On June 20, 2000, Roth sent an e-mail to Villazan's attorney, Desmond and others at SMS, informing them that she was withholding or concealing from the County the "services agreements" with Faustech and SMS, including information about the payment schedules and milestones, even though Cook County required the joint venture to include all written agreements with the bid. Roth allegedly directed that the payment schedules and milestones "are, and should be treated as, confidential to the parties."

In August 2000, Villazan requested that SMS immediately pay him $300,000, instead of following the agreed payment terms. Based on Roth's representations to SMS management that the $500,000 flat fee was the only compensation agreement between them, SMS paid Villazan $300,000 on approximately August 23, 2000, as a partial payment for obtaining the radiology contract.


On September 23, 2000, the indictment alleges that Villazan and Faustech paid $20,000 to an unnamed employee of the Cook County Office of Contract Compliance with intent to influence the awarding of the hospital's radiology contract.

The indictment alleges that during the GE litigation between October 2000 and November 2001, to protect and preserve the fraudulently obtained contract, the defendants and others hid the $500,000 flat fee agreement from Cook County and the court, claiming instead that Faustech would share in the profits and losses in proportion with its 30 percent ownership, and that the $500,000 fee agreement was merely an "advance of profits." During the litigation, SMS allegedly did not produce requested documents relating to the flat fee agreement and represented through witnesses and in arguments that no flat fee agreement existed.

Desmond was charged in both the fraud scheme and the perjury count with allegedly falsely and fraudulently testifying at trial that the joint venture affidavit was true and accurate (even though SMS had failed to disclose the $500,000 fee agreement) and that the $300,000 payment to Faustech was an advance of profits. An in-house attorney for SMS attended court proceedings, and reported regularly to Roth and to SMS management, including SMS Officers A and B, the company's positions in the litigation, including its false and fraudulent position in court papers and proceedings that SMS did not have a flat fee agreement with Faustech and Villazan. To preserve and protect the contract, SMS and Roth took no steps to correct the ongoing misrepresentations and false and fraudulent testimony presented to the court, according to the indictment.

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