Police finish UMC probe

Las Vegas police have finished a nine-month investigation into allegations the former head of University Medical Center funneled hospital contracts to friends who did little or no work for the money they received.

Detectives handed a 60-page report to county prosecutors Thursday detailing their case against Lacy Thomas, who was fired in January for misleading county commissioners about skyrocketing financial losses at the public hospital.

"We do feel there is enough evidence to go forward with a criminal prosecution," said Deputy Chief Kathy Suey, who heads the Metropolitan Police Department's Homeland Security Division.

She would not say whether police had recommended charges against Thomas or others.

"We really look to the district attorney to tell us what the charges should be," Suey said.

District Attorney David Roger said his office will review the case file before taking the next step, which could include filing criminal charges, asking for more investigations or calling a grand jury.

A decision could come in a few weeks, he said.

Thomas had been under police scrutiny since November, after a county auditor criticized the hospital's decision to outsource patient admitting, billing and other revenue-generating functions to a private company. The investigation went public in January, when detectives, armed with a search warrant, seized file boxes and computers from the hospital's executive offices.

Detectives with the Criminal Intelligence Section worked full-time on the investigation and the complicated financial analysis of hospital records and contracts. They also made multiple trips to Chicago and interviewed "countless" people, Suey said.

"These types of cases take a lot of hours, a lot of manpower, and they take a long time."

The investigation centered on hospital contracts awarded to at least seven companies run by friends and associates of Thomas from his days in Chicago, where he had run the John H. Stroger Jr. Hospital of Cook County.

UMC's former chief operating and financial officers, who were eventually replaced by Thomas' assistants from Stroger, told police he bypassed them and awarded "professional services" contracts to his friends in the Windy City, according to a police report.

Hospital officials told investigators the companies received between $22,575 and $673,268, but did not produce any reports or other work products, the report said. The former executives also told police Thomas ordered the hospital accounting department to pay those companies first, despite a three-month backlog of bills from other vendors, the report said.

On the same January morning police searched the hospital, Clark County Manager Virginia Valentine fired Thomas after outside auditors revealed the hospital lost $34.3 million in fiscal year 2006. That was $15.5 million more than he had reported to commissioners in November.

New hospital administrators in March asked the commission for a $60 million bailout to cover last year's fiscal losses. The bailout, which was granted, wiped out more than half of the county's fund to build parks, community centers and other projects.

The hospital also received a $41.4 million county subsidy for its 2007-08 budget.

Valentine said Thursday through a spokesman that county officials would continue to "cooperate fully" with investigators and hoped the matter would be resolved. UMC will continue to provide quality care to the public, she said.

Review-Journal reporter Annette Wells contributed to this report