Ex-CFO of Eastpointe get 3.5 years for embezzlement


Corey Friedman - Special to The Robesonian



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GREENVILLE, N.C. — The former chief financial officer for a behavioral health care provider that serves Robeson County will spend more than three years in prison for embezzling more than a half-million dollars in kickbacks.

William Robert Canupp pleaded guilty to conspiracy to commit federal program fraud, wire fraud and tax fraud March 17. Senior U.S. District Judge Malcolm J. Howard sentenced the 58-year-old Richlands man in a Greenville courtroom on Wednesday to 3.5 years in prison.

Canupp agreed to forfeit an Onslow County home, an SUV and a sports car as part of a $731,180 restitution agreement, according to court filings.

Canupp worked for Eastpointe, which is based in Beulaville. It has an office in Lumberton on Godwin Avenue.

“There is no greater tragedy than using the process of doing good, instead, for personal gain. But that is exactly what Mr. Canupp did,” Eastpointe board member Rob Boyette said in a victim impact statement filed in the case.

Canupp, who served as Eastpointe’s CFO from March 2010 to April 2013, and contractor Ronnie L. Davis were charged with conspiracy, bribery, organization fraud, wire fraud and money laundering on a 47-count indictment returned by a Wilmington federal grand jury on May 24, 2016.

A state audit revealed Canupp paid two contractors more than $1 million to renovate Eastpointe buildings, and the contractors paid the CFO $547,595 in a kickback scheme.

“Canupp hired his co-defendant, Ronnie L. Davis, to perform personal construction services without taking bids for the renovation projects and did not have the completed work inspected or approved,” U.S. Attorney’s Office spokesman Don Connelly said in a statement. “Additionally, Canupp created and submitted fraudulent invoices for the work Davis supposedly performed or for supplies and materials.”

Prosecutors said Canupp used stolen money to buy an $80,000 boat, high-tech video game systems, hunting equipment and to make mortgage and credit card payments.

A memorandum of plea agreement was entered in Canupp’s case in March. Most federal cases are resolved in plea deals due to federal sentencing rules; eight of the 47 charges Canupp faced in the indictment carry maximum prison terms of 20 years.

Canupp agreed to forfeit a waterfront Onslow County home with an appraised value of $292,150.

Also included in the federal asset forfeiture are a 2010 BMW 328i sedan and a 2009 Jeep Wrangler Unlimited.

Assistant U.S. Attorney Ethan Ontjes prosecuted Canupp. The FBI, Internal Revenue Service and offices of inspectors general for the Department of Health and Human Services and Department of Housing and Urban Development investigated the fraud case.

Eastpointe is a managed-care organization and local management entity that authorizes payment for Medicaid-funded and state-funded services. Based in Beulaville, it serves patients in Wilson, Edgecombe, Greene, Wayne, Lenoir, Bladen, Columbus, Sampson, Scotland counties as well as Robeson.

Eastpointe employs 300 people and manages an annual budget of roughly $300 million. It paid claims for nearly 40,000 people in the last fiscal year.

Eastpointe CEO Sarah Stroud said the organization has rebounded from the humiliation Canupp caused, noting that employees visited Eastpointe patients in shelters following Hurricane Matthew to ensure they were still being served.

“We believe that Eastpointe has emerged from this ordeal as a stronger organization and a leader among managed-care organizations,” Stroud said in a statement. “Moving forward, we are determined to work even harder to serve our members and help make our communities stronger and healthier.”

In January, Eastpointe announced plans to merge with Cardinal Innovations Healthcare, a Kannapolis-based managed-care organization. The combined MCO would serve roughly 1.1 million enrolled clients spread across nearly a third of North Carolina’s 100 counties.

State Auditor Beth Wood questioned Cardinal’s spending in a May report. Cardinal CEO Richard Topping received a base salary of $635,000, more than three times the maximum salary for mental health area directors set by the N.C. Office of State Human Resources.

Cardinal spent $123,631 on catered meals, alcohol and hotels for its board meetings in the 2015 and 2016 fiscal years, according to the audit, and paid $18,130 for a Christmas party.

“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” Wood wrote in her findings and recommendations.

In his response to Wood’s findings, Topping said no laws were broken, contended the state salary ranges for local management entity CEOs are merely recommendations and said the expenses Wood flagged as “unreasonable” account for just 0.34 percent of the agency’s administrative expenditures.

Raleigh-based Medicaid litigation attorney Knicole C. Emanuel wrote in a May 24 entry on her legal blog that Eastpointe could call off the merger, but would likely be on the hook for breach-of-contract penalties.

“If I were Eastpointe, I would run, regardless of the cost,” Emanuel wrote.

Boyette said in early June that the Eastpointe-Cardinal merger is still on track. While the state audit raised eyebrows, he stressed that Cardinal had no issues involving service delivery to health care consumers.

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http://www.robesonian.com/wp-content/uploads/2017/08/web1_canupp20178111020158792017811172419615.jpgCanupp

Corey Friedman

Special to The Robesonian

Corey Friedman is editor of The Wilson Times.

Corey Friedman is editor of The Wilson Times.

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