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Former World Health exec sentenced to nearly 11 years in $41M fraud case

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Tuesday, Dec. 4, 2012, 5:14 p.m.
 

Living a simple life and helping others is worth some leniency after committing a $41 million fraud, but not as much leniency as an Armstrong County man wanted, a federal judge ruled on Tuesday.

Richard E. McDonald, 38, of Gilpin asked U.S. District Judge Joy Flowers Conti to give him to seven years in prison instead of the minimum 15 years and 8 months he faced under federal sentencing guidelines.

Conti sentenced him to 10 years and 10 months in prison and three years of probation. The judge ordered him to pay $39,140 to a shareholder who filed a victim's claim with prosecutors.

McDonald, the former head of Wilkins-based World Health Alternatives Inc., pleaded guilty in April to wire fraud, securities fraud, certifying false statements to the Securities and Exchange Commission, payroll tax evasion and income tax evasion.

Tina Miller, McDonald's attorney, said that although McDonald “did terrible things,” he has turned his life around, living on a farm and working at a small equipment company.

“When you look at the person before you today, it's a very different person than the president and CEO of World Health,” she said.

McDonald told the judge he began the fraud about two months after becoming president of the medical staffing company because he wanted to appear successful.

“I broke the most basic rule that my parents taught me: Don't worry about what others think of me. Don't try to be the cool kid,” McDonald said.

Conti said she wasn't sure that explanation “absolutely answers why you would engage in this activity.”

Assistant U.S. Attorney Shaun Sweeney said greed is the simpler explanation, since McDonald pocketed about $6 million.

Unlike some white-collar criminals who commit fraud to keep failing companies going or to pay for vices, McDonald had no other motive, Sweeney argued.

“Essentially, every day for 2 12 years, when Mr. McDonald went to work, he lied, cheated and stole from people,” he said.

Sweeney said after the hearing that most shareholders recovered some money through civil litigation and only one filed a claim.

Conti allowed McDonald to remain free on bond, with GPS monitoring, until he reports to prison. He and his attorney declined to comment afterward.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com.

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