Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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Former Executives of Coast Rehabilitation Services Convicted of Tax Evasion Connected to Work at CRS

January 11, 2002

Oregon Attorney General Hardy Myers today announced that two former executives of Coast Rehabilitation Services (CRS), a non-profit organization that runs a chain of group homes for the developmentally disabled in Clatsop and Multnomah County, were convicted of tax evasion connected to their employment with CRS.

Mark Terranova, formerly the executive director of CRS, and Kay McGuire, a former senior manager, both pled guilty to one count of state tax evasion for failure to report income Terranova derived from "consulting" for McGuire's competitor corporation, Horizon's Unlimited, Inc. Pro Tem Judge Franco Ferrua sentenced Terranova to 18 months of probation, 720 hours of community service and $6,500 restitution to State Medicaid Programs. McGuire was sentenced to 18 months of probation, 300 hours of community service and $8,000 restitution.

"This criminal plea was just one component of a global settlement," Myers said. "It sends a clear message that the integrity of tax-supported programs will be rigorously defended by the state."

Today's hearing brings an end to protracted litigation initially centered on allegations of fiscal misappropriation by the defendants, including billing of personal expenses to the non-profit organization. As part of the negotiated plea bargain, both defendants entered into an injunction restricting their ability to serve in a fiduciary capacity for a registered non-profit organization without notice to and consent by the Oregon Department of Justice. Defendants further agreed to consent to exclusion from participating as a provider in any and all federal health care programs; the exclusion will be processed and placed in a nationwide data bank by the United States Department of Health and Human Services Office of Inspector General.

The case was investigated by the Justice Medicaid Fraud Control Unit with assistance from the Justice Charitable Activities Section. The case was prosecuted by attorneys from the Medicaid Fraud Unit under the auspices of the Clatsop County District Attorney's Office. MFU attorneys received support from the Office of Counsel for DHHS-OIG in processing the federal exclusion.

Contact:

Ellyn Sternfield, Attorney in Charge, Department of Justice Medicaid Fraud Unit, (503) 229-5725 x241 |
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