Donald Kevin Collins and Charles Turner were indicted in U.S. District Court in Greeneville, charged with conspiracy to commit mail fraud and 15 counts of mail fraud. Turner agreed to plead guilty to the conspiracy charge, while Collins pleaded guilty to all of the charges.
For six years, the two men perpetrated a scam on Mountain Empire Surgery Center in Johnson City. They created a fake company, submitted false invoices and purchase orders and ultimately tricked the center's owners in paying them nearly $1.4 million for equipment never received.
On Wednesday, Turner was sentenced to six months in prison for his role in the conspiracy. Turner did receive a reduced sentence for providing “substantial assistance” and being “extraordinarily cooperative” during the investigation.
Collins, on the other hand, received a 51-month prison sentence on Wednesday. Judge Ronnie Greer also ordered the two men pay $1.38 million in restitution to MESC.
ABOUT THE CONSPIRACY
According to court records, Collins worked at Mountain Empire Surgery Center in Johnson City, first as a supply clerk beginning in May 2000 and then as a material manager in 2003. Collins was responsible for ordering and receiving medical supplies and equipment for MESC.
Prosecutors say in early 2009, Turner was a student at East Tennessee State University. He met Collins through Collins' wife, who worked in the Office of Financial Aid at ETSU. The plea agreement states Turner was one year short of earning his criminal justice degree when he ran out of money to pay for tuition.
Initially, Collins deceived Turner into believing they were conducting a lawful, business operation, but in April 2010, Turner became fully aware he was involved in a criminal conspiracy, court records state.
CREATING A FAKE COMPANY
The conspiracy involved creating a fake medical supply company called Turner Distributors and opening bank accounts at Carter County Bank.
From there, prosecutors say the two men created and submitted false purchase orders, invoices and packing slips to MESC purporting to show MESC had received medical supplies and equipment from Turner Distributors, knowing they would never receive the equipment.
United Surgical Partners International – the owner and operator of MESC – would then issue a check to Turner Distributors.
Prosecutors say the two men would then deposit the checks into the accounts with Turner removing the cash, keeping about 35 percent for himself and the balance for Collins.
During the six year conspiracy, Collins created 180 false purchase orders, packing slips and invoices to MESC and received more than $1.38 million in payments for equipment never delivered.