The jury trial of Rep. Tricia Derges is ongoing this week, as federal prosecutors seek to prove the state lawmaker engaged in a variety of fraud at medical clinics she ran in southwest Missouri.
Derges, a Nixa Republican, has been charged with wire fraud, writing illegal prescriptions, making false statements to federal investigators and illegally obtaining federal pandemic aid money from Greene County. She has maintained her innocence and rejected several plea deals.
After spending Monday selecting a jury, prosecutors on Tuesday zeroed in on the finances of medical clinics owned and operated by Derges throughout the region: the nonprofit Lift Up Springfield, as well as Ozark Valley Medical Clinic, which has locations in Springfield, Branson and Ozark.
Assistant U.S. Attorney Shannon Kempf argued that Derges had created a "scheme to defraud" the county in an effort to secure nearly $300,000 in pandemic aid money for Lift Up Springfield. He said her application requested reimbursement for money spent on COVID-19 testing, which had already been incurred by the Ozark Valley clinics, and that the Ozark Valley clinics had "profited from COVID-19 testing" that patients were charged for.
Tricia Derges: Jury selection underway for trial of state lawmaker
Derges sought to sell the Ozark Valley clinics prior to her indictment, according to emails and testimony from two accountants: Jodi Schmitt, who had done payroll tax preparation for Lift Up Springfield and volunteered to put together information for potential buyers for Ozark Valley, and Susan Reynolds, who had provided tax services to Derges for years.
When Reynolds was unable to compile a financial history of the Ozark Valley clinics in the brief timeline that Derges requested, Derges turned to Schmitt, who put together the packet "as a favor, for free."
Both accountants testified that there discrepancies between versions of tax returns. Reynolds told prosecutors that expenses from lab work that were initially present in the Ozark Valley clinic's draft tax return were gone in a later version of Derges and her husband's personal tax form. The net total difference between the two versions was upwards of $600,000, she said.
Al Watkins, the attorney representing Derges, chose not to make an opening statement and instead preserve his time for later. During cross-examination, he sought to poke holes in the accountants' testimony, asking for specific dates and details of their meetings with the government. He also pointed to errors in documents filed by the accountants, such as a missing "LLC" on one tax form.
Karen Fackler, an employee with the Springfield-based Dynamic DNA Laboratories, told the court that the company had contracted with Ozark Valley Medical Clinic in April 2020 to provide supplies for COVID tests, sold to the clinics at $99.99 per test and offered to patients at an upcharge.
Prosecutors began to make the case Tuesday afternoon that Derges had not made the distinction between the nonprofit and the clinics clear, pointing to a litany of social media posts as evidence.
FBI Special Agent Michael Effland said the agency's investigation into Derges was spurred in part by a televised interview she did on KOLR at the beginning of the pandemic, in April 2020, when the FBI had "a heightened awareness of fraud." Derges claimed in that interview, in social media posts and on other public-facing marketing materials that her clinic specialized in stem cell treatments that she claimed could have resistant effects to COVID-19.
"That is what (the patients) wanted, that is what they paid for, that's not what they got," Kempf said in his opening statement.
Prosecutors allege Derges instead administered amniotic fluid injections to patients that did not contain stem cells.
The trial will continue Wednesday morning and is expected to run for about two weeks. Prosecutors said in court Tuesday they planned to call several medical professionals to testify, as well as government officials including Greene County Presiding Commissioner Bob Dixon and County Auditor Cindy Stein.
This article originally appeared on Springfield News-Leader: Derges trial begins as prosecutors scrutinize medical clinic money