HMO owner sues to block sale of firm

Charging racism, Chinwuba files case in federal court

Bids are under review

PrimeHealth placed under supervision of state last year

October 08, 1999|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

Charging that he was discriminated against because he is an African-American, the chief owner of a health-care firm placed under state supervision has asked a federal court to block the impending sale of his company by the Maryland Insurance Administration.

Christian E. Chinwuba, a key prosecution witness in the recent trial of former state Sen. Larry Young, filed the civil rights suit this week in U.S. District Court in Greenbelt.

The insurance administration is reviewing proposals submitted by a handful of firms interested in taking over the health maintenance organization, PrimeHealth Corp., which serves about 14,000 Medicaid recipients. Chinwuba and his wife own 81 percent of the company.

Declining to name the bidders, Insurance Commissioner Steven B. Larsen said that the bids are under review, and that a decision on a sale will be made "as soon as possible."

In August 1998, Larsen noted a series of financial irregularities at PrimeHealth in petitioning Baltimore Circuit Court to seize the assets of the firm and place it in receivership. The takeover order was made public last October.

Named as defendants in Chinwuba's suit are Larsen, state Attorney General J. Joseph Curran Jr. and James E. Gordon, the court-approved receiver of PrimeHealth.

In the recent bribery and extortion trial of Young, Chinwuba testified that he paid $72,000 in cash to the former senator, but that he did not consider it a bribe. Young, a radio talk-show host, was acquitted of all charges.

In his suit, Chinwuba charges that the takeover of PrimeHealth last year was improper and unjustified. He also repeated charges made in suits pending in Baltimore City and Prince George's County circuit courts that Larsen improperly released confidential financial information about PrimeHealth to the media.

"Larsen willfully and maliciously released documentary and verbal statements regarding his investigation of PrimeHealth and Chinwuba to the public," the complaint states.

Contending that the information contained "numerous false and unproven allegations," Chinwuba's suit charges that the state officials sought to deprive him and his company of their legal rights "solely because the plaintiffs are African-American-owned companies and Chinwuba is a Nigerian-born U.S. citizen."

Chinwuba's suit asks the federal court to block the state sale and bar further court action authorizing a sale. Chinwuba is seeking $100 million in damages.

Asked to respond to the suit, Larsen said he was confident that "no judge will find that any laws were violated."

He said he was confident that the court would also conclude the agency "has acted properly at all times."

In the federal suit and the parallel case in city court, Chinwuba has charged that the state did not obtain proper consent from PrimeHealth's stockholders before placing the HMO in receivership.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.