BURLINGTON — Former Fletcher Allen Health Care president and chief executive officer William Boettcher pleaded guilty Tuesday in federal court to conspiring to defraud a state regulatory agency. He agreed to serve up to two years in prison and repay the Burlington-based medical center more than $733,000. The guilty plea came as a result of a plea agreement Boettcher reached with both federal and state prosecutors, who also believe the 57-year-old conspired to hide the true costs of Fletcher Allen's so-called Renaissance Project from the hospital's 18-member board of trustees. Boettcher on Tuesday, however, did not admit to defrauding trustees, creating speculation that at least some high-ranking board members were aware that the hospital's administration lied to the Vermont Banking, Insurance, Securities and Health Care Administration between 1998 and 2002. Neither Boettcher nor his attorney, Jerome O'Neill, would comment after the court hearing. Prosecutors also declined comment about the board of trustees, saying only that their investigation continues. More people, including other former hospital executives, could soon face charges, prosecutors said. David Kirby, acting U.S. attorney in Vermont, said at a press conference after Tuesday's hearing that details regarding what trustees knew could emerge when Boettcher is sentenced in April. "It is of significance that he was willing to plead to defrauding BISHCA and being a participant in a conspiracy to do that, but not willing to say he had been in a conspiracy to defraud the board of trustees," Kirby said. "We will have to see at the sentencing when facts come out exactly what the significance of that is." The prosecutor said nothing in the plea agreement stipulates Boettcher must cooperate with authorities. He referred to the upcoming sentencing hearing as "litigation" and said the contentious proceeding could last as long as a week. "The investigation continues," Kirby said. "We will have to see how things develop through the sentencing process." Boettcher told state regulators who control hospital spending that the Renaissance Project would cost $173 million when the true cost was more than twice that. The actual $367 million price tag was not discovered until well after construction began. The scandal cost virtually all of the hospital's top executives and board members their jobs, while the project's exorbitant cost maxed out the medical center's borrowing capacity — making other needed improvements impossible to achieve. Boettcher is not the first to be punished for the conspiracy. Fletcher Allen last summer agreed to pay $1 million to avoid civil and criminal claims against the institution, while last fall the hospital's former chief operating officer, Thad Krupa, pleaded guilty in state court to making false statements to regulators. He has yet to be sentenced. The hospital's law firm, Downs, Rachlin, Martin — also believed to be a prosecutorial target — last year returned more than $1 million to Fletcher Allen for failing to adequately represent the hospital during the regulatory process. Bill Schubart was named to the Fletcher Allen board after the scandal broke and is its chairman. He praised the Renaissance Project — which includes a new emergency room, birthing center and ambulatory care center — as good for the state, and declined to pass judgment on Boettcher. "This is a sad chapter at the institution, and people have been yearning for a resolution," Schubart said. "We are pleased there is a restitution element. But as far as judging the criminal justice system, that is for the people to do." The $733,000 Boettcher agreed to pay Fletcher Allen is equal to the severance package he received when he resigned his executive position in 2002. Had Boettcher gone to trial, a guilty verdict could have resulted in up to five years in prison, according to prosecutors, who were also considering other charges besides conspiracy. Boettcher made no statement before Judge William Sessions on Tuesday, but his attorney said he agreed to the plea bargain because the state had a strong case against him. "There is a significant likelihood a court would find Mr. Boettcher guilty," O'Neill said. Vermont Attorney General William Sorrell said the agreement stipulates that the state cannot seek further criminal charges against Boettcher or sue him in civil court. The federal charges are adequate punishment for his crime, he said. "We have rules, and Mr. Boettcher chose not to play by those rules and he will answer for that," Sorrell said. "He walked into the courtroom a free guy with a clean resume — former CEO of one of the biggest health care facilities in the state of Vermont and living on a yacht in Seattle — and he stands right now a convicted felon." Sorrell said it was important that Fletcher Allen's top executive, not just lower management, be brought to justice. "This is the top of the food chain at Fletcher Allen saying 'Yes, I was in a conspiracy with others to lie and mislead the state,'" Sorrell said. "We have the number one guy saying 'Guilty. I did it and conspired with others to do it.' That is a major step for us." Jeanne Keller, a health care watchdog who runs a Burlington-based advocacy and consulting group, helped expose the Fletcher Allen scandal. She attended Boettcher's hearing and was pleased by its outcome, but she hopes more indictments will follow. "For him to accept an agreement with penalties is important," Keller said. "He is going to do time and give back the money, and its probably pretty mortifying for him to be put through this." According to papers filed with the court, Boettcher and other kept two sets of books: one for presentation to state regulators and one for themselves that outlined the real cost of the Renaissance Project. After receiving permission to build, they continued to misrepresent the project's cost saying they had received a "guaranteed maximum price" from contractors that would not exceed $173 million. Court papers also said the conspirators falsely told hospital trustees that the project was on budget, and concealed from them the full cost of a financial agreement they made with the University of Vermont to build an education-center component. "What he did is a serious criminal offense," Sorrell said. "It was important to us that he admit to fraudulent behavior and violation of the public trust. That is what this is all about." Contact John Zicconi at john.zicconi@rutlandherald.com.

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