Former Operators of Highland Medical Center Sentenced
The former operators of a Lubbock medical center will spend the next 5 years in prison.
The former operators of Highland Medical Center, 64-year-old Herschel A. Breig and 64-year-old James Cheek were each sentenced to 60 months in federal prison.
The two pleaded guilty in February 2012 to one count of failure to pay over payroll taxes and aiding and abetting.
Breig and Cheek were also ordered to each pay a fine of $10,000, and restitution of nearly $5,050,000 was ordered by the court as well. So far, the men have paid $120,000 in restitution to the individual victims under their plea agreement.
According to court documents, in March 2006, Breig and Cheek took control of Highland Medical Center following purchase of the facility by Shiloh Health Services. Cheek was Shiloh’s founder, executive officer, and president. Breig served as vice-president and secretary.
During that time, Brieg exercised control over HMC’s financial business affairs, including required payment of payroll taxes such as federal income taxes, Federal Insurance Contributions Act taxes, and Medicare taxes.
During 2006, 2007, and 2008, HMC withheld payroll taxes from the paychecks of employees, but made no payments to the IRS from December 2006 through May 2008.
This adds up quite quickly, as illustrated by the tax quarter from April 1st 2007 through June 30th, 2007, they failed to pay more than 337,000 in taxes owed to the IRS.
Both men are former residents of Lubbock, but currently reside in Springfield, Missouri. The case was prosecuted by the U.S. Attorney's Office in Lubbock.