Probe seeking North Carolina health agency documents closed


RALEIGH, N.C. (AP) — Federal prosecutors have ended an investigation seeking information about high-cost contractor work at the North Carolina Department of Health and Human Services.

Grand jury subpoenas issued in July 2015 sought department documents, including the records of more than 30 employees and correspondence between certain contractors and former department Secretary Dr. Aldona Wos. Letters from the U.S. attorney’s office in Raleigh to private lawyers representing DHHS say the investigation related to the subpoenas has been closed. They didn’t address whether anything had occurred as a result.

“This letter does not grant immunity from prosecution to anyone,” said the two near-identical letters, dated Wednesday and signed by David Bragdon, a prosecutor in the office’s criminal division. “If new evidence comes to our attention, the investigation could be reopened, or a new investigation could ensue.”

A U.S. attorney’s spokesman said Friday that the office had no comment on the matter.

The News & Observer of Raleigh first reported on the letters. DHHS spokeswoman Kendra Gerlach wrote in an email that the agency had always expected the outcome indicated in the letters. Wos’ attorney, Jim Cooney, said neither he nor Wos had a statement Friday evening.

Wos, appointed secretary by Gov. Pat McCrory, announced her resignation in August 2015. The subpoenas were made public last September.

One subpoena sought records for contracts between DHHS and former State Auditor Les Merritt, Thomas L. Adams, Joe Hauck and the firm Alvarez & Marsal.

Merritt was hired in May 2013 to work in the state mental health division at $150 per hour for a year. Adams worked as Wos’ chief of staff for only a month before leaving his job in April 2013. Adams later agreed to a lump sum payment to settle any potential claims he might have against the state agency, according to records. Hauck, who had been working for a firm led by Wos’ husband, worked 11 months as a department consultant to Wos in 2013, with his compensation for agency work capped at $310,000.

Alvarez & Marsal won a no-bid contract in early 2014 to help with the reorganization and finances of the Division of Medical Assistance, which operates Medicaid. The contract initially cost $3.25 million but grew to more than $9 million, according to records.

The other subpoena demanded records of more than 30 employees, including Angeline Sligh, the former Medicaid information systems director. Sligh has been singled out in a May 2015 audit for what it identified as wasteful spending related to hiring temporary workers for building a Medicaid billing system.

The subpoenas were issued while Thomas Walker was U.S. attorney for North Carolina’s Eastern District. He left the post earlier this year. It’s now held by career federal prosecutor John Bruce.

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