INDIANAPOLIS, Ind.-- Jewelry, Krugerrands, vacation homes and gambling junkets weren’t the only expenditures rung up by two of the lead defendants in a $16 million health care fraud scheme broken open by federal investigators this week.
James Burkhart and Steven Ganote bestowed campaign donations on favored politicians on both sides of the aisle from central Indiana to Washington, and now some of those candidates and officeholders are backing away from the accused businessmen.
Burkhart and Ganote are charged as the lead co-conspirators in what federal authorities claim was a fraud and kickback scheme dating back to early 2009 which resulted from the overbilling of services and supplies provided to more than 70 residential health care properties managed by American Senior Communities on behalf of the Health and Hospitals Corporation of Marion County.
Several Indiana politicians, as well as national candidates and parties, received donations from the two men.
“We learned of the indictment today and will return the campaign contributions received from Mr. Burkhart,” said a spokeswoman for Congresswoman Susan Brooks, who confirmed the representative received a total of $2,250 from the then CEO of ASC.
“We'll be donating to a charity. We have not identified which charity yet,” emailed a spokesman for Republican Congressman Todd Young who is linked in a tight U.S. Senate battle with Evan Bayh. “The total amount was $8,100. That's $5,400 from Burkhart and $2,700 from Ganote.”
The Bayh campaign said its candidate received contributions from Burkhart while the democrat was still a U.S. senator.
"These are serious charges, and should be pursued to the full extent of the law,” said a Bayh campaign spokesman. “It has been 11 years since we have received a contribution from James Burkhart, 4 years before the fraud began.”
Also issuing a non-comital response was Congressman Andre Carson, an Indianapolis democrat, who indicated through a spokeswoman that he would await direction from a federal judge before determining if $8,000 in campaign donations should be turned over to the court as part of any possible compensation to the fraud’s alleged victims.
U.S. Senator Joe Donnelly was also on the receiving end of $6,900 in donations.
"Because the campaign is not in a position to determine with certainty whether Burkhart's contributions were made from ill-gotten gains, prudence dictates that it donate his contributions to a yet-to-be-determined third-party or charity,” said Donnelly Campaign Finance Director Kelly Norton.
The presidential campaigns of Hillary Clinton, Donald Trump, Bernie Sanders, Ted Cruz, Marco Rubio, Ben Carson and Mitt Romney, as well as political parties and political action committees, also received money from the men.
“Any contributions in this case will be thoroughly investigated,” said U.S. Attorney Josh Winkler. “Let me make it clear to you that this investigation is by no means over. We have been looking into it for the last sixteen months. Some people needed to be charged and arrested but this investigation is by no means over.”
An attorney representing a witness in the investigation said that his client spoke with FBI agents and described the plot, to his knowledge, as self-dealing run amok with the owners of ASC the true victims of overcharges and reduced profits along with taxpayers.
“The fraud combined with the payment of kickbacks in this investigation can result in the overutilization of medical services, increased costs, corrupt medical decision making and patient steering and unfair competition,” said Mario Pinto, Assistant Special Agent in Charge from the U.S. Department of Health and Human Services.
Winkler indicated that the first round of indictments of five men would be followed by another wave of charges against as-yet unnamed co-conspirators.
Attorney Larry Mackey said his client, Burkhart, was at home in Carmel under federal pre-trial supervision after surrendering his passport.