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Bedford man gets 10 years in nursing home fraud

FORT WORTH -- Stephen Michael Ewing, a Bedford man convicted on 27 counts in a wide-ranging nursing-home-fraud case, was sentenced Wednesday morning by U.S. District Judge Terry Means to 10 years in federal prison.

Ewing, 61, also known as Stephen Michaels, also was ordered to pay $11.6 million in restitution, to be distributed to Medicaid and Medicare. He is to surrender to federal prison by 2 p.m. Aug. 25. Upon release, he will be on supervised release restrictions for three years.

During sentencing, Ewing, wearing a business suit, said nothing.

Prosecutors said that between August 1999 and May 2004 Ewing and two other North Texas men bilked the U.S. government out of $34 million in taxes by creating dozens of fake companies to divert money derived from 70 nursing homes in Texas, Iowa, Kansas, Virginia and Oklahoma, including the withholding taxes of about 4,500 employees. (At the height of their operations they were licensed for about 6,000 patient beds.)

At the time, Ewing’s conspirators — Gary R. Trebert of Frisco and Larry Gordon May of Hurst — cooperated with federal authorities. Both pleaded guilty to two counts.

The scheme

According to court documents, Trebert, Ewing and May began acquiring control of nursing homes in 1999. As part of their conspiracy to defraud the government of employees’ withheld payroll taxes, the men created 150 “sham staffing/payroll entities” with business addresses in Europe. May would travel to England and mail false tax returns to the United States.

According to court testimony, Trebert, an attorney, gave legal advice and helped acquire nursing homes. Ewing oversaw operations and finances. May was a figurehead who was listed as president of the corporations. Ewing and Trebert often hid their involvement, and May’s defense attorney argued during his April sentencing that his client was a patsy for the others.

By 2004, Ewing and May had gone to federal agents. (Ewing’s attorney said he had removed himself from the conspiracy as early as December 2003.) In 2005, the state seized operations of 13 nursing homes from Foremost Care, which state documents indicate were being operated in the names of Ewing’s wife and May’s mother.

The trial

In March, it took a federal jury one hour of deliberations to find Ewing guilty on 27 counts -- one count of conspiracy, seven counts of tax evasion, five counts of mail fraud, seven counts of making false statements to government agencies and seven counts of making false statements regarding health care. He was taken into custody at that time.

Both Trebert and May testified against Ewing. (In addition, federal prosecutors presented evidence that indicated the defendants lived high on the hog. During the time of the scheme, Ewing had spent more than $2.5 million of diverted money, including more than $200,000 at department stores such as Saks Fifth Avenue, and more than $250,000 on automobiles.)

The others

In April, May wept as he was given a 4-year sentence by Means. May, 49, formerly of Hurst, is listed by the Bureau of Prisons as being at a federal facility in Oklahoma City. He is scheduled to be released in November 2011.

In February, Trebert, 51, of Plano, pleaded guilty to two counts out of the 29-count indictment. He is scheduled to be sentenced by Means on Aug. 11.