Individuals Charged With Defrauding Non-Profit Health-Care System

[nitpicker]

https://www.justice.gov/usao-co/pr/individuals-charged-defrauding-non-profit-health-care-system

Department of Justice
U.S. Attorney’s Office
District of Colorado

FOR IMMEDIATE RELEASE
Wednesday, October 24, 2018

Individuals Charged With Defrauding Non-Profit Health-Care System

DENVER – A federal grand jury for the District of Colorado returned an indictment on October 11, 2018 charging David Paul Rietz, age 59, of Arvada, Colorado and Richard Scott Cartwright, age 46, of Goodyear, Arizona with mail fraud, wire fraud, conspiracy to commit mail and wire fraud, aiding and abetting, money laundering, and conspiracy to commit money laundering U.S. Attorney Bob Troyer and IRS – Criminal Investigation Special Agent in Charge Steven Osborne announced. Rietz and Cartwright, who appeared at their initial appearances on October 15 and 18, respectively, were released on a personal recognizance bond. They have both entered not guilty pleas. A third defendant, Lyle William Perry, age 59, of Lakewood, Colorado, who was charged by information with conspiracy to commit money laundering on October 12, 2018, also entered a not guilty plea at his arraignment.

According to information contained in the indictment and information, Rietz was an employee of Catholic Health Initiatives (CHI), a nonprofit health-care system with headquarters in Englewood, Colorado, and Cartwright was a principal of Cross IT Group Corporation (Cross IT). Between approximately September 2013 and at least January 2014, Rietz and Cartwright conspired to defraud CHI and split the money obtained from CHI under materially false and fraudulent pretenses. Rietz was responsible for a software integration project at CHI involving use of proprietary software sold by a third-party company. Rietz used his authority to require that software company to use Cross IT as a third-party reseller and to hire Cross IT to implement the software..

In his role as software reseller and IT contractor for CHI, Cartwright submitted twenty-five “quotes” to CHI for software and services, totaling over $72 million. The quotes were based on specifications Rietz provided. Rietz then signed the Cross IT quotes to have them processed through the CHI system. Purchase orders were issued based on the submitted quotes and CHI eventually paid Cross IT $19,884,904.28 in four payments.

After receiving the CHI payments, Cartwright caused funds from the CHI payments to be transferred to bank accounts controlled by Perry, representing the payment was an investment in Perry’s company, Gradum, Inc. Perry then transferred funds to Reitz, falsely representing the payment from Gradum to Rietz were for legitimate purpose, including a “finder’s fee” of $1,760,000 for a real estate development project, the purchase of computer hardware for $590,000, and the purchase of gold coins for approximately $745,000 on behalf of Reitz.
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