Bribery scheme alleged
Ex-VA pharmacy chief accused of demanding money from contractor
09:15 PM CDT on Monday, June 7, 2004
By MATT STILES / The Dallas Morning News
The former director of a major regional pharmacy operated by the U.S. Department of Veterans Affairs has been arrested and charged with soliciting a bribe from a government contractor.
Federal authorities allege that Otis Jay Cooper of Rockwall, who directed the department's massive mail-out pharmacy in Lancaster, illegally demanded a portion of profits and one-third ownership of a Tennessee company that did business with the facility. He allegedly offered $1 for the stake.
Though the allegations don't involve the millions of prescriptions the facility ships each year to veterans across the Southwest, a department investigator expressed disappointment that a high-ranking official might make corrupt demands.
"It's certainly a major case," said Richard Erlichman, the agency's deputy assistant inspector for management and administration in Washington, D.C., whose office assisted the FBI with the case.
"It's a real breaking of the public's trust when you have someone in a position of responsibility that does something ? or is accused of doing something ? criminal like this," he said.
Mr. Cooper could not be reached for comment Monday, and it was unclear whether he has retained an attorney. As is their custom, federal prosecutors declined to comment on the case while it is pending in the courts.
A court document filed by FBI Agent Mark Fedders of Columbia, Tenn., states that authorities obtained audio recordings and videotapes of Mr. Cooper in what essentially was a shakedown scheme.
The recordings show Mr. Cooper demanding that the unidentified Murfreesboro, Tenn., corporation turn over a portion of its profits or lose money it expected to earn from a government contract, the complaint states.
The company helped an unidentified Ohio firm receive last June a more than $50 million employee-leasing contract with the pharmacy, which delivers millions of prescriptions annually to veterans in Texas, New Mexico and Arizona.
For its assistance, the Tennessee company expected to earn several hundred thousand dollars in profits over the life of the contract, court records show. Because the Tennessee company was unidentified, it is unclear how much it is worth, but Mr. Cooper could have gained at least tens of thousands of dollars from the one contract alone.
In January, according to the criminal complaint, Mr. Cooper sent a fax offering to buy a one-third stake in the Tennessee company for $1. At a meeting two days later, Mr. Cooper allegedly told company officials that if his request were denied, he would have the contract withdrawn, preventing them from profiting.
The complaint also states that the firm's employees contacted law enforcement, prompting the investigation.
Another man, James K. Clark of Coppell, is accused of aiding and abetting in the scheme. A criminal complaint states that, in a series of recorded conversations, he told company officials that Mr. Cooper was his partner. He also asked the company for paperwork that would grant him a share of the company.
He could not be reached for comment.
According to the complaint, in one recorded conversation May 14, Mr. Clark told a company owner that he would prevent the interference by Mr. Cooper only if the company granted him access to its Internet bank accounts.
Both men appeared May 26 in federal magistrate court in Dallas, though the case will be prosecuted in Nashville, Tenn. The complaint against the two was sealed from public view until Monday.
Veterans Affairs officials declined to discuss Mr. Cooper's employment status with the department in detail, saying only that he was on "annual leave," a status similar to vacation.
Jessica Jacobsen, a local Veterans Affairs spokeswoman, also declined to release how long Mr. Cooper had worked for the department, saying it would be made public only under the federal Freedom of Information Act.
Mr. Cooper's government rank indicates he was paid from $99,000 to $120,000 a year to run the facility.
Mr. Cooper's replacement at the pharmacy, acting director Ruth Skogsbakken, also declined to comment.
The department issued a written statement Monday afternoon in an effort to assure veterans that the charges weren't related to their prescriptions.
"The criminal complaint does not involve the quality and safety of medication distributed by the facility," said Michael Valentino, the department's chief consultant for pharmacy benefits management.
The facility, opened in 1995 on South Longhorn Drive, employs about 120 people. It is one of seven such automated pharmacies that process and mail more than 85 million prescription drug prescriptions to veterans across the country.
"This is a very quick and efficient way for veterans to receive their prescriptions," Ms. Jacobsen said.
E-mail
mstiles@dallasnews.com
6-9-04
Washington Post
Ex-VA Pharmacy Chief Arrested
The Associated Press
Tuesday, June 8, 2004; 6:50 AM
DALLAS - The former director of a major regional pharmacy operated by the U.S. Department of Veterans Affairs has been arrested and charged with soliciting a bribe from a government contractor.
Federal authorities accuse Otis Jay Cooper of illegally demanding part of the profits and one-third ownership of a Tennessee company that did business with the facility. Cooper allegedly offered the company $1 for the stake.
Cooper directed the department's massive mail-out pharmacy in Lancaster, which ships millions of prescriptions each year to veterans across the Southwest. It's one of seven such automated pharmacies in the nation.
A telephone number for Cooper, who no longer directs the facility, was unlisted and he could not be located for comment early Tuesday.
According to a court document filed by the FBI, Cooper demanded that the unidentified Murfreesboro, Tenn., corporation turn over a portion of its profits or lose money it expected to earn from a government contract.
Last June, the company helped an unidentified Ohio firm receive a more than $50 million employee-leasing contract with the pharmacy. The Tennessee company expected to earn several hundred thousand dollars in profits over the life of the contract for its assistance, court records show.
Cooper and an alleged accomplice appeared May 26 in federal magistrate court in Dallas, but the case will be prosecuted in Nashville, Tenn. The complaint against the two was sealed until Monday.
© 2004 The Associated Press
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