Sept. 27, 2008 — Though Rodney Miller lost a motion in V.I. Superior Court this week to lift a temporary freeze of his assets, he did receive a continuance on a contempt-of-court order.
Miller and his attorneys were to appear Tuesday at a show-cause hearing before V.I. Superior Court Judge James Carroll III to explain the withdrawal of $1.2 million from a frozen account.
Miller had also asked the V.I. Supreme Court for a stay on the contempt proceedings. The high court rejected the motion, saying the former Schneider Regional Medical Center president and chief executive officer did not follow proper procedures with the lower court. However, that ruling became moot after Carroll's action.
Carroll granted the defense motion for a continuance of the show-cause hearing. Carroll had scheduled a hearing for Tuesday for Miller and his attorneys, Charles J. Grant of Grant and Lebowitz, a Philadelphia firm, and William J. Glore of Dudley, Clark and Chan of St. Thomas, to show why they should not be held in contempt of court for the withdrawal, when they knew the assets were frozen. The funds were wire transferred to Miller's mother, wife and attorneys.
Carroll granted a continuance to Oct. 24 to allow time for Warren B. Cole of Hunter, Cole and Bennett, an attorney Grant and Glore hired to defend them, to prepare his case. Cole is based on St. Croix.
On Aug. 5 Carroll issued a 60-day temporary restraining order on the assets of SRMC executives Miller, Amos Carty and Peter Najawicz. He granted the TRO based on the possibility that Miller, Carty and Najawicz's assets could be subject to forfeiture if any of the three should be charged and convicted under a section of the V.I. Code called the Criminally Influenced and Corrupt Organizations Act (CICO).
No criminal charges have been filed yet against Najawicz and Carty, but "they are coming shortly," said Assistant Attorney General Denise George-Counts on Friday. The one criminal charge against Miller contends that he tried to cover up a 1996 criminal conviction by providing false statements to the government on his employment application at SRMC. (See "Former Hospital CEO Arrested on Fraud Charge.")
In the motion requesting show-cause hearing, prosecutors say Miller drained $1.2 million from an account at the Pentagon Federal Credit Union in Alexandria, Va. Miller and his attorneys were aware of the 60-day TRO, the document says.
"However," the motion says, "Miller, in what could only be described as a wanton disregard and sheer contempt of this court's order," electronically transferred the funds.
Court documents show the following transfers:
— Aug. 8: $100,000 to a bank account of Thelma Lockett, Miller's mother;
— Aug. 18: $160,000 to the law firm Grant and Lebowicz. Charles J. Grant is Miller's attorney. He hasn't yet entered a notice of appearance in the case, to the Source's knowledge;
— Aug. 18: $150,000 to Dudley Clark and Chan, Miller's attorneys;
— Aug. 21: $75,000 to Dudley Clark and Chan;
— Aug. 21: $15,000 to Akerman, Senterfitt and Eidson, a Florida law firm; and
— Sept. 2: $650,000 to a bank account of Ronica Miller, Miller's wife.
"The credit union honored this court's TRO, and all of Miller's accounts were restrained, but due to an apparent oversight by persons responsible for recording the TRO internally at the credit union," Miller was able to make the transfers, the document says.
Glore and Grant were "fully aware of the terms of this court's TRO, but they collectively received and accepted $385,000 in wire transfer from the restrained Pentagon Credit Union account … in direct contravention to the court's order."
The document says Glore and Grant "knew that Miller paid them from the restrained account, or purposefully engaged in willful blindness as to the source of the funds and in contempt and utter disregard for this court's order."
Earlier this week Carroll denied motions filed by Miller and Najawicz to vacate the 60-day court order freezing their assets. The TRO was a result of an ongoing investigation of the SRMC financial matters, which so far have resulted in Najawicz and Amos Carty, SRMC's chief executive officer, being fired by the V.I. Hospitals and Health Facilities Corp. (See "Hospital Board Fires Carty and Najawicz.")
In his opinion denying the motion, Carroll wrote that the government had shown sufficient cause to justify the restraining order. Miller had contended that the TRO is unconstitutional because it violates the "due process" clause. Carroll wrote that Miller and Najawicz have made no hardship arguments.
Carroll concludes that the court moved properly for a pre-indictment to preserve the reachability of "certain assets obtained by Miller and Najawicz with funds allegedly obtained through unlawful activity." The two have "failed to provide satisfactory justification as to why the TRO should be vacated."
Carty, who is represented by Michael Quinn of Dudley, Topper and Feuerzeig, has reached a stipulated agreement allowing him limited access to a Banco Popular account held jointly in the names of Carty and his wife. In light of that stipulation, all that is now before the court are the motions of Miller and Najawicz.
Attorney Robert L. King has been substituted this week to replace Michael Fitzsimmonds of Stryker, Duensing, Casner and Dollison to represent Najawicz. No reason for the change was given in the document. King said Friday that he was "catching up" on the case, and had no comment at this time.
None of the three former executives have admitted to any wrongdoing.
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