A West Monroe businessman seeking to liquidate assets and erase his debt now faces a motion for contempt and sanctions in federal bankruptcy court in the wake of state court lawsuits and federal authorities investigating his two home health agencies.
John “Danny” Jones, of West Monroe, filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court for the Western District of Louisiana last October. He claimed he did not earn enough wages to pay down his debts. He previously operated two area home health agencies, United Home Care Inc. and Trinity Home Health Care Inc.
United Home Care and Trinity Home Health Care are no longer active operations.
A handful of lawsuits involving Jones — who claimed other United Home Care officials engaged in check-kiting and the embezzlement of millions of dollars — are ongoing at Fourth Judicial District Court in Monroe.
Some of the responses to those lawsuits claimed Jones was using litigation to distract from his financial problems and to delay any criminal prosecution arising out of activity at his home health agencies.
Meanwhile, evidence filed at the district court during a recent criminal case involving a West Monroe police officer revealed hundreds of pages of text messages sent or received by Jones’ ex-wife, Michelle Jones. Numerous text messages between Michelle Jones and people connected to United Home Care also shed light on the company’s closure and some of the litigation against Danny Jones.
The news that United Home Care had shuttered first surfaced during civil proceedings in United Home Care Inc. and others v. Charlie Simpson and others. The principal defendants in the lawsuit were Charlie Simpson, United Home Care’s former chief operating officer, and Charles Gardner, United Home Care’s former chief financial officer.
Danny Jones sued Simpson and Gardner in April 2017. He accused the pair of embezzling money from the home health agency. Simpson and Gardner filed a counter lawsuit against Danny Jones, arguing he was using litigation to conceal his participation in the embezzlement.
Since the lawsuit was filed, numerous allegations surfaced concerning the three executives’ use of company funds for personal gain. Millions of dollars in company funds were allegedly embezzled, and those funds were allegedly used to pay personal credit card debts, personal travel expenses and more.
Danny Jones flouted court orders to produce documents and neglected to pay the costs of appealing a judgment against him by Fourth Judicial District Court Judge Daniel “Danny” Ellender, court records show. Though Simpson and Gardner filed a motion to dismiss Danny Jones’ appeal, no judgment granting that motion has been entered into the court record as of earlier this week.
Jones revives claims
Danny Jones revived his claims that Simpson and Gardner engaged in wrongdoing in a separate lawsuit against area banks and insurance companies.
In March 2018, Danny Jones sued First National Bank of Arcadia and Origin Bank as well as two insurance companies. He sued them through his companies, United Home Care and Trinity Home Health Care. In his lawsuit, he claimed he was the sole owner of both United Home Care and Trinity Home Health Care.
In his lawsuit, he alleged that Simpson and Gardner engaged in a “circular ‘check kiting’ scheme whereby in excess of $400 million in funds was ‘kited’ between financial institutions, including FNB and Origin Bank, and which, when the ‘kiting’ scheme fell apart, resulted in large losses to the plaintiffs.”
Danny Jones expanded the allegations to include others, too. First National Bank’s Mike McGee (vice president, market leader at FNB branch in West Monroe) and Audrey Peterson (vice president at FNB branch in West Monroe) assisted Simpson and Gardner in their wrongdoing, according to Danny Jones’ lawsuit.
First National Bank and Origin Bank denied Danny Jones’ allegations in separate answers, and each bank also filed a counter suit against Jones and his companies. Origin Bank sought repayment of a promissory note to Trinity Home Health Care that was worth more than $1.7 million with interest accruing at some $190 a day.
Meanwhile, First National Bank claimed that Danny Jones’ allegations were false and injurious to the reputations of the bank and its officers. Danny Jones was simply seeking to recover money from an innocent party and avoid criminal prosecution, First National Bank argued.
First National Bank also pointed out that Danny Jones’ businesses, including the alleged check-kiting scheme, were under investigation.
“The Federal Government is, at the very least, investigating the manner and nature of Plaintiffs’ businesses, including the alleged check-kiting scheme,” stated First National bank’s answer.
First National Bank included a section from a prior deposition of Danny Jones. The quoted material did not identify the person posing questions to Danny Jones.
“And after you were aware that the FBI was performing an investigation?”
“This was after that, yes,” Danny Jones said.
“You’re claiming that you were kept in the dark, and the company was involved in ‘check kiting,’ correct?”
“Yes,” Danny Jones said.
In the same deposition, Danny Jones denied he had any plans to sue First National Bank, Peterson, or McGee. Danny Jones did not file the lawsuit against First National Bank until after the deposition.
“After the testimony above — and after being questioned by the FBI and after receiving repeated adverse rulings in somewhat related litigation — the Plaintiffs filed suit against FNB,” stated First National Bank’s answer.
First National Bank’s answer did not outline the scope of the FBI investigation.
in sex tape case
A handful of text messages filed as evidence in a criminal case in Fourth Judicial District Court last year also referred to the FBI questioning Danny Jones and others as part of an investigation.
The case, State of Louisiana v. Dennis Edward Wall, stemmed from a complaint in late 2017 that West Monroe police officer Dennis Wall had sent a video — depicting sexual intercourse between himself and his then-girlfriend, Brandi Womack — to Michelle Jones, who was Danny Jones’ ex-wife. When Wall sent the video in late 2017, Brandi Womack and Danny Jones were dating. Womack worked for Danny Jones at United Home Care, and the pair got married in February 2018, though they have since divorced.
After receiving the sex video, Michelle Jones — who is a classroom teacher at West Monroe High School — sent the sex video or images from it to several people, including employees at United Home Care and Danny Jones’ son, according to investigative reports from the Ouachita Parish Sheriff’s Office.
Wall was arrested for non-consensual disclosure of a private image in early 2018. Fourth Judicial District Attorney Tew did not prosecute Michelle Jones but offered her a diversion agreement guaranteeing immunity from any criminal charge after paying a $650 fine.
Devin Jones, Wall’s attorney, filed the text messages sent or received by Michelle Jones as evidence in State v. Wall prior to the trial in November 2019. At trial, a six-person jury acquitted Wall of the criminal charges.
There were 989 pages of text messages entered into the court record. In most of the text message conversations, Michelle Jones spoke about her role in the sex video controversy or about her diversion agreement with a handful of people, like reserve sheriff’s deputy Mark Parrish or Sandie Winters, who is Fourth Judicial District Court Judge Stephens Winters’ wife. Other text messages contained mundane conversations between Michelle Jones and her relatives or friends.
Numerous text message conversations, though, pertained to United Home Care or involved people connected to United Home Care or the litigation against Danny Jones.
In a Jan. 15, 2018 text message, Michelle Jones described Danny Jones as “very desperate” because United Home Care had been dropped from the Vantage Health Plan network the week before.
“[He] lost [V]antage last week and that eliminated $200k/month and he couldn’t function without it,” said Michelle Jones in the text message.
The Ouachita Citizen reached out to Michael Echols, director of business development for Vantage Health Plan, about why United Home Care was removed from Vantage’s network.
“At that time, we went through a network narrowing where we reduced the number of providers, mostly home health and other services,” Echols said. “It was part of an industry trend. Blue Cross [Blue Shield] and others were reducing the numbers, so we took the same approach.”
“It had nothing to with the lawsuit,” he added.
According to text messages and statements given in depositions, United Home Care ran afoul of Medicare, too.
In an October 2017 memorandum in United Home Care v. Simpson, Simpson claimed Danny Jones instructed him to provide United Home Care and Trinity Health Home Care marketers with bonuses for Medicare patient referrals that were paid through gift cards and Visa cards.
“Additionally, the cost reports and master report are likely to lead to the discovery of admissible evidence,” stated Simpson’s motion. “Mr. Simpson is accused of stealing through the use of credit cards as well as family cards and gift cards. The gift and family cards were allocated properly as an expense on the cost reports. The cost reports will provide a report that was allocated, approved, and signed and certified by Danny Jones and then submitted to Medicare as an official financial report to CMS of income and expenses. Danny Jones was the listed administrator and the only person to ever sign off on those reports, which shows full disclosure of the expenses, their allocations, and Danny Jones’ approval, along with Plaintiffs’ pattern and practice for years.”
The gift cards were allegedly paid to marketers based “on the number of referrals/admits of Medicare patients, including re-admits,” according to Simpson’s October 2017 motion.
Court documents filed in United Home Care v. Simpson in May 2017 indicated Danny Jones sent a letter to some 500 employees of United Home Care and Trinity Home Health Care, announcing the termination of Simpson and Gardner. In his letter, Danny Jones sought to distance himself and his companies from any allegations of wrongdoing involving Medicare, Medicaid or private insurance.
According to Gardner’s May 12, 2017 answer, Jones’ letter stated the following: “As many of you know this company is taking a different direction. On Monday March 13, 2017, Charlie Simpson C.O.O. And Charles Gardner C.F.O. Services were terminated and no longer represent any of these companies. I, Danny Jones, will be back in the office running the company on a day to day basis. We are currently investigating allegations of employee theft, however these thefts or misappropriations have nothing to do with Medicare, Medicaid or private insurance of any type.”
Depositions taken in Danny Jones’ bankruptcy case shed further light on United Home Care’s troubles as a Medicare-certified home health service provider.
It was through Gardner’s attorney, Todd Benson, of Shreveport, that allegations surfaced claiming Danny Jones committed tax evasion and bankruptcy fraud by concealing payments for work he performed for Dawne Smith. Text messages and credit card bills refer to Smith as Dawne Walsworth (she was previously married to state Sen. Mike Walsworth). (Gardner was involved in the bankruptcy case because he was one of Danny Jones’ creditors, according to Benson.)
During a Nov. 6, 2019 deposition of Dawne Smith, Benson asked Smith several questions about United Home Care’s dissolution as well as how she became friends with Danny Jones. According to Smith, her relationship with Danny Jones began through business.
“[In] 2017, Origin — or, at that time, Community Trust Bank board asked me to come to their office and they wanted to have a meeting with me and they explained to me that one of their large clients had — I can’t remember exactly the words they used, but, basically, the two men in charge had left a 3.5 million dollar negative balance at their bank and they had no confidence in the owner, who had stepped out of the picture four years prior and they needed someone to oversee and manage the cash to see if it was a viable business,” Smith said.
Smith confirmed the “owner” mentioned was Danny Jones.
When asked why United Home Care, Smith said, “Medicare suspended the payments for six months.”
“Okay,” Benson said. “And that caused the business to fail, correct?”
“Yes,” Smith said.
Smith also confirmed she helped run United Home Care before the company shuttered.
Text messages and comments made during depositions indicated a number of United Home Care’s patients were transferred to a home health agency in Ruston in which Smith had an ownership stake. The other home health agency was identified as Carroll Home Health, which has undergone several name changes since then.
In a Jan. 19, 2018 text message to Michelle Jones, Darrell Newman, who also works in the home health industry, expressed little to no surprise when he was informed that Danny Jones denied certain claims about his company’s closure or that Carroll Home Health employees were answering United Home Care’s phone number. Newman was one of the original founders of United Home Care. He and Steve Privitor ultimately sold the company to Danny Jones. Newman now owns and operates Stat Home Health North in West Monroe.
“Not surprised at all based on what several folks that worked there have said,” said Newman in the text message. “But Carroll HH is just a continuation of UHC.”
In a Nov. 6, 2019 deposition, Smith described Carroll Home Health as a company “that I have ownership in.”
Echols confirmed that Carroll Home Health also was dropped from Vantage’s network, though he followed up that remark by saying many of the home health agencies dropped from the network were excellent health care providers.
In their depositions, Smith and Danny Jones each said United Home Care had about 1,800 patients when it closed. Trinity Home Health Care had about 1,000 patients, according to Smith.
When asked in his deposition how many United Home Care patients went to Carroll Home Health, Danny Jones said, “I don’t know.”
Danny Jones said he also did not know where most of those patients ended up.
In her deposition, Smith said United Home Care’s patients ended up at 10 different home health agencies. She confirmed Carroll Home Health was among those 10 agencies. According to Smith, 350 to 400 of United Home Care’s patients were transferred to an entity in which she or her boyfriend, Mike Eyre, had an interest.
Danny Jones’ income
According to records filed with the U.S. Bankruptcy Court for the Western District of Louisiana, Danny Jones was paid a salary of some $14,000 through Nurses Care HHA Inc. during 2019. His income amounted to some $7,000 in 2018. That meant Danny Jones had made some $21,000 in the time since his exit from United Home Care. In 2017, his income totaled $4.3 million.
In a Dec. 18, 2019 motion for contempt and sanctions against Danny Jones and Smith, Gardner’s attorney, Benson, argued that Danny Jones had worked for Smith after his exit from United Home Care but the pair had concealed the payments to commit bankruptcy fraud and tax evasion.
“To this point: the payments from Ms. Smith to the Debtor (Danny Jones) coincided with the Debtor’s (Danny Jones) companies’ loss of their Medicare provider numbers and with the subsequent transfer a large number of patients from the Debtor companies to Ms. Smith’s company, both of which are (or were at the time) Medicare providers,” stated Benson’s motion for contempt and sanctions.
At the time of the hearing, Danny Jones said he was working at a nursing home in McKinney, Texas. Smith was described as a partial owner of the nursing home.
In his deposition, Danny Jones denied that he had been compensated for his work for Smith.
“You went to work at Carroll immediately after Medicare suspended the payments for United, didn’t you?” Benson said.
“No,” Danny Jones said.
“You never worked at Carroll?” Benson said.
“No,” Danny Jones said.
“Did you act as a consultant for Carroll?” Benson said.
“No,” Danny Jones said.
“Who did you go to work for immediately after UHC closed?” Benson said.
“No one,” Danny Jones said.
“You didn’t do any consulting for Dawne Smith or any company owned by her?” Benson said.
“I was just trying to help make sure that the patients had - discharged safely and that they were taken care of,” Danny Jones said.
In contrast to Danny Jones’ answers, Smith confirmed in her deposition that she helped Danny Jones get work, including work at one of her companies. Smith also said she provided Danny Jones with a room in the house where she lived.
“Now, I think you’ve testified that since UHC and Trinity folded, you have been instrumental in getting Mr. Jones two jobs as an administrator or a consultant, correct?” Benson said.
“Yes, sir,” Smith said.
“And shortly after UHC folded, didn’t he also go to work for one of your companies as a consultant?” Benson said.
“He helped me, yes,” Smith said.
“So that’s a yes?” Benson said.
“Yes,” Smith said.
During the bankruptcy proceeding, Smith produced several records, but none of them showed any “significant payments, gifts, conveyances, or transfers of anything of value” to Danny Jones.
An anonymous envelope suggested a different arrangement, though. In the motion for sanctions, Benson claimed to have received an anonymous envelope containing an excerpt from an American Express statement in the name of Dawne S. Walsworth and Paramount Healthcare (Smith’s company). The American Express statement revealed that Danny Jones had a credit card through the American Express account and had charged $11,582.41 to the account during a one-month billing period.
Benson later obtained credit card statements that showed Danny Jones had charged a total of $113,713.04 to Smith’s Paramount Healthcare account.
“Of course, the fact that both Ms. Smith and the Debtor did not produce these statements, which were clearly responsive to the requests, buttresses the conclusion that both of them intended to mislead and deceive,” stated Benson’s motion for contempt and sanctions. “Undersigned counsel believes that the Debtor concealed these payments in order to effectuate bankruptcy fraud and tax evasion, and to conceal violations of Medicare laws. Undersigned counsel believes that Ms. Smith concealed these payments in order to conceal violations of Medicare laws (and in the process committed bankruptcy fraud).”
Federal laws concerning Medicare make it illegal to receive “any remuneration
. . . in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program . . . .”
During a Dec. 19, 2019 hearing at the U.S. District Courthouse in Monroe, Danny Jones took the stand to answer questions about his income in light of the credit card statements. In a federal bankruptcy case, the U.S. Trustee appoints an impartial case trustee to administer the case. In Danny Jones’ case, Mark Sutton was the Chapter 7 Trustee and was represented at court by Natchitoches attorney Mark Begnaud.
At the hearing, Begnaud asked Danny Jones about numerous charges made through the American Express account. Danny Jones defended the charges as business-related and characterized any personal expenditures made with the American Express card as a mistake.
According to the credit card statements, Danny Jones’ purchases in 2018 included Brookshire’s items over $260, multiple restaurants, Amazon.com merchandise, Amazon.com Video on Demand, Amazon Kindle purchases, a charge for some $383 for medical services from Advanced Surgery Center, a $150 payment to CrossFit West Monroe, a $107.17 payment to a Planet Fitness gym in El Paso, Texas, a payment of $452.95 to Entergy for utility services at a Louisiana address, among many others.
“Did you disclose any of these payments in your bankruptcy schedules?” Begnaud said.
“No, I don’t believe these to be personal,” Danny Jones said.
Begnaud questioned Danny Jones about what his work for Smith entailed.
“I was trying to find business for her,” Danny Jones said.
“What business did you develop for her?” Begnaud said.
“We identified a hospice agency but they didn’t buy it,” Danny Jones said.
Danny Jones’ compensation became the subject of questioning once again.
“Were you compensated in any other way than getting these credit card bills paid?” Begnaud said.
“No,” Danny Jones said.
“So you weren’t working for her?” Begnaud said.
Danny Jones said he was not working for her.
“Is Ms. Smith continuing to let you use this American Express card?” Begnaud said.
“Yes,” Danny Jones said.
In other pleadings filed at the bankruptcy court, Benson pointed out that Danny Jones’ two children worked at Walsworth & Company, a furniture store in West Monroe. Employees at Walsworth & Company were paid through Smith’s company, Paramount Healthcare, she said in her deposition.
According to Benson’s motion for contempt and sanctions, Smith’s company paid each of Danny Jones’ children some $25,000 a year to perform “menial work (if they do any work at all).”