Ex-lobbyist implores judge to OK release
Cranford cites responsibility as father
SPRINGFIELD, Mo. — The lobbyist who bribed Arkansas legislators in a Medicaid fraud scheme pleaded with a federal judge Monday to let him out of jail so he can see his children.
The presiding magistrate, however, said he couldn’t disregard a threat that Milton R. “Rusty” Cranford once was accused of making on a witness’s life.
“The court is going to struggle with the thought he’s not a danger to the community,” federal Magistrate Judge David P. Rush said in closing at an hourlong bond hearing in federal court in Springfield.
Cranford was arrested in Bentonville on Feb. 21, 2018, and pleaded guilty to one count of federal program bribery on June 7, 2018. He is awaiting sentencing and could face up to 10 years in prison. He has remained an inmate in the Green County, Mo., jail since his arrest.
Rush noted that Cranford has spent an unusually long time awaiting sentencing. Final resolution of the case Cranford is involved in cannot take place until indicted superiors of Cranford’s are tried. That trial is not set to begin until April 2021, and Cranford is being held as a witness.
Without bond, Cranford is looking at staying in the jail at least until that trial is over, defense attorney Nathan Garrett argued.
Rush took the bond request under advisement, rendering no decision Monday and not ruling out the possibility of Cranford’s release.
“Everyone I have ever ordered detained loves their children,” Rush said.
Federal authorities would have charged Cranford over the murder-for-hire allegation if it were credible, Cranford’s defense attorney argued in the hearing Monday. Furthermore, since Cranford and the alleged target have both pleaded guilty, the issue is moot, Garrett said.
Federal authorities only brought up the allegation of a murder scheme to prevent Cranford from being released on bond after his arrest, putting pressure on him to cooperate, Garrett said.
“It worked,” he told the magistrate.
Cranford is a key witness in an ongoing Medicaid fraud investigation in which state lawmakers in Arkansas and health care service executives in Arkansas and Missouri have been indicted.
Since his guilty plea, Cranford has appeared three times before federal grand juries in the corruption investigation, has met with federal investigators 10 times and has also met with investigators for the state of Arkansas, federal prosecutors confirmed.
Cranford’s cooperation was vital in obtaining indictments against almost everyone arrested so far in the fraud scheme, Garrett said. Yet people Cranford helped indict or convict are free on bond, he said.
The fraud investigation has yielded guilty pleas from former state Sens. Jeremy Hutchinson of Little Rock and Henry “Hank” Wilkins of Pine Bluff, among others. All 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.
Cranford, 60, took the stand at Monday’s hearing to make a statement, an act that both Garrett and Rush described as rare. No witnesses testified. Cranford’s remarks were a statement, not testimony, Rush said. No cross-examination was allowed.
Cranford attended the hearing with shackles on his hands and feet, wearing the gray-striped uniform of an inmate.
“It’s been a long 20 months,” Cranford told Rush. Cranford said he tries to talk to younger inmates when they arrive at the jail, “and I have seen several come in again and again. It has become a life cycle for them, and I try to help them. This isn’t a life cycle for me.
“I take responsibility for what I did, but my greatest responsibility is being a father. I have children from age 34 to age 8.”
Two of his children are minors, he said. One adult son has mental health struggles, Cranford said. He also has a younger daughter who has autism and who needs him, he said.
Cranford also said federal prosecutors mischaracterized his drug use, adding that he has “never taken a pill for recreational use.” His use of prescription painkillers was an issue at a bond hearing shortly after his arrest. Cranford has taken no prescription drugs since his arrest, federal authorities confirmed at Monday’s hearing.
Assistant U.S. Attorney Steven Mohlhenrich argued that Cranford has had 20 months in jail to break a drug habit but has had no drug counseling or addiction treatment. Cranford could easily relapse under all the stress he faces, Mohlhenrich said.
Cranford had prescriptions previously, but at the time of his arrest, he was in possession of drugs from prescriptions made out to other people, Mohlhenrich said. Cranford’s behavior could change if he resumes drug abuse, increasing the risk of him becoming a danger, he argued.
Garrett said the court could impose a strict regimen of drug testing, along with other restrictions, if it agreed to Cranford’s release.
He added that Cranford’s maximum sentence of 10 years stood no chance of being fully imposed because of Cranford’s full and vital assistance in so many cases. Cranford has already served a considerable amount of whatever sentence is likely to be imposed, he argued.
If Cranford is released, he will return to his family home near Texarkana near his younger children, “the only significant possession he has left,” Garrett said. Cranford is also willing to post a property bond that would forfeit the home if he breaks the conditions, Garrett said.
“I don’t think you’re a flight risk anymore,” Rush told Cranford when the attorneys were finished. “You’d be foolish if you attempted to flee.”
THE CASE
A federal grand jury in Missouri indicted Cranford on one count of conspiracy and eight counts of accepting bribes. The case involves Medicaid fraud on behalf of Preferred Family Healthcare.
Cranford accomplice D.A. Jones, a lobbyist based in Philadelphia, informed Cranford in late 2017 that he was going to confess and plead guilty in the federal investigation of the fraud scheme, documents show.
Cranford later approached a long-time acquaintance and told him that Jones needed to “disappear,” according to court documents from Cranford’s first bond hearing. The supposed hit man has not been named publicly in federal court documents. Unbeknownst to Cranford, the man he approached had already agreed to be an FBI informant in another matter, federal prosecutors have said.
Since Cranford’s arrest, a federal grand jury in Missouri has indicted Preferred Family’s former chief operating officer and chief financial officer. Other company officers as well as board members and former Arkansas legislators have pleaded guilty to charges in the ongoing investigation.
One former state lawmaker, Sen. Jon Woods of Springdale, was convicted at trial.
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 off 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 that Cranford helped direct, according to his guilty plea. Indictments include his superiors at Preferred Family, Tom and Bontiea Goss.
Cranford first registered as a lobbyist in Arkansas in 2005, secretary of state’s office records show. His lobbying firms over the years include Cranford and Associates and the Cranford Coalition.
In 2007, Cranford became an employee and manager of Alternative Opportunities, a predecessor to Preferred Family Healthcare. Preferred Family and Alternative Opportunities merged in 2015. The company has used the name Preferred Family since.
Cranford’s contract with the nonprofit company was terminated on June 2, 2017, after news of the scandal broke with the indictment of Arkansas lawmakers earlier that year.