Former Charity Executive Sentenced for Role in Bribery, Embezzlement Scheme

SPRINGFIELD –– A former executive of a Springfield, Missouri charity, who was also an Arkansas lobbyist, was sentenced in federal court today for his role in bribing Arkansas elected officials in a multi-million-dollar scheme, and then along with other charity executives, embezzling millions of dollars from the Springfield health care organization.

Milton Russell Cranford, aka “Rusty,” 58, of Rogers, Arkansas, was sentenced by U. S. District Judge Brian C. Wimes to seven years in federal prison without parole. The court also ordered Cranford to forfeit $3,726,589 to the government.

Cranford previously pleaded guilty to one count of federal program bribery.  Cranford was an executive at Preferred Family Healthcare Inc. (formerly known as Alternative Opportunities Inc.), a nonprofit corporation headquartered in Springfield, and oversaw the charity’s operations and lobbying efforts in the state of Arkansas. As part of his plea, Cranford previously admitted that he and other Preferred Family Healthcare executives paid bribes to Arkansas legislators, several of whom have pleaded guilty or been convicted separately, to provide favorable legislative action for Cranford, his clients, and Preferred Family Healthcare. In exchange for the bribes paid by Cranford, the officials, amongst other official acts, steered Arkansas General Improvement Fund (GIF) money to Preferred Family Healthcare and other Cranford clients; held up agency budgets; requested legislative audits; and sponsored, filed and voted for legislative bills that favored the charity and Cranford clients.

The additional income gained by Preferred Family Healthcare from Cranford’s bribes enabled Cranford and other charity executives, some of whom have either pleaded guilty or been charged separately for their role in the bribery and embezzlement scheme, to embezzle, steal, and unjustly enrich themselves at the expense of the charity, including, but not limited to, diverting charity funds to for-profit companies owned by the executives; engaging in an illegal kick-back scheme between Cranford and another charity executive; causing the charity to make rental payments to properties owned the executives; and causing the charity to lend significant funds to for-profit companies owned by other charity executives.

As a part of Cranford’s sentence, the court also ordered him to pay a forfeiture money judgment of $3,726,589 to the United States, including $17,989 in cash seized at the time of his arrest, and $95,034 held by his attorneys, which Cranford had agreed to pay over to the government.

The multi-district investigation was conducted by IRS-Criminal Investigation, the FBI, and the Offices of the Inspectors General from the Departments of Justice, Labor, and the Federal Deposit Insurance Corporation (FDIC). The case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich of the Western District of Missouri; Trial Attorney Marco A. Palmieri of the Criminal Division’s Public Integrity Section; Assistant U.S. Attorney Ben Wulff of the Western District of Arkansas; and Assistant U.S. Attorney Stephanie Mazzanti of the Eastern District of Arkansas.