As Beaver County was in the process of closing the sale of the publicly run Friendship Ridge nursing home to the privately owned Comprehensive Healthcare Management Services back in March of 2014, the buyers experienced cash-flow issues leading county officials to “loan” the corporation at least $1.2 million so the sale could be completed. The “loan” directly conflicted with provisions of the sales agreement for the facility and was made without any additional contracts, official resolutions or even written documentation. The funds for the “loan” were withdrawn in person and in cash from a county controlled account at a local bank — without following state laws regulating the disbursements of funds from public accounts. Proper disbursement procedures could not have been followed because safeguards in the system would have prevented the release of funds as they were not justified by any ratified agreement at the time. Delays in the release of those funds could have lead to a disruption of the sale of Friendship Ridge, and in the process exposed deficits in the county’s budget being hidden from the public.
Those were the stunning allegations made to the Beaver Countian last year by a single confidential source with knowledge of the sale who spoke on condition they never be identified by name.
The Beaver Countian spent the past several months investigating its source’s allegations, obtaining withdrawal slips, unearthing handwritten notes, and discovering several emails which all appear to support the assertion that the county granted an ad-hoc “loan” (more appropriately defined as a cash advance) to the private corporation while the sale of Friendship Ridge was being finalized. As the Beaver Countian’s investigation into the alleged loan progressed, the newly elected Republican controlled Board of Commissioners say they were debriefed about the transaction by former Financial Administrator Vince LaValle, who was at the time fighting to hold onto his job while this publication began to reveal troubling information about the gross mismanagement of county controlled funds.
With all that the Beaver Countian’s investigation has uncovered, several county officials are now going on the record about discussions they were involved in; allowing their concerns to be shared publicly for the first time.
“After you started publishing about the money leaving county bank accounts, Vince [LaValle] met with me and he told me that the $1.2 million was a loan to Comprehensive [Healthcare Management Services],” Commissioner Sandie Egley told the Beaver Countian earlier this month. “He said there was no paperwork on the loan. He told me that he had kept track of everything for himself because he was not going to be the one going down for it.”
The $1.2 million unilateral withdrawal from Citizens Bank by Vince LaValle, who served as County Financial Administrator at the time, was made on March 12th of 2014, a period between the closing of the sale of the operations of Friendship Ridge as a managed care home and the closing of the sale of the building and real property it operated from.
Commissioner Egley told the Beaver Countian she felt LaValle was admitting to her something criminal had indeed taken place. “By him saying I am not going to be the one going down for this, I took it as him telling me that criminal activity occurred, that something wrong happened. My thought is that $1.2 million was given to Comprehensive when it shouldn’t have been, when it wasn’t their money yet. Vince told me he had step-by-step notes about what happened.”
Egley said LaValle never provided his personal notes to the Board of Commissioners. Lavalle resigned on January 8th after being notified he was being terminated — it was the day after the Beaver Countian ran an investigative report revealing a second unilateral withdrawal in the amount of $788,000 had been made by LaValle from a county account, a withdrawal he had not informed the new Board about.
The version of events that Commissioner Egley said LaValle shared with her were in line with what the Beaver Countian’s original source had relayed to this publication.
On December 16th of last year the Beaver Countian filed a formal Right-To-Know request seeking, in part, “a copy of any agreement, contract, or other document evidencing a loan given by the County to Comprehensive Healthcare/Friendship Ridge in 2014.” The county invoked a 30 day extension, saying it needed time to conduct a search to see if any such records existed. On January 21st of this year, the Beaver Countian received a formal response from the county stating, “no agreement or contract evidencing a loan exists.”
As part of its December 16th Right-To-Know request, the Beaver Countian also sought any “other documents evidencing a loan.” A month later, this publication received a denial of that request, stating, “as your request seeks records relating to an ongoing noncriminal investigation; such records are exempt from disclosure under the Right-To-Know Law.”
Courthouse sources tell the Beaver Countian the documents that were being withheld are financial records compiled as part of a reconciliation which showed county officials had in fact paid $1.2 million to Comprehensive Healthcare Management Services / Friendship Ridge before the sale was finalized.
Commissioner Sandie Egley is not the only person the Beaver Countian interviewed who said they had a conversation with Vince LaValle about a “loan” the county gave to the buyers of Friendship Ridge.
“I saw the money had been withdrawn from the account last year,” said County Financial Administrator Ricardo Luckow, who at the time worked as an outside contractor for Controller David Rossi’s office. “I asked [former Beaver County Financial Administrator] Vince [LaValle] about it, and he told me that it was a loan for Comprehensive [Heathcare Management Services]. I remember he specifically told me that Comprehensive was having money problems and they needed it to complete the sale […] they need it for a down payment.”
Luckow said the disbursement of funds to Comprehensive before the final closing on the sale of Friendship Ridge “amounted to something like an illegal cash advance.”
The sales agreement for the facility dictated the county would hold certain account receivables after the sale of Friendship Ridge’s operations had been closed until the final sale of the physical facility and real property had been completed later in the month.
“The provision was put in there to ensure we had enough money to make payment for bonds that would now be due because Friendship Ridge was no longer publicly owned and no longer serving a governmental purpose,” Luckow told the Beaver Countian. “Until that final closing occurred for the real property the county did not owe them that money […] It should not have been paid.”
Luckow told the Beaver Countian he has emails from LaValle referring to the loan, which he printed and is now storing outside of the courthouse. As the Beaver Countian reported earlier this month, emails and other electronic files referencing LaValle were somehow deleted from a computer sitting on the desk of Commissioner Sandie Egley last month, according to county officials.
The Beaver Countian obtained printed copies of bank statements from March 2014 maintained by the county showing the $1.2 million withdrawal, next to the entry is a handwritten note which says, “Beaver County Loan.”
Bank withdrawal slips obtained by the Beaver Countian as part of a Right-To-Know request show that Beaver County Treasurer Connie Javens made a unilateral withdrawal from a PNC Bank account in the amount of $270,000 on March 12th 2014, the same day records show LaValle unilaterally withdrew the $1.2 million from Citizens Bank as part of the “loan.” This publication has been unable to determine whether or not those funds were also part of a “loan” or “cash advance.”
All totaled the withdrawal slips obtained by the Beaver Countian spanning more than a year and a half show more than $6 million dollars has been unilaterally withdrawn from four county accounts for Friendship Ridge. Beaver County Controller David Rossi has said none of the transactions had been recorded in the county’s financial management system. None of the county officials that spoke with the Beaver Countian as part of its investigation could explain why the county continued to collect and disburse funds on behalf of Friendship Ridge long after the sale of the facility was finalized in March of 2014.
At a recent meeting between county officials and the Pittsburgh law firm of Clark Hill, attorneys notified the new Board of Commissioners that they had been ordered by former County Solicitor Bernie Rabik (who in turn said he was acting at the direction of the prior Board of Commissioners) to cease their investigation into alleged underpayments and financial improprieties involving the sale of Friendship Ridge until after last year’s county elections. According to multiple sources who were in the meeting, attorneys for Clark Hill also told officials they believed Vince LaValle had mischaracterized the $1.2 million he paid to Comprehensive Healthcare Management Services as a “loan,” but did not provide further elaboration.
Both Vince LaValle and Connie Javens have previously said they will not be publicly commenting for the Beaver Countian’s reporting on this matter. Representatives of Friendship Ridge have also previously declined comment for the Beaver Countian’s reporting.
Excerpt From The Sales Agreement Pointed To By Ricardo Luckow:
Read The Sales Agreements In Full: