Dirty South Bribery and Embezzlement Scheme

A former executive of a Springfield, Missouri charity, pleads guilty in federal court. The circumstances surrounding the guilty plea include bribing several Arkansas state government officials in a multi-million-dollar bribery and embezzlement scheme. And further, the scheme involves other charity executives, wherein the former executive embezzles millions of dollars from a health care organization in Missouri.

Milton “Rusty” Cranford, originally from Rogers, Arkansas, is the perpetrator behind the criminal scheme. Cranford pleads guilty to one count of federal program bribery. Cranford, an executive at Preferred Family Healthcare Inc. (formerly known as Alternative Opportunities Inc.), runs a nonprofit corporation headquartered in Springfield, Missouri. His primary responsibility is to run the charity’s operations and lobbying efforts in the state of Arkansas. Additionally, Cranford manages three lobbying firms: The Cranford Coalition, The Capital Hill Coalition and Outcomes of Arkansas.

In pleading guilty, Cranford admits that he and other Preferred Family Healthcare executives pay bribes to Arkansas government officials. Specifically, the recipients of the bribes are Arkansas State Senator Jonathan Woods and Arkansas State legislator Henry Wilkins IV. For the bribes, the corrupt Arkansas officials promise favorable legislative action for Cranford, his clients, and Preferred Family Healthcare. In exchange for Cranford’s bribes, the Arkansas officials steer Arkansas General Improvement Fund (GIF) funds to Preferred Family Healthcare and other Cranford clients. Furthermore, the officials increase agency budgets; request legislative audits; and sponsor, file and vote for legislative bills favoring the charity and Cranford’s clients.

White Collar Greed

The illicit income to Preferred Family Healthcare from Cranford’s bribes creates another layer of corruption within the charity itself. Specifically, it creates the framework for Cranford and other charity executives to engage in multiple embezzlement schemes. In doing so, Cranford and his cronies unjustly enrich themselves at the expense of the charity. Some of their activities include diverting charity funds to for-profit companies owned by the executives. For example, the charity makes rental payments to properties owned by Cranford and other executives. Other circumstances include paying for personal expenses and providing no pay back loans to Cranford, personally. And finally, the executives misappropriate charity funds for unlawful contributions to the campaigns of elected public officials. Most notably, the charity allocates a substantial budget on lobbying and political advocacy.

Finally, and most egregious, Cranford enters into an illegal and massive kickback scheme. As a part of the conspiracy, Cranford pays over $600,000 in illegal kickbacks to a charity executive. In return, the charity executive diverts $3.5 million in payments to The Cranford Coalition.