Former Owner of Edgewater Medical Center Sentenced to 21 Months for Willfully Impeding Efforts to Collect $188 Million in Civil Judgments
CHICAGO - October 14, 2015 - The former owner of Edgewater Medical Center on Chicago’s North Side was sentenced today to 21 months in federal prison for his efforts to thwart collection of more than $188 million in civil judgments.
PETER G. ROGAN lied in a federal affidavit when he denied controlling millions of dollars in a trust account in the Bahamas. He also willfully violated multiple court orders as part of a decades-long effort to protect his offshore assets from judgment creditors who had obtained more than $188 million in combined civil judgments arising from fraud during Rogan’s tenure as CEO of the now-shuttered medical center.
Rogan, 69, formerly of Valparaiso, Ind., pleaded guilty last month to one count of perjury. In addition to the 21-month prison term, U.S. District Judge Harry D. Leinenweber ordered Rogan to comply with all outstanding court orders, including orders relating to discovery and financial obligations.
“The defendant’s conduct was abundantly contemptuous and lucrative, as well as exceedingly difficult to detect, investigate, and prosecute,” Assistant U.S. Attorney Andrew S. Boutros argued in the government’s sentencing memorandum. The defendant “substantially interfered with the administration of justice.”
Rogan once owned Edgewater Medical Center and later sold it, but he continued to manage the facility through various companies he owned. The hospital, located at 5700 N. Ashland Ave., closed in 2001 a.m.id a criminal investigation that resulted in the healthcare fraud convictions of a Rogan-owned management company, a hospital administrator and several doctors, the latter of whom performed medically unnecessary surgical procedures and treatments on unsuspecting patients.
In 2006, the United States obtained a civil judgment of $64,259,032 against Rogan for his role in Edgewater’s submission of false claims for reimbursement under the Medicare program. The following year, Dexia Crédit Local, a bank that extended credit financing to the hospital, was awarded a $124 million default judgment in a separate civil fraud suit against Rogan and his companies.
In the course of their respective proceedings against Rogan, the United States and Dexia discovered that Rogan’s Bahamian trust account was being used to hold millions of dollars in secret offshore assets. Rogan had created the trust with the help of FREDERICK M. CUPPY, an Indiana attorney, as well as another attorney described in the indictment as “Florida Lawyer.” Cuppy, formerly of Valparaiso, Ind., and now of Fort Lauderdale, Fla., pleaded guilty to a perjury charge before Judge Leinenweber. He was sentenced in 2013 to one year and a day in prison.
On Dec. 21, 2006, Rogan responded to the government’s collection efforts by filing an affidavit with the Court in which he denied that he exercised control over assets in the trust account. Rogan admitted in a plea agreement that this statement was false and misleading. Rogan also admitted that he willfully and wrongfully violated several court orders in the Dexia litigation, including lying and causing his attorneys to lie to the Court about his control over his offshore trust.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Mr. Boutros and Assistant United States Attorneys Daniel W. Gillogly, Eric S. Pruitt and Joseph A. Stewart.
U.S. Attorney’s Office
Northern District of Illinois
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