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Report: State DHS Kept Doing Business With Blacklisted Company

SPRINGFIELD, Ill. (CBS) -- The Illinois Department of Human Services is being blasted for funneling over $1 million to a suspect company.

As WBBM Newsradio's Keith Johnson reports, a state investigation is said to have uncovered $1.7 million in payments to a transportation business that had been blacklisted for fraudulent billing.

LISTEN: WBBM Newsradio's Keith Johnson reports


The office of the state Inspector General says the state had blacklisted Carterville-based Downstate Transportation Service Inc. two years before its 2008 criminal conviction, but still did business with the company for two more years.

Downstate transported patients to DHS psychiatric facilities, but the state's provider of Medicaid health services for the poor found the company billed for miles it drove without patients.

Downstate and its owner, Richard Wallace, were indicted on federal health care and mail fraud charges in 2006. Wallace was sentenced to three years in prison, but the state says that didn't stop the Department of Human Services from awarding Downstate over $825,450 for fiscal year 2007, and $935,000 in 2008.

The state also took away the Medicaid certification for Downstate, which is required for state work.

But Executive Inspector General Ricardo Meza reported that administrators in the agency's Division of Mental Health, including director Lori Rickman-Jones, knew full well that the state had blacklisted Downstate, but kept doing business with the company anyway.

Another DHS employee implicated, mental health division chief of staff Robert Vyverberg, responded to the investigative report that DHS sought another company after learning of the Downstate's Medicaid decertification, but could not find one.

He said Downstate "provided those services with a consistently high level of quality and without incident or injury," but didn't mention the fraudulent activity.

In addition to Vyverberg and Rickman-Jones, who's married to former state Senate President Emil Jones (D-Chicago), legislative and legal liaison Patrick Knepler and regional executive director Jordan Litvak were named in the Inspector General's report.

Human Services Secretary Michelle Saddler told the inspector general that Vyverberg and Litvak were counseled and reprimanded in writing. Rickman-Jones and Knepler were counseled. The inspector general had recommended just counseling for Rickman-Jones and Vyverberg and unspecified "discipline" for the other two.

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)

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