David Richards testifies to 'challenges' of being LifeCare CEO in 3rd day on the stand

ELYRIA — Lorain County Common Pleas Judge James Miraldi on Thursday heard a third day of testimony from David Richards in the former LifeCare chief executive officer's theft and records tampering trial. Thursday was also the first chance for the Lorain County Prosecutor's Office to cross-examine Richards, 54, who at times verbally sparred with Assistant Prosecutor Paul Griffin, telling him that few people could understand the difficulty and challenges that came with the top job at LifeCare. Richards testified that during the COVID-19 pandemic, he diversified the company's business activities to help it survive — "instead of just answer 911 calls, which is now all they do," he testified. That was also among the pandemic, with "tenfold" more challenges to LifeCare's existence, he said. One of those challenges was "unions trying to infiltrate us," Richards testified. LifeCare had "fewer people" and more challenges that Richards said fell entirely on him. Pete and Herb De La Porte, who owned LifeCare until it became an employee stock ownership plan, or ESOP, had "none of the challenges I had," Richards testified. Richards appeared indignant at times, including after Griffin questioned whether he simply didn't trust anyone else to help him run the business. There were "nuances within this business the average individual cannot and never will understand," Richards testified. "The average individual does not understand the depth." He told Griffin at one point that "when you don't have those challenges, you don't even know what you're talking about." Richards almost immediately apologized. "That was disrespectful," he said. The trial is a bench trial, meaning there is no jury, and Miraldi will decide Richards' guilt or innocence. The charges are theft and tampering with records, both fourth-degree felonies, though Miraldi has said the law allows him to consider lesser offenses. Elyria police and the Prosecutor's Office alleged that Richards improperly pocketed $27,000 in company funds in 2021 by padding business expense reports. Richards' defense is that he was a hard-working CEO who occasionally made innocent accounting mistakes and included personal expenses in his business expense reports. He has testified he never intended to defraud or mislead LifeCare, an ambulance and medical transport company that serves multiple Lorain County communities. Richards joined the company in 2012 after working for Mercy Health in Lorain, and was elevated to CEO/chief financial officer/chief operating officer in 2019 after the company became employee-owned. Defense attorney Brent English's questions appeared to suggest the dollar amount of mistaken expenses was far less than authorities alleged, and the extent of questioned expenses not as "pervasive" as forensic accountant Greg Blate had suggested. "I know about these now because I've taken to the time to look at them," said Richards, who had previously testified he might have simply made errors when creating expense reports for reimbursement by the company. Two auditing and accounting firms hired by LifeCare never questioned Richards' expense reports, he testified. "Couldn't tell ya," Richards said, when asked how unlabeled company property ended up in his home where it was found by Elyria police during a December 2021 search. Richards admitted "there were many things I could have done better" — such as file more-accurate expense reports. "I think I did to the best of my ability what I had to do," Richards testified. "I'm on trial for my life." The maximum penalty for fourth-degree felonies is six to 18 months in prison, $5,000 in fines. A theft conviction could also require restitution to the victims. Testimony resumes this morning. Contact Dave O'Brien at (440) 329-7129 or dobrien@chroniclet.com.