Lawsuit alleges BBH chief executive 'diverted and stole' employee retirement contributions

A staff member at Baltimore Behavioral Health Inc. has filed a lawsuit against the private clinic in Southwest Baltimore, alleging that officials there "diverted and stole" thousands of dollars from employees by failing to deposit payroll deductions into their retirement and disability plans.

The lawsuit, filed in U.S. District Court in Baltimore, claims that more than 100 employees "suffered substantial financial losses in both 2009 and 2010 as a result of the diversion and theft of employee contributions that should have been placed in the Retirement and Disability Plans."

BBH officials declined to comment.

The suit's filing comes amid a series of challenges for BBH, long one of the city's largest providers of drug treatment at its sprawling outpatient mental health clinic on West Pratt Street.

BBH is a defendant in a separate lawsuit filed in April by Bank of America claiming that the clinic is in default on loans of up to $2.5 million and has refused to give the bank "critical financial information."

In addition, the U.S. Department of Labor has been conducting an inquiry into BBH's employee retirement plan, following claims by former employees that money deducted from their paychecks never reached their retirement accounts as required.

The federal suit was filed July 14 by Gail Mink, the clinic's admissions director, on behalf of herself and all other participants in the clinic's employee retirement plans. BBH is named as a defendant along with William "Kris" Hathaway, its chief executive.

The suit does not estimate total alleged losses. Mink claims that she is owed at least $5,000. The suit demands repayment with interest, and also seeks damages equal to triple the employee contributions that allegedly were not deposited.

Hathaway did not return a call Wednesday seeking comment. Nor did Morris A. Hill and Sandra K. Hill, two other BBH officials accused in the suit of having participated in decisions not to pay back employee contributions.

A nonprofit company founded in 1997, BBH has received more than $65 million in government payments over the past five years. It specializes in treating patients with both mental illness and drug addiction, largely billing the Medicaid program for the poor and disabled. In May it said it was treating 150 people a day, down from 225 a year earlier.

The clinic was the subject of a Baltimore Sun investigation last year that revealed unusually high Medicaid billings and detailed the nonprofit organization's control by Hathaway and several family members who earned six-figure salaries.

Its revenue has fallen sharply since late 2009, when state mental health officials curtailed its ability to bill for high-cost treatment, resulting in layoffs and prompting the clinic to seek a buyer for its campus.

Mink's suit claims that from early 2009 until May 2010, BBH "placed few if any of the required contributions" made by employees through paycheck contributions into the retirement and disability plans. Clinic management also failed to match employee contributions as promised, the suit alleges.

The suit accuses BBH and Hathaway of "a pattern of racketeering" and asks a judge to grant employee participants class-action status.

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