Sept. 22--As the longtime owner and CEO of Edgewater Medical Center, Peter Rogan amassed a multimillion-dollar fortune before the hospital's 2001 collapse amid a massive Medicare fraud scheme, federal prosecutors say.
For years afterward, as more than $188 million in civil judgments piled up against him, Rogan conspired with his lawyer and friend to hide his assets in an obscure trust account operated in the Bahamas to keep prosecutors and others from collecting what was owed, according to court records.
Even as Rogan cried poor, he and his wife used more than $11 million from the trust -- including to pay personal expenses and maintenance on Rogan's 48-foot yacht, Fringe Benefit -- over a five-year period, prosecutors said.
On Tuesday, the years of deception ended for Rogan in a federal courtroom in Chicago as he pleaded guilty to one count of perjury for lying in a 2006 sworn affidavit when he claimed he had no control over the account in the Bahamas.
"That is correct, your honor," the white-haired Rogan, 69, answered when U.S. District Judge Harry Leinenweber asked him if he had filed the false affidavit.
Under the terms of his 24-page plea agreement, Rogan, who is in custody, faces at least one year in prison. However, prosecutors said they will seek the maximum of 21 months when he is sentenced Oct. 14.
The plea deal signals the end of nearly seven years of criminal proceedings against Rogan, who had fled the country and then fought extradition from Canada until three months ago. But his case is far from over. Though some funds were recovered from the trust and other assets, Rogan still owes tens of millions of dollars as part of separate civil proceedings against him.
In court Tuesday, Assistant U.S. Attorney Andrew Boutros told Leinenweber that the plea deal did not include a fine against Rogan because of the ongoing probe into his assets.
"We didn't think it was necessary to leapfrog our civil partners," Boutros said.
Edgewater Medical Center closed in December 2001 after charges alleged a massive health care fraud involving payment of kickbacks for patient referrals and medically unnecessary hospital admissions, tests and services. Several doctors and employees were convicted in a scheme that prosecutors said cost Medicare and Medicaid tens of millions of dollars.
Rogan was not charged criminally at that time, but in 2002 prosecutors filed a civil lawsuit alleging he was responsible for Edgewater submitting millions of dollars of false Medicare claims. In a 2006 trial, U.S. District Judge John Darrah found Rogan had lied on the stand and destroyed documents to obstruct justice and entered a $64.2 million judgment against him, records show.
The next year, the hospital's chief creditor, Dexia Credit Local, was awarded more than $124 million in its federal lawsuit against Rogan and his companies, records show.
After Rogan fled the country, U.S. District Judge Matthew Kennelly in 2008 began separate criminal contempt proceedings against Rogan alleging he concealed assets, lied to the court and violated orders to turn over documents stemming from the Dexia judgment. As part of Rogan's plea deal, Kennelly dismissed the contempt proceedings.
In 2011, Rogan was indicted in Chicago on charges alleging he and his former lawyer, Frederick Cuppy, schemed to hide details of the Bahamian trust account.
In his plea agreement with prosecutors, Rogan admitted creating a secret "Letter of Wishes" that called for Cuppy, as the administrator of the trust, to distribute all of the assets to Rogan. Cuppy pleaded guilty in 2013 and was sentenced to a year in prison, records show.
jmeisner@tribpub.com
