Former LifeCare chief takes the stand in his theft, tampering trial

ELYRIA — Former LifeCare head David Richards took the stand in his defense on Thursday in his trial for theft by deception and tampering with records in Lorain County Common Pleas Court. Richards, 54, of Lorain is accused of improperly charging LifeCare Investments Inc. $27,000 in reimbursements while serving as the company's chief executive officer in 2021. LifeCare operates several ambulance companies within Lorain County. The defense, led by attorney Brent English, took the lead on Thursday after the prosecution rested its case the previous day. English opened by making a motion to dismiss the case, asking that Judge James Miraldi throw it out due to a lack of evidence. "Absent (any) evidence of any knowing deception at all, you cannot convict a person in this situation," English said. "Particularly retroactively of having allegedly been (making) requests for reimbursement that were knowingly false … this is in fact a civil matter, it is clearly not a criminal matter at all." The alleged improper expenses charged by Richards were first pointed out by Richard Pozywak, LifeCare's director of information technology and a member of the company's Board of Directors. Pozywak brought that information to Elyria police, which launched an investigation. English argued that rather than go through the provided data himself, Elyria police detective Adam Garvin simply copied the data Pozywak provided and flagged all the same expenses that Pozywak had marked as suspicious. "I have already pointed out to you that there is highly suspicious evidence in this case about whether (Garvin) did anything he claimed to have done," English said. "I'm not calling him (Garvin) a liar, perhaps he misunderstood, perhaps he doesn't recall, but the facts are very dubious as to whether he undertook any kind of investigation." Garvin previously testified that his investigation uncovered improper expenses charged by Richards as well as the discovery of property that was missing from LifeCare facilities at Richards' home. The defense has acknowledged that there were incorrect charges within Richards' expense reports in 2021, but English contended that these were honest mistakes due to Richards' desire to get through the paperwork so he could focus on running the company. He said there was no evidence of malice or intentional deceit, and laid out a number of reasons he said Richards' expense report mistakes could have been "innocently erroneous." "There are some errors, which we concede," English said. "I want to point out to you, given the process which was followed, why these expense statements could well more easily be (mistakes) more than nefarious actions by my client." Assistant Lorain County Prosecutor Mark Koza took issue with this contention, saying that no matter how busy Richards was, he had a duty to properly document and accurately charge his expenses to the company. "We're not saying he wasn't busy, but we do know that ultimately this sloppiness got to the point, as we saw in (expert witness Greg Blate's) report, that it became so pervasive that he knew he was getting away with it," Koza said. "He knew he was putting personal expenses on here." English also argued that Richards would not have known the charges he filed were inappropriate because the system LifeCare had in place to check such expenses was flawed. Richards' expenses as CEO had never been questioned and prior witnesses had acknowledged that other people at the company had access to the company credit cards which Richard used. Koza countered that the reason that there wasn't a good system in place was because Richards had not allowed the Board of Directors to meet and establish such policies. The charges were never flagged before the criminal investigation, Koza added, because Richards had no oversight as head of the company. "We do have what Mr. Richards said in his interview (with police), you have it," Koza said. "(Richards said) 'Yeah I probably did them half-ass. I wasn't questioned and I didn't have any problems so I just assumed they were good.' He knew what he was getting away with, your Honor." Rather than making mistakes in haste, Koza argued that Richards had specifically noted that expenses were marked as meals with clients or co-workers, but those same people testified that such meals never occurred. Miraldi ruled that the prosecution had produced enough "issues of fact" for the trial to move forward, denying the defense's motion to dismiss the case. After the motion to dismiss was denied Richards took the stand in his own defense, something it was unclear if he would do after the prosecution rested on Wednesday. English's examination of his client was cut short on Thursday afternoon, but Richards was able to lay out how he came to work for LifeCare and how he became its CEO when former owners Pete and Herb De La Porte left the company. Richards said he was elevated to head of the company from his prior role as chief financial officer when ownership of the company transferred from Pete and Herb De La Porte to being an employee stock ownership plan (ESOP). English asked his client if he had ever been questioned about expenses he charged to the company before the De La Portes retired. Richards said that there was. "There was a time that I had put too much clothing on (my expense report) for a period of time," Richards said. "I just wanted to change the image of the organization, and I had started to do that through taking our store and making it really more than what it was." Richards said that he had wanted to make more formal LifeCare branded clothing available in the company store, and had charged those expenses to the company, which the De La Portes took issue with. The trial was wrapped for the day before Richards could expand his recounting of that incident. Richards is expected to retake the stand on Monday at 1 p.m. for the resumption of his defense testimony, and for cross-examination from the prosecution to follow. Miraldi is set to retire at the end of the year and he told both sides that the case needed to be completed by Dec. 27. Contact Owen MacMillan at (440) 329-7123 or omacmillan@chroniclet.com.