UMC's Lacy Thomas Fired, Criminal Probe Ongoing - 8 News NOW

George Knapp, Investigative Reporter

UMC's Lacy Thomas Fired, Criminal Probe Ongoing

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Metro intelligence detectives swarmed into University Medical Center Tuesday morning brandishing a search warrant and demanding to see documents.

At the same time police were searching his office, hospital Chief Executive Officer Lacy Thomas was delivering the bad news about the money and was promptly fired by the county commission.

The Channel 8 I-Team had the only TV camera on the scene when detectives emerged with a mountain of documents pertaining to suspicious contracts. George Knapp has the exclusive details.

In 2005, University Medical Center honcho Lacy Thomas took a trip to St. Thomas in the Virgin Islands, supposedly to talk business with Superior Consulting, also known as ACS, a company from his old hometown of Chicago. Metro police suspect the company picked up the tab for Thomas' weeklong fact finding trip. When Thomas returned from the beach, he told UMC staff members he intended to award a professional services contract to Superior Consulting so they could help UMC collect its outstanding debts.

Thomas did not mention that he is a personal friend of the top executive at Superior Consulting. The company ended up earning more than $1 million from UMC, even though it collected less money than the hospital had collected without its help.

That's the kind of suspicious business deal that led Metro detectives to serve a criminal search warrant on UMC. They hauled out box after box of financial documents and later carted away computers seized from the office of Lacy Thomas and from the offices of his handpicked aides, some of whom followed him from Chicago.

For the past two months, police have been gathering documents and interviewing former UMC managers. The picture they've stitched together is not pretty. In all, their suspicions focus on seven Chicago-based companies; some owned by former fraternity brothers of Lacy Thomas, and who received contracts when Thomas ran the finances at a Chicago hospital.

Witnesses told Metro that Thomas personally awarded the contracts, that he bypassed normal procedures, that he found creative ways to inflate the dollar value of those deals, and that he kept most of this information from ever landing on the desks of county officials.

Frasier Systems Group, for instance, is owned by a former fraternity brother of Thomas whose office is in the Chicago home where he lives with his mother. The consulting contract was only to be for a few thousand dollars, but police believe UMC paid Frasier $660,000. The consultant reportedly made only one visit to UMC and never submitted a finished work product.

Former financial officers say that even though UMC was millions of dollars behind in paying the bills to vendors such as the company that supplies its medicine, Lacy Thomas ordered UMC staff to make sure the Chicago companies were paid first, even though other vendors had been waiting for payment far longer.

Metro is hoping to speak with anyone who has information about this case, or about any of the contracts that were awarded under unusual circumstances.

Email your comments to Investigative Reporter George Knapp.

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