Ousted Cardinal leaders tried to keep control of taxpayer money, state attorney says

Ousted Cardinal leaders tried to keep control of taxpayer money, state attorney says

CHARLOTTE, NC (Cassie Cope and Fred Clasen-Kelly/The Charlotte Observer) - Cardinal Innovations' ousted CEO and other former leaders tried to keep control of taxpayer money before the state took over the Charlotte-based mental health agency, the state Attorney General's office said Wednesday.

Special Deputy Attorney General Michael Wood told a judge that former CEO Richard Topping and two former board members traded emails over the weekend that suggest they had a plan to keep agency money from the state.

The emails were released in a court filing Wednesday when a judge granted a temporary restraining order against Topping and 11 former board members.

In one email that Topping sent Sunday, he told ousted board chair Lucy Drake that officials had agreed to take action before "the state raids - whether legal or not - the fund balance."

"If the money is gone, they have to chase it," Topping wrote. "Since they don't have a legal right to it, they'll never get it."

Superior Court Judge Todd Pomeroy approved the temporary restraining order against Topping and former board members that will prevent them from interfering with the N.C. Department of Health and Human Services takeover or have access to Cardinal coffers.

After citing the email chain between Topping and the former board members, Wood told the judge the restraining order was needed to protect public money.

"This sounds like insiders between the board and the company worried about the state coming in, as we've done, and doing something with funds in Cardinal accounts before the state could get to them," Wood said.

Wood refused an interview request after the hearing, saying he was not authorized to speak to the press.

Topping has not returned several calls since Tuesday.

DHHS said in a statement Wednesday that the agency pursued the restraining order "out of an abundance of caution in the protection of taxpayer dollars."

On Monday, DHHS took over Cardinal, saying Cardinal "acted unlawfully" in giving its ousted CEO $1.7 million in severance. DHHS is also demanding Cardinal repay a total of $3.8 million from administrative accounts for the severance it paid four outgoing officials.

Cardinal has been under scrutiny for spending on CEO pay, large severance packages, as well as on lavish Christmas parties and board retreats, charter flights for executives and "questionable" credit card purchases, including alcohol.

Known as Local Management Entity/Managed Care Organizations, Cardinal contracts with DHHS to manage treatment networks for mental health, developmental disabilities and substance abuse. Cardinal offers services for people with disabilities, mental health needs and substance abuse in 20 counties including Mecklenburg.