You are on page 1of 7

Eastern District of Kentucky

UNITED STATES DISTRICT COURT


EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
CRIMINAL ACTION NO. SJJ~

.. f!.--'S/Q ... /.(l(C.,.

UNITED STATES OF AMERICA


V.

FIL I! D

SEP 2 8 2G~S
AT LEXINGTON
ROBERT R. CARR
CLERK U.S. DISTRICT COURT

PLAINTIFF

PLEA AGREEMENT

LAWRENCE J. O'BRYAN

DEFENDANT

* * * * *
1. Pursuant to Federal Rule of Criminal Procedure 11 (c), the Defendant will enter
a guilty plea to Counts 1, 2, and 3 of the Information, each charging a violation of
18 U.S.C. 666(a)(2), bribery concerning a program that receives federal funds.
2. The essential elements of Counts 1, 2, and 3 are:
(a)

The Defendant corruptly gave, offered, or agreed to give anything of


value to any person;

(b)

The Defendant intended to influence or reward an agent of a state


government or any agency thereof, in connection with any business,
transaction, or series of transactions of such government or agency
involving anything of value of $5,000 or more; and

(c)

Within the same one-year period as the Defendant's conduct, the state
government or agency in question received benefits in excess of
$10,000 under a federal program involving a grant, contract, subsidy,
loan, guarantee, insurance, or other form of federal assistance.

3. The statutory punishment for Counts 1, 2, and 3 is imprisonment for not more
than 10 years, a fine of not more than $250,000, and a term of supervised release of not
more than 3 years. A mandatory special assessment of $100 applies, and the Defendant

will pay this assessment to the U.S. District Court Clerk at the time of the entry of the
plea.
4. As to Counts 1 through 3, the United States could prove the following facts that
establish the essential elements of the offense beyond a reasonable doubt, and the
Defendant admits these facts:
(a)

At all relevant times, the Kentucky Personnel Cabinet was an agency of


a state government within the purview of 18 U.S.C. 666(a)(2). In each
period of twelve consecutive months covered by this Information, the
government of the Commonwealth of Kentucky received benefits in
excess of $10,000 under a federal program involving a grant, contract,
subsidy, loan, guarantee, insurance, and other form of federal assistance,
within the meaning of 18 U.S.C. 666(b). Furthermore, at all relevant
times, the Secretary of the Kentucky Personnel Cabinet was Timothy
Longmeyer. As Secretary, Longmeyer was the Personnel Cabinet's
chief executive and was an agent of the Commonwealth of Kentucky
within the purview of 18 U.S.C. 666(a)(2).

(b)

At all relevant times, the Kentucky Personnel Cabinet held


responsibility for the administration of pay and benefits for employees
of the Commonwealth of Kentucky. This included responsibility over
the Kentucky Employees' Health Plan (hereinafter, "KEHP"). Under
the KEHP, the Commonwealth of Kentucky contracted with private
health insurance companies, including Humana, Inc. (hereinafter,
"Humana"), to provide health care coverage to Commonwealth
employees and their dependents.

(c)

In or about July 2009, Timothy Longmeyer contacted the Defendant and


they formulated a kickback scheme. Under the scheme, Longmeyer
would use his position to persuade Humana to retain MC Squared, LLC
(hereinafter, "MC Squared"), a consulting company based in Lexington,
Kentucky, for focus groups and telephone surveys with KEHP
participants. In exchange for Longmeyer's assistance in securing
contracts for MC Squared, the owner of MC Squared, S.M., would pay
the Defendant approximately half of MC Squared' s proceeds from
contracts with Humana. After receiving each such payment from S.M.,
the Defendant would withhold a portion of the payment that he believed
was due and payable as taxes. The Defendant would then use various
means to kick back fifty percent of the remaining funds to Longmeyer.
2

(d)

Between a date in or about October 2011 and a date in or about March


2014, MC Squared received multiple payments of consulting fees from
Humana. S.M. then caused approximately half of each such payment to
be transferred to the Defendant or to Proactive Media, a company
controlled by the Defendant, for the purpose of fulfilling the kickback
agreement. After withholding a portion of each such payment in the
manner described above, the Defendant then paid fifty percent of the
remaining funds to Longmeyer. These transactions occurred on or
about the following dates and in the following amounts:
Approximate
Date of
Payment to
MC Squared
from Humana

(e)

Amount of
Payment to MC
Squared from
Humana

10/18/2011
1211/2011
3/13/2012
4/24/2012
5/22/2012
9/17/2012
12/3/2012
2/21/2013
3/14/2013
5/24/2013
5/24/2013
10/31/2013
11/22/2013
3/4/2014

$26,125.00
$49,875.00
$71,820.00
$165,847.50
$73,710.00
$73,710.00
$108,225.00
$73,710.00
$166,698.00
$176,580.00
$13,162.50
$55,500.00
$120, 180.00
$117,720.00

TOTALS

$1,292,863.00

Approximate Date
of Payment from
MC Squared to the
Defendant

10/24/2011
12/7/2011
3/16/2012
4/27/2012
7/2/2012
9/24/2012
12/10/2012
3/1/2013
3/19/2013
6/3/2013
6/3/2013
11/13/2013
12/4/2013
3/11/2014

Amount of
Payment from MC
Squared to the
Defendant

$13,062.50
$24,937.50
$35,910.00
$82,923.75
$36,855.00
$36,855.00
$51,112.50
$36,855.00
$83,349.00
$88,290.00
$6,581.25
$27,750.00
$58,860.00
$58,860.00
$642,201.50

Through this kickback scheme, MC Squared received contracts to


perform consulting work for Humana intermittently between the
inception of the scheme through a date in or about December 2014. The
Defendant served as the conduit for kickbacks paid from S.M. to
Longme;_:er from the inception of the scheme through a date in early
2014. Throughout the scheme, Longmeyer ensured that the Kentucky
government reimbursed Humana for its payments to MC Squared.

5. Pursuant to Rule 1 l(c)(l)(B), the United States and the Defendant recommend
the following sentencing guidelines calculations, and they may object to or argue in favor
of other calculations. This recommendation does not bind the Court.
(a)

The United States Sentencing Guidelines (U.S.S.G.), November 2015


manual, will determine the Defendant's guidelines range.

(b)

Pursuant to U.S.S.G. lBl.3, the Defendant's relevant conduct


includes all payments solicited or accepted from S.M. on behalf of
Timothy Longmeyer between March 13, 2011 and March 12, 2014.

(c)

Pursuant to U.S.S.G. 2Cl.l(a), the base offense level is 12.

(d)

Pursuant to U.S.S.G. 2Cl.l(b)(l), increase the offense level by


2 levels because the offense involved more than one bribe.

(e)

Pursuant to U.S.S.G. 2Cl.l(b)(2) and 2Bl.l(b)(l)(H), increase the


offense level by 14 levels because the value of the payments solicited or
accepted from S.M. by the Defendant during the relevant timeframe was
$642,201.50.

(f)

Pursuant to U.S.S.G. 2Cl. l(b)(3), increase the offense level by


4 levels because the offense involved a public official in a high-level
decision-making or sensitive position.

(g)

Pursuant to U.S.S.G. 3El.1 and unless the Defendant commits another


crime, obstructs justice, or violates a court order, decrease the offense
level by 2 levels for the Defendant's acceptance of responsibility. If the
offense level determined prior to this 2-level decrease is level 16 or
greater, the United States will move at sentencing to decrease the
offense level by 1 additional level based on the Defendant's timely
notice of intent to plead guilty.

(h)

Pursuant to U.S.S.G. 5El.1, restitution is $642,201.50, and the victim


is the Commonwealth of Kentucky. At or before the time of sentencing,
the Defendant shall pay $642,201.50 to satisfy the full amount of
restitution owed.

6. No agreement exists about the Defendant's criminal history category pursuant


to U.S.S.G. Chapter 4.
4

7. The Defendant will not file a motion for a decrease in the offense level based
on a mitigating role pursuant to U.S.S.G. 3Bl.2 or a departure motion pursuant to
U.S.S.G. Chapter 5, Parts Hor K.
8.

The Defendant waives the right to appeal the guilty plea, conviction, and

sentence. Except for claims of ineffective assistance of counsel, the Defendant also
waives the right to attack collaterally the guilty plea, conviction, and sentence.
9.

The United States will recommend releasing the Defendant on the current

conditions for future court appearances if the Defendant does not violate the terms of the
order setting conditions of release. If the Defendant receives a sentence of imprisonment,
the United States will not object to a request by the Defendant to self-surrender.
10. The Defendant agrees to cooperate fully with the United States Attorney's
Office by making a full and complete financial disclosure. Within 30 days of pleading
guilty, the Defendant agrees to complete and sign a financial disclosure statement or
affidavit disclosing all assets in which the Defendant has any interest or over which the
Defendant exercises control, directly or indirectly, including those held by a spouse,
nominee, or other third party, and disclosing any transfer of assets that has taken place
within three years preceding the entry of this plea agreement. The Defendant will submit
to an examination, which may be taken under oath and may include a polygraph
examination.

The Defendant will not encumber, transfer, or dispose of any monies,

property, or assets under the Defendant's custody or control without written approval
from the United States Attorney's Office.

If the Defendant is ever incarcerated in

connection with this case, the Defendant will participate in the Bureau of Prisons Inmate
5

Financial Responsibility Program, regardless of whether the Court specifically directs


participation or imposes a schedule of payments. If the Defendant fails to comply with
any of the provisions of this paragraph, the United States, in its discretion, may refrain
from moving the Court pursuant to U.S.S.G. 3El.l(b) to reduce the offense level by
one additional level, and may argue that the Defendant should not receive a two-level
reduction for acceptance ofresponsibility under U.S.S.G. 3El. l(a).
11. The Defendant understands and agrees that, pursuant to 18 U.S.C. 3613,
whatever monetary penalties are imposed by the Court will be due and payable
immediately and subject to immediate enforcement by the United States. If the Court
imposes a schedule of payments, the Defendant agrees that it is merely a minimum
schedule of payments and not the only method, nor a limitation on the methods, available
to the United States to enforce the judgment. The Defendant waives any requirement for
demand of payment on any fine, restitution, or assessment imposed by the Court and
agrees that any unpaid obligations will be submitted to the United States Treasury for
offset.

The Defendant authorizes the United States to obtain the Defendant's credit

reports at any time. The Defendant authorizes the U.S. District Court to release funds
posted as security for the Defendant's appearance bond in this case, if any, to be applied
to satisfy the Defendant's financial obligations contained in the judgment of the Court.
12. If the Defendant violates any part of this Agreement, the United States may
void this Agreement and seek an indictment for any violations of federal laws, and the
Defendant waives any right to challenge the initiation of additional federal charges.

13.

This document and the supplement contain the complete and only Plea

Agreement between the United States Attorney for the Eastern District of Kentucky and
the Defendant. The United States has not made any other promises to the Defendant.
14. This Agreement does not bind the United States Attorney's Offices in other
districts, or any other federal, state, or local prosecuting authorities.
15. The Defendant and the Defendant's attorney acknowledge that the Defendant
understands this Agreement, that the Defendant's attorney has fully explained this
Agreement to the Defendant, and that the Defendant's entry into this Agreement is
voluntary.
KERRY B. HARVEY
UNITED STATES ATTORNEY
Date:

~q(_,~/t_,__

By:

~'-

AndreT.~e

Assistant United States Attorney

Date:

r;r.Jf::i l b
Lawrence J. O'
Defendant

Date:

Sc~y

l Cf trJ C 1~

Attorney for Defendant

Date:
Attorney for Defendant
7