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Fifth guilty plea in $9.5 million 'fake Cerner Corp.' fraud scheme

by Thomas Dworetzky , Contributing Reporter

“As soon as Cerner employees became aware of this incident, they immediately notified representatives at the hospital and contacted law enforcement to provide information central to the investigation and prosecution of this case,” Dickinson said.

In the course of their scheming, Davis and his cronies pretended to be Cerner employees, physicians, investors and others to rope people into their bogus dealings, the Justice documents state.
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“For example, conspirators forged signatures and misled doctors into guaranteeing over $8 million in loans from Community Trust Bank in Texas. Davis admitted that he and his co-conspirators fraudulently obtained five individual loans from Community Trust Bank,” stated the Justice Department.

Beyond that they also “impersonated bondholders in order to file an involuntary bankruptcy petition against their own company, CMI Holding Company, in the Northern District of Texas – and kept up the pretense “throughout the litigation in phone calls and email communications, and by signing as the bondholders in a settlement agreement.”

That hustle reaped them a $1.8 million settlement of the involuntary bankruptcy.

The real Cerner Corp. is a major player in the health care space. In July, it made news when it bumped up its $50 million estimate on data center costs to about $75 million, as HCB News reported at the time.

The Defense Healthcare Management Systems Modernization (DHMSM) is presently set to cost $4.3 billion – so it's a relatively small bump up.

Beyond that, DoD spokesperson David Norley noted that the additional funds will go to better data access and keep up with a boost in data demands – and won't push the Cerner and Leidos deal beyond its $4.3 billion cap, which was set when it was signed last July.

On a DHMSM call in early July a spokesperson stressed, "when we're talking about clinical data, that availability can be the difference between life and death," adding that the cost of Cerner was “significantly higher” than early estimates, but it will still be “within 10 percent” of what it would have run, had the hosting been performed by the Defense Information Systems Agency.

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