Former Gulf Bend executive charged with misusing funds
March 18, 2017 at 11:03 p.m.
Updated March 18, 2017 at 11:10 p.m.
A former manager at the Crossroads' mental health authority is charged with misappropriating more than $300,000 in state money.
The Gulf Bend Center's former associate executive director, David Way, turned himself into the Victoria CountySheriff's Office on Thursday.
Robert Whitaker, Justice of the Peace for Precinct 3, set Way's bond at $50,000.
The charges are related to an $817,670 contract Gulf Bend received from the Department of State Health Services on Sept. 13, 2013.
The money was earmarked for opening and operating an extended observation unit. The unit was supposed to cut down on trips to state psychiatric hospitals by keeping patients with less severe mental health problems for up to 48 hours.
Gulf Bend leased a wing of Citizens Medical Center for the unlocked unit but never hired its own nurses and psychiatrists to staff it.
That's chief among the reasons Way is charged, District Attorney Stephen Tyler said.
Way attempted to mislead auditors about whether nurses or a psychiatrist worked at the unit when they came to inspect it in August 2014. And when the auditors ordered the unit closed, Way instructed employees to continue accepting patients, Tyler said, pointing to a 13-page report by the Office of Inspector General, or OIG, he filed in court.
That report concluded that from September 2013 to August 2014, Gulf Bend was overpaid $315,445.44 despite violating the state contract.
The OIG has worked to find that missing money.
While combing through the Gulf Bend's banking records in Victoria, the OIG found an account at another bank in Boston that was possibly related.
After some legal wrangling during the course of several months, the bank honored a subpoena for records, but nothing was found.
"If it was, then I would have charged him with theft," Tyler said about Way.
Tyler said the report reads a lot like one the OIG composed about Victoria Housing Authority several years ago because Gulf Bend, too, appears to have not had policies in 2014 that would guard against fraud.
One of the many people the OIG interviewed for this case was Madonna Coughenour, the chief nursing officer at Citizens.
She said Gulf Bend required Citizens nurses to sign in and out of the extended observation unit.
Tyler said that gave the appearance that Citizens nurses were tending to Gulf Bend patients at the unit, but Coughenour told the OIG they were not.
Tyler also was troubled by what the OIG found when interviewing Tim Serrano, the crisis team lead.
Serrano told the investigators no medication was prescribed at the unit, but if patients came in with medication, then staff, most with no higher than a high school diploma, would help the patients count the prescribed amount from the bottle and make sure they took it.
If those medications were controlled substances, only a licensed nurse would be able to administer them, Tyler said.
When contacted last week, Way, former executive director Don Polzin and board members denied witnessing any malfeasance at the unit or at Gulf Bend.
"I am a credentialed, corporate health care compliance professional, and corporate compliance and integrity programs are what I believe in," Way said. "I have full faith that the Gulf Bend Center and all of its agents, employees and board of trustees have done nothing but the best to steward the public dollar."
Way declined to comment further because he had just learned about the allegations.
According to his employment records, Way first applied for a job with Gulf Bend in 1992. Before that, he said, he worked for Victoria ISD as a teacher's assistant.
Way moved up the ranks, also serving as director of quality management and director of operations during his time at Gulf Bend, which was interrupted briefly from January to August 2011. He accepted a job then as the chief executive officer at the Padre Behavioral Hospital in Corpus Christi.
In June 2012, that hospital was sanctioned by the state for incomplete medical records and failing to provide a qualified dietitian. That investigation was conducted by the Department of State Health Services in June 2011 after a complaint, according to an article in the Corpus Christi Caller-Times, which makes no mention of Way and whether he played a role.
When he left Gulf Bend in 2011 for the Corpus Christi job, Way wrote in his exit interview: "Enjoyed working here? I did not work here. I lived Gulf Bend Center's mission. For the past 18 years, I can honestly say a day did not go by that I did not consider the Center."
Way's career with Gulf Bend ended in April 2015, the same month the board of trustees selected Jeff Tunnell as Polzin's successor.
Way was one of 50 applicants for the job. After he was not chosen, he elected to leave Gulf Bend, board chairman Steven Hipes said.
But, a letter from Tunnell dated April 14, 2015, indicated Way was terminated because his position had been eliminated.
When he left, Way had an annual salary of $113,564, having last received an about 10 percent raise approved by the board the year before.
Way received mostly glowing reviews during his years at Gulf Bend, but shortly before his termination, Polzin reprimanded him for trying to meet with other employees to discuss a wrongful termination lawsuit he and Gulf Bend were embroiled in, failing to show up at work on time and failing to provide the Jackson County Hospital District with tele-health services as promised.
Polzin and others said they were shocked by the allegations.
Polzin remembered the OIG coming unannounced to Gulf Bend to investigate in 2014 and 2015. He said the OIG never disclosed what it was investigating, and that caused some employees to feel uneasy as they went about their duties.
"They never did tell me or anybody if there was a person of significance that they were particularly interested in. They kept things very close to the chest," he said. "I worked with the man (Way) for 20 years, and I trusted him."
He said Way's job was not "easy, nor one that particularly wins you friends."
"You have to make tough decisions. I'm surprised, and I wish I could tell you more," Polzin said.
Both he and Gary Burns, a Victoria County commissioner who has served on Gulf Bend's board of trustees for more than a decade, said they hoped the allegations wouldn't overshadow Gulf Bend's good work in the 46 years it has existed.
"Our organization, I think, has always been credible and delivered on its mission the best we could, given the capacity and resources that we have, which were very limited," Polzin said.
Burns said he doubted the allegations were true and likened them to "slinging mud."
"My experience on the board has always been very positive and very upfront and just trying to do the best for our clients," Burns said.
Burns and others have participated in the Gulf Bend Community Collaborative in recent months. The collaborative is made up of representatives from law enforcement, the medical profession and nonprofits and is seeking $11.6 million from the state for a four-year plan to divert people with mental illness from Crossroads county jails.
Some former employees were not surprised by the allegations, though.
Three former employees sued Gulf Bend and Way in February 2015, claiming a violation of their free speech rights.
This came after the former employees were terminated, they say, for speaking up about the staff shortages at the extended observation unit and other improper behavior.
The lawsuit was settled in April 2016 with neither Gulf Bend nor Way admitting wrongdoing.
Another former Gulf Bend employee who was not a plaintiff in the February 2015 lawsuit, Daniel Rodriguez, said he resigned from Gulf Bend.
It seemed odd Gulf Bend did not hire a psychiatrist to work in the extended observation unit after receiving a significant amount of money from the state to open it, he said.
Rodriguez remembered Gulf Bend's upper management stating it was too expensive to hire a psychiatrist for that purpose.
"It's expensive, yes, but not that expensive," Rodriguez said.
Perhaps, he said, those employees who spoke up and were terminated because of it have now been vindicated.
Tyler hoped the truth would come out after a jury of 12 of Way's peers heard all the evidence at trial.
Way has hired Tali Villafranca to defend him from being convicted of the first-degree felony, which carries a punishment of five to 99 years or life in prison.
"I think you can clearly say there's some smoke on the horizon," Tyler said. "Maybe there's a fire, maybe there's not, but there's definitely some smoke."