Pennsylvania Seeking Medical Supplies From Hospital Driven Into Financial Ruin by Venture Linked to Biden's Brother

James Jill Joe
James, Jill, and Joe Biden / Getty Images
April 9, 2020

Pennsylvania officials are seeking access to critical medical supplies and equipment from an abandoned rural hospital at the center of a fraud scandal involving Joe Biden's brother, James Biden.

Ellwood City Medical Center in Pennsylvania, which is currently controlled by a court-appointed bankruptcy trustee, was one of a string of rural hospitals owned by and driven into financial ruin by Americore Health, a business venture linked to James Biden.

In late January, FBI officials raided the Ellwood City Medical Center and the home of Americore CEO Grant White as part of an ongoing criminal investigation, according to court records.

Local officials said the bankrupt Ellwood City hospital, which was shuttered by the Department of Health in November due to public safety risks, could be reopened to treat an influx of patients due to the COVID-19 crisis. They said it could also have unused personal protection equipment, ventilators, and other medical supplies that are needed for the state's coronavirus response efforts. But city and county officials said they are not legally allowed to access the building because they don't own the property.

The Pennsylvania Emergency Management Agency has been considering whether to designate the facility as part of its coronavirus response efforts. But the agency is "still in the deciding process," an aide at state representative Aaron Bernstine's office told the Washington Free Beacon on Wednesday.

PEMA directed questions to the Pennsylvania Department of Health, which told the Free Beacon that no decision has been made yet.

"The Department of Health, working with the Pennsylvania Emergency Management Agency, is evaluating the need for alternate care sites in the midst of COVID-19," said spokesman Nate Wardle. "We are continuing to look at potential alternate care sites as well, whether it be those that are federally assisted, using ambulatory surgical facilities, or other options as we move forward and determine whether our capacity is sufficient. So far, 40 percent of our ICU beds are still available for use."

The Army Corps of Engineers inspected the hospital on March 30 and could be brought in to prepare the facility if it is reopened, according to the Ellwood City Ledger.

Ellwood City mayor Anthony Court told the paper that he hoped this would lead to the city's sole hospital being reopened permanently.

"I believe this is a major move toward the Ellwood City Medical Center opening up permanently," he said.

The Ellwood City Medical Center was purchased by Americore Health in 2017. Although the facility had reportedly been losing money for decades, its financial woes were increased by Americore's mismanagement, according to the Pennsylvania attorney general's office. The state is currently suing the company for failing to uphold contractual obligations for managing the hospital.

James Biden has been identified in news reports and court filings as a principal figure at Americore, although his official role at the company remains unclear. Biden has denied in court records that he "has or had any ownership or financial interest in Americore."

But numerous individuals who did business with the company have identified Biden as a key player. Former executives told Politico that Biden helped raise money for the business and had an office at Americore's headquarters. Biden's business card also identified him as "Principal" at Americore Health, according to a copy that was submitted as part of another civil lawsuit against the company in Tennessee.

Ellwood City mayor Court told CBSN Pittsburgh that the company's CEO, White, often referenced Biden's involvement during negotiations to purchase the hospital.

"I think he would throw the name out there to make everything more legitimate," Court told the news outlet.

Last summer, two health care providers sued White, James Biden, and other Americore Health principals for allegedly defrauding them by falsely promising to secure funding for their companies while stealing their business models.

The health care providers, Azzam Medical Services and Diverse Medical Management, dropped their claims against White in February after he supposedly gave them information that showed he was also duped by Biden and the other defendants.

The companies claimed they reached an out-of-court settlement with White after he turned over "voluminous electronic evidence exonerating him" and "demonstrating that he too was a victim of the fraudulent actions of Defendants James Biden, Amer Rustom, Michael Lewitt, and Platinum Group USA, Inc." This allegedly included "documents indicating that millions of dollars in funds may have been taken by these defendants outside of the ordinary course of business."

The court filing claimed that Azzam Medical Services and Diverse Medical Management would be filing an amended complaint "in the coming weeks" with more details on these allegations. The companies have yet to file this amendment.

Paul A. Randolph, acting U.S. trustee, said in bankruptcy court that White "grossly mismanaged" Ellwood City Medical Center and St. Alexius Hospital in St. Louis.

White engaged in "fraud, dishonesty, incompetence, and gross mismanagement, as well as other actions that demand an independent trustee," said Randolph in a Feb. 4 court filing asking the judge to appoint an independent trustee in U.S. Bankruptcy Court in the Eastern District of Kentucky.

Around 450 employees at Ellwood City Medical Center were laid off after it shut down in December, according to CBSN Pittsburgh. In the preceding months, the center had fallen into financial insolvency: Creditors repossessed medical equipment, paychecks were withheld due to budget constraints, and management was using tarps to patch holes in the roof.

The Pennsylvania Department of Health first barred the hospital from seeing inpatients on Nov. 27, 2019, when it designated the facility an "Immediate Jeopardy" case that threatened public safety, according to department health inspection records.

The department said the hospital "was not providing Radiology Services, specifically CT and MRI Services, presenting safety concerns for inpatients and patients seeking treatment within the Emergency Department."

A subsequent investigation "revealed the facility did not have an annual operating budget," failed to maintain adequate medical records, and was unable to issue paychecks to staff in November due to budget shortfalls. Inspectors also found expired medications in circulation and broken radiology machines and said vital surgical equipment had been repossessed for lack of payment.

Ellwood City Medical Center officially forfeited its license Jan. 29. The court-appointed trustee said White's home was raided by the FBI that day, and the hospital was raided the next as part of an unspecified criminal investigation.