By Terri Jo Neff
The former CEO of one of Arizona’s largest healthcare companies must pay nearly $774.500 before Nov. 19 to ensure his plea deal on fraudulent schemes charges stays in place, and give himself a better chance to avoid a prison sentence.
William J. Timmons, former head of Hacienda Inc, and various nursing care and health supply businesses is set to be sentenced in the Maricopa County Superior Court after pleading guilty in June to two Class 2 felonies stemming an elaborate scheme that bilked Arizona taxpayers out of millions of dollars through improper billing for services.
Timmons, 74, will have an opportunity to argue mitigating factors to Judge Timothy Ryan in an attempt to get probation instead of prison. But first, he must pay $500,000 in restitution to the Arizona Health Care Cost Containment System (AHCCCS) and $274,500 in fines to the Arizona Attorney General’s anti-racketeering revolving fund.
Failure to make the payments could lead Ryan to reconsider the plea deal.
Meanwhile, Timmons’ co-defendant Joseph O’Malley will be back in court Sept. 24 for a case management conference in advance of his March 2022 trial on similar charges. O’Malley,58, remains out of custody pending trial.
In August 2020, Arizona Attorney General Mark Brnovich announced that a grand jury had indicted Timmons and O’Malley following an investigation into allegations the two intentionally misallocated funds from AHCCCS as well as the Arizona Department of Economic Security’s Division of Developmental Disabilities.
The schemes involved manipulating costs for services; the excess funds were then used by the men to pay themselves and others inflated salaries and bonuses.
Timmons, who had been with Hacienda for nearly 30 years until 2019, faces up to 12.5 years in state prison on each of the counts. However, his plea deal did not contain a prison-mandatory stipulation, so Timmons can argue for probation. If Ryan does impose a prison sentence, the minimum would be three years.
Hacienda has already agreed to repay AHCCCS nearly $11 million in overpayments. A repayment plan calls for an initial payment of $7 million followed by monthly payments of $50,000.
In addition, the company has consented to a $1 million fine which will be allocated between the AHCCCS Inspector General and the Attorney General’s Office. In exchange, the State has agreed to not pursue criminal or civil action against Hacienda provided the company complies with the consent agreement.
The Attorney General’s Office initiated a criminal investigation into Hacienda’s finances in early January 2019 after learning the company failed to comply with its contract terms. Among the allegations is that the company engaged in improper billing from 2013-2018.
The investigation also revealed that the Hacienda board of directors did not receive accurate financial data from Timmons and O’Malley, nor had the directors inquired as to the company’s performance. A new administrative team was put into place in March 2019.