Last month, FBI agents raided the home of the CEO of a bankrupt hospital chain and one of its hospitals in Pennsylvania in new signs of trouble for a company central to accusations of influence-peddling by James Biden, brother of former Vice President Joe Biden.
The investigation was disclosed in documents filed this month by the acting U.S. trustee overseeing the bankruptcy case of Florida-based Americore Holdings, which is in the business of acquiring and managing rural hospitals.
Real Clear Investigations reported that the filing in Kentucky by the federal trustee, Paul A. Randolph, seeks the appointment of a trustee specifically to oversee the bankruptcy case, or otherwise the dismissal of the firm’s filing for Chapter 11 bankruptcy protection from creditors. It said the company’s CEO, Grant White, had “grossly mismanaged” his business; “has not operated the hospitals in a manner that is consistent with public safety”; and “improperly siphoned money from the Debtors for his personal benefit.”
The firm declared bankruptcy back in December. On Jan. 29, the court documents say, the FBI raided White’s home at an unspecified location and, the next day, one of its hospitals, Ellwood City Medical Center in Pennsylvania. One week later a Kentucky court granted a motion to remove White as CEO.
White didn’t respond to requests for comment and efforts to reach his company by phone were unsuccessful.
The federal trustee’s filing didn’t mention Joe Biden’s younger brother. This past summer, however, James Biden and White were named in a lawsuit alleging fraud, along with Biden’s partner, hedge fund manager Michael Lewitt. The lawsuit, filed by Tennessee businessman Michael Frey and his partner Dr. Mohannad Azzam, owners of Diverse Medical Management, also named Amer Rustom, another investor in Americore along with Biden and Lewitt.
The lawsuit alleges that James Biden had a prominent role in the company. One exhibit filed in the lawsuit is a photograph of an Americore business card that Biden reportedly handed out listing him as a “principal” in the company.
Frey alleges that when Diverse Medical Management and Americore were in talks to merge, Jim Biden promised to exploit his brother’s political influence as vice president to attract international investors and make the venture successful.
Lewitt is alleged to have alluded to the Vice President’s clout in a text message to Frey to calm the latter’s worry about legal liability to his firm over an acquisition: “Jim [Biden] told me. Don’t worry every time someone threatens to sue you, you are with us, now nobody is gonna touch you.” According to the lawsuit, “It was Frey’s understanding that Lewitt was implying that DMM [Diverse Medical Management] was ‘protected’ because of Jim Biden’s connections.”