© 2023 Kansas City Public Radio
NPR in Kansas City
Play Live Radio
Next Up:
Available On Air Stations

Executives At A Missouri Health Nonprofit Bribed Public Officials, Court Documents Say

Preferred Family Healthcare
Preferred Family Healthcare's location in Olathe, Kansas.

Top executives of a Missouri nonprofit bribed and organized fundraisers for  Missouri and Arkansas politicians as part of a wide-ranging conspiracy to loot the company for their personal benefit, according to court documents filed last week.  

The nonprofit, Springfield-based Preferred Family Healthcare, directed an employee to organize fundraisers for “several candidates running for seats in the Missouri State Senate, Missouri House of Representatives and the Greene County Commission,” according to the documents.

Preferred Family Healthcare provides mental and behavioral health services, and operates scores of locations in Missouri, Kansas, Arkansas, Oklahoma and Illinois. In the Kansas City area, it provides substance use disorder services at facilities in Liberty and Olathe as well as a residential adolescent program in Kansas City. It also provides support services for individuals with developmental disabilities at facilities in Kansas City and Gladstone.

The documents do not identify the politicians. But they allege Preferred Family Healthcare executives “gave things of value to numerous public officials, in exchange for their official actions benefitting the Charity (Preferred Family Healthcare) and themselves personally.”

Those things of value included tickets to sporting events; hotel accommodations; use of the nonprofit’s luxury and recreational real estate; hiring public officials and their family members as employees; and disguising bribes as contract payments for consulting, training and legal services.

One of the fundraisers, which is said to have taken place in 2010, is described as being held for “‘Missouri Senator B,’ who was then a candidate for the Missouri State Senate.” Another fundraiser, which is said to have taken place in 2012, is described as being held for “Missouri Representative A,” who was a candidate for the Missouri State Senate.

As a 501(c)(3) organization, Preferred Family Healthcare is prohibited by the IRS from participating in campaigns for or against political candidates for public office.

The disclosures surfaced in court documents filed last week after Keith Fraser Noble, Preferred Family Healthcare’s former chief clinical officer, pleaded guilty to one count of concealing knowledge of a felony.

Noble, a psychologist, was a consultant for Preferred Family Healthcare before joining it in 1994 and becoming its chief clinical officer in 2015. According to his plea agreement, he was aware of but failed to report a scheme by top executives to divert millions of dollars from the nonprofit to enrich themselves.

The majority of Preferred Family Healthcare's revenues come from federal sources, primarily Medicaid. In 2015, the last year for which its tax filings are available, it grossed nearly $182 million. Over the decade from 2006 to 2016, its total revenues exceeded $1 billion, according to the criminal charges against Noble.

The nonprofit has been the focus of a years-long federal probe of corruption in Missouri, Arkansas and elsewhere that has yielded several indictments and convictions.  

Milton 'Rusty' Cranford of Arkansas pleaded guilty to one count of bribery in June.

In Arkansas, a former lobbyist for the nonprofit, Milton “Rusty” Cranford, pleaded guilty in June to one count of bribery, admitting he paid bribes to at least three Arkansas legislators. One of the legislators, Rep. Hank Wilkins, a Pine Bluff Democrat, pleaded guilty in April, and a jury convicted a second, Sen. Jon Woods, a Springdale Republican, in May. The third, Sen. Jeremy Hutchinson, a Little Rock Republican, was indicted in August on 12 felony counts related to campaign finance reporting and false income tax returns, according to the Arkansas Democrat-Gazette.

Noble’s plea agreement refers to top company executives only as Person #1, Person #2 and Person #3. But according to the Democrat-Gazette, other court records and trial testimony identify them as Tom Goss, the company’s chief financial officer; Goss’s wife, Bontiea Goss, its chief operating officer; and Marilyn Nolan, its chief executive officer.

None of them have been charged.  

A spokesman for Preferred Family Healthcare, Reginald McElhannon, said in an email that the nonprofit is the product of a 2015 merger between Alternative Opportunities, based in Springfield, and Preferred Family Healthcare, based in Kirksville. The combined companies retained the Preferred Family Healthcare name.

McElhannon said all of the charged or convicted individuals were associated with Alternative Opportunities and are no longer with the nonprofit.

“Preferred Family Healthcare itself is not a subject of the investigation,” McElhannon said. “The current leadership has worked cooperatively with all federal and state authorities on all matters pertaining to the various investigations relating to these leaders and employees whose origins were with Alternative Opportunities.”

David Ketchmark, a prosecutor in the U.S. Attorney’s Office in Kansas City, said he could not provide information beyond what's contained in Noble’s guilty plea and other court documents.

Asked if additional individuals will be charged, he said he could not comment.

“The documents will have to speak for themselves in that regard,” he said. “I really can’t comment on anything outside of what we put in the public documents as it relates specifically to Mr. Noble. And in terms of whether or not there are any additional or ongoing investigations, I’m not at liberty to say anything.”

In his plea, Noble admitted he knew that three other Preferred Family Healthcare executives conspired with one another to divert millions of dollars. He also admitted that he helped conceal their crimes by preparing federal grant applications falsely certifying the nonprofit’s compliance with federal restrictions on lobbying.  

The criminal complaint against Noble, who pulled down nearly $445,000 in compensation in 2016, says that the alleged conspirators embezzled or misapplied funds totaling more than $30 million. Noble admitted his share of the money came to $4.3 million, which he has agreed to pay in restitution.

Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies.

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
KCUR serves the Kansas City region with breaking news and powerful storytelling.
Your donation helps make nonprofit journalism available for everyone.