Feds seize phones of former Steward CEO, top exec

Federal officials detained former Dallas-based Steward Health Care CEO Ralph de la Torre the week of Nov. 18 to execute a search warrant and seize his phone as part of an ongoing investigation, The Boston Globe reported Nov. 25. 

Federal officials also recently seized the phone of Armin Ernst, head of Steward's international operations, the Globe reported.

"On a scale of 1 to 10, this action by federal authorities brings the Steward scandal to an 11," Douglas Chia, president of Soundboard Governance LLC and a senior fellow at the Center for Corporate Law and Governance at Rutgers Law School, told the Globe.

Steward sought Chapter 11 protection on May 6 and has since shed the majority of its 31 hospitals. In July, CBS News reported that the company was under criminal investigation by the Department of Justice.

Dr. de la Torre "amicably separated" from Steward on Oct. 1, on the heels of a unanimous Sept. 25 Senate vote to hold him in contempt for skipping a Health, Education, Labor and Pensions Committee hearing that he had been subpoenaed to attend. Dr. de la Torre then sued the HELP committee on Sept. 30 and its members in federal court, alleging their actions were unconstitutional retaliation for him invoking his right to not testify under the Fifth Amendment. 

The probe comes after John Boehner, former U.S. House Speaker and Steward board member, testified in mid-November to a federal grand jury in Boston regarding corruption, bribery and potential fraud within the for-profit health system. 

While neither Dr. de la Torre or Mr. Ernst has been charged in the U.S. with a crime, they are both at the center of an unfolding criminal corruption case in Malta, where Steward executives allegedly bribed government officials. 

Federal officials must have credible evidence to present to a magistrate judge that a specific crime occurred, along with probable cause that crime evidence would be located on a seized phone. Federal officials have also been talking with other Steward top executives, the Globe reported. 

"This [search warrant] makes it more likely to me that the prosecutors think that [Dr. de la Torre] is a participant in a crime" not a bystander, Mitchell Epner, a former federal prosecutor in New Jersey, told theGlobe. "Very often in a situation like this, the underlings have already been contacted."

The Globe's Spotlight Team has reported multiple instances where Dr. de la Torre allegedly used Steward's funds for personal expenses, like a private jet for friends, a donation to his children's school and a Madrid apartment while Steward dealt with patient care risks and mounting vendor bills. It was also revealed in February that Dr. de la Torre owned two yachts, valued at $40 million and $15 million, respectively. 

Becker's has reached out to Steward for comment and will update this story should more information become available. 




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