CHARLOTTE, NC (Cassie Cope/ The Charlotte Observer - Saying Cardinal Innovations "acted unlawfully" in giving its ousted CEO $1.7 million in severance, the State Department of Health and Human Services is taking over the Charlotte-based agency.
The state DHHS also fired the board that gave a total of $3.8 million in severance to CEO Richard Topping and three other departing managers.
"DHHS staff will be on site at Cardinal Innovations and will work closely with interim CEO, Trey Sutten, and other Cardinal staff to manage and stabilize the organization, hire additional executive team members, and develop a corrective action plan to bring Cardinal into compliance with all applicable laws," HHS Secretary Mandy Cohen wrote in a letter to lawmakers on Monday.
Cardinal most recently came under fire for a $1.7 million severance package to outgoing Topping, whose last day was set to be Friday.
"Executive leadership who are in the process of leaving the organization (including former CEO Richard Topping) will not be permitted on the premises of Cardinal during this time," Cohen wrote.
In October, the state Health and Human Services agency's Office of the Internal Auditor released a 17-page report that criticized Cardinal's severance packages for being offered for longer than similar entities and offering severance pay to 10 employees other than the CEO.
The review found that four of seven similar quasi-government groups, including Cardinal, offer severance packages. Three do not offer payouts at all.