The previous owners who bankrupted Medical Park Hospital in Hope were sentenced this week to federal prison and ordered to pay $6,000,000 restitution for tax fraud during they years 2009-2012.
Kenneth Elser, United States Attorney for the Western District of Arkansas, announced James R. Cheek, age 68, of Waleska, Georgia and Herschel J. Breig, Sr., age 69, of Nixa, Missouri were sentenced this week on one count each of Failure to Collect or Pay Over Tax. Cheek and Breig were each sentenced to 36 months in federal prison followed by three years of supervised release and ordered to pay restitution of $6,000,000 between the two of them. Judge Susan O. Hickey presided over the sentencing hearings in the United States District court in Texarkana.
According to court records, Cheek and Breig were both responsible to collect, truthfully account for and pay over Medical Park’s payroll taxes to the IRS from 2009-2012. As the hospital’s executives, they reportedly failed to pay approximately $6,000,000 in payroll taxes during that time.
Cheek and Breig were indicted by a federal grand jury in July, 2015 and both pleaded guilty in September, 2016.
The bankrupted Medical Park Hospital was in danger of closing at the end of Cheek and Breig’s time as owners but remained open after Wadley Regional Medical Center in Texarkana purchased the facility and began operating it under their name.