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Medicaid fraud jury rests for night

BIRMINGHAM (AP) — The jury in the Medicaid fraud trial of Dr. Phillip Bobo recessed for the night Thursday after deliberating about five hours on its first day to consider a verdict.

The jury began deliberations Thursday after final instructions for U.S. District Judge Sharon Blackburn. It is to resume work Friday morning.

Bobo is accused of trying to bribe a health care group not to compete for a state Medicaid contract in 1999. The trial is his second after a 2001 conviction was thrown out by a federal appeals court.

Bobo's attorney told the jury in closing arguments that Bobo broke no law when negotiating a business arrangement with health care providers. The defense attorney, Bill Clark, said federal prosecutors had miscast the prominent Tuscaloosa physician's conversations as illegal.

"Dr. Bobo believed he had the right to do what he did, and he was acting in good faith," Clark said.

But Assistant U.S. Attorney Matt Hart said Bobo was trying to rig the system by paying off his competitor in 1999 with help from friends in state government.

"If you get together ahead of time and collude to cheat, that's cheating," Hart told the jury Wednesday.

Bobo, 63, is charged with health care and wire fraud, witness tampering, lying to an FBI agent and lying on the witness stand during his previous trial, when his conviction was thrown out by a federal appeals court.

Bobo, testifying in the second trial, denied all the charges, saying his 1999 conversations with a physician and administrator of a health care group were aimed at bringing them into his business to get the Medicaid contract. He said federal prosecutors misrepresented his statements in accusing him of witness tampering and giving false statements to investigators and in court.

Bobo's company, Neighborhood Health Services, had won the contract in spring 1999 to provide prenatal care to poor women in an area including Tuscaloosa, Pickens, Bibb and Lamar counties. His competitor, Alabama Health Network, won the bid for Greene and Hale counties.

But amid questions about the bidding, the state Medicaid agency said it would seek a new round of bidding on the Tuscaloosa-area contract. The defense contended Bobo's conversations with two officials of Capstone Medical Center occurred before a new bid process was initiated by the state and were nothing more than business negotiations.

"If Dr. Bobo believed the bids had been canceled, he could talk," Clark said.

Prosecutors arranged for phone conversations between Bobo and two officials with Capstone Medical Center, a partner with Alabama Health Network, to be secretly recorded. On the tapes, Bobo is told Capstone has an $800,000 financial shortfall and he discusses paying Capstone $800,000 if AHN would drop its contract for Greene and Hale counties and not rebid on Tuscaloosa County.

As discussed on the tapes, $550,000 was to come from the Alabama Fire College, where Bobo was medical director, and $250,000 from Bobo's group. Bobo, a supporter of then-Gov. Don Siegelman, said he was assured of the money but didn't specify where it would come from.

Bobo, whose 2001 conviction was overturned, was indicted in May 2004 along with Siegelman and Paul Hamrick, his chief of staff. Prosecutors claimed that Siegelman and Hamrick helped steer $550,000 in state money to the Fire College, but the government dropped the case after a federal judge ruled there was not enough evidence to support a key conspiracy charge.

Bobo's case had been separated from the case against Siegelman and Hamrick.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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