The federal government will seize more than $292,000 controlled by a company that pleaded guilty to fraud charges linked to efforts to save the now-closed Monsour Medical Center, according to court documents.
The money is in a bank account used by Sacks Medical Corp. to purchase discounted prescription medications through the Jeannette medical center and then illegally resell the drugs, court records show. The financially troubled hospital closed in 2006.
Earlier this year, Sacks Medical Corp. pleaded guilty to wire fraud and money laundering charges and was ordered to pay a $500,000 fine and forfeit $500,000 in funds earned through the drug sales.
According to the forfeiture motion, Sacks created a company, the Monsour Medical Center Research Institute, with the aid of the late Dr. Alexander Kavic, who was Monsour's director of emergency medicine in 2004 and 2005.
More than $2 million in wire transfers were made by Sacks officials, who in turn funneled $1.7 million to the research institute, which conducted no legitimate research, according to prosecutors.
The drug sales violated the federal Prescription Drug Marketing Act, which specifies the drugs could be used only in a hospital environment, records indicate.
Monsour was on the brink of financial collapse when the illegal sales began.
According to prosecutors, Kavic took part in the scheme to raise money to keep the hospital from closing.
