansas, federal prosecutors confirmed during an Oct. 8 bond hearing. That cooperation should weigh heavily in his favor at sentencing, defense attorney Nathan Garrett said at the hearing. Cranford’s request for release on bond hasn’t received a ruling.