CBS News has learned that federal authorities in Boston have opened a criminal investigation into Steward Healthcare, which owns dozens of hospitals across the country, including nine in Massachusetts, according to two people familiar with the matter. Dallas-based Steward recently filed a lawsuit against the company. Filed for bankruptcy.
Prosecutors from the U.S. Attorney’s Office in Boston are investigating Steward Healthcare on a variety of charges, including fraud and violations of the Foreign Corrupt Practices Act, which bars U.S. citizens and companies from engaging in corrupt practices while doing business abroad, according to two people familiar with the matter.
In addition to facilities in the United States, Steward was hired by the Maltese government to operate three state-run hospitals. The deal is now at the center of an ongoing criminal corruption investigation in the island nation. Neither Steward nor any of its executives have been charged in connection with the case in Malta.
The Justice Department did not immediately respond to CBS News’ request for comment.
Reached Thursday, a spokesman for Steward had no immediate comment.
Steward filed for bankruptcy reorganization in May and is considering a plan to sell all of its hospitals. Bids close on Monday for a Massachusetts facility that remained open during the bankruptcy proceedings.
The company: A year and a half long CBS News investigation Private equity and other investor groups Hundreds of millions of dollars misappropriated From local hospitals have devastating effects on public health.
Steward hospitals across the country were left with unpaid bills and at times at risk of running out of potentially life-saving supplies, according to records reviewed by CBS News.
The Massachusetts Department of Health has launched an investigation. After a woman dies after giving birth It happened at Steward Hospital in Boston last October. A complaint by health care workers at the facility and obtained by CBS News said a manufacturer had seized medical equipment that may have saved Steward’s life just weeks earlier because she owed about $2.5 million in unpaid bills.
Steward has become synonymous with the perils of private equity investing in health care: The company began buying Massachusetts hospitals in 2010 with hundreds of millions of dollars of backing from private equity giant Cerberus.
Cerberus sold its stake in Steward by January 2021 after making $800 million in profits over a decade, Bloomberg reported. Financial records show Steward has sold hospital land and buildings for more than $1 billion since 2016 to Medical Properties Trust. Started a business Buying hospital real estate from private equity investors.
Steward’s owners have also paid themselves millions in dividends, according to documents filed with the Securities and Exchange Commission in 2021. Around the same time, Steward CEO Ralph de la Torre purchased a 190-foot yacht worth an estimated $40 million.
“They’re taking money away from hospitals that are providing essential care and using it to line their own pockets,” Massachusetts Gov. Maura Healey told CBS News in February. “It’s disgusting. It’s selfish. It’s greedy.”
The company previously told CBS News that its leadership has always put patients first and has “never allowed other considerations to take precedence over that guiding principle.” A company spokesman said Steward has made “aggressive and meaningful investments” in hospital systems since its founding, including one in Massachusetts, and that it took over a “distressed” hospital that was “on the brink of closure.”
“Steward Healthcare has been committed to operating successfully in an extremely challenging healthcare environment,” de la Torre said in a company statement in May.
