Corporate Compliance

Former health center executive indicted on fraud charges

Compliance Monitor, October 19, 2005

A federal grand jury has returned an 11-count indictment against the former executive director of a community health center.

Fred Allen Swan, 63, of Springfield, MA, is past chief executive officer of the former Springfield Southwest Community Health Center, Inc. (SSCHC).

According to the indictment, Swan ran into financial trouble in 1997 and lost his house through foreclosure. Swan arranged for an individual to buy his house from the bank, hold it until he could recover financially, and then sell it back to him. Swan agreed to cover the monthly payments associated with the individual's purchase of the house. However, Swan did not honor that portion of the agreement and stopped making regular monthly payments shortly after the house was purchased by the individual.

Subsequently, Swan allegedly steered a series of SSCHC no-bid or rigged consulting and construction contracts to entities controlled by the individual. The total value of these fraudulent contracts equaled approximately $1 million.

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