Feds Charge Arvada Man With Fraud At Catholic Health Initiatives

DENVER, CO – An Arvada IT professional was paid in-part with $745,000 in gold coins for his role in a scheme to steal millions from a Catholic hospital system in a software bid-rigging operation, a federal grand jury alleges.

David Paul Rietz, 59, of Arvada and Richard Scott Cartwright, 46, of Goodyear, Arizona were charged Oct. 11 with mail fraud, wire fraud, conspiracy, aiding and abetting and money laundering, a statement from the U.S. Attorney's Office in Denver announced Wednesday.

Rietz and Cartwright appeared in Federal Court on Oct. 15 and 18, respectively, and entered not-guilty pleas. They were released on a personal recognizance bonds. A third defendant, Lyle William Perry, 59, of Lakewood, was charged with conspiracy to commit money laundering on Oct. 12, 2018, and also entered a not-guilty plea.

Rietz, an IT professional, was employed by Englewood-based nonprofit Catholic Health Initiatives (CHI). Cartwright was a principal of Cross IT Group Corporation (Cross IT). The indictment alleges that between September 2013 and January 2014, Rietz and Cartwright conspired to defraud CHI and split the money.

Rietz allegedly arranged that Cross IT was a third-party reseller of necessary software for the hospital system, and hired Cross IT to implement the software, the indictment claims.

The indictment alleges that Cartwright submitted fake “quotes” to CHI for software and services, totaling more than $72 million. Rietz allegedly signed off on the Cross IT quotes. In total, CHI eventually paid Cross IT $19,884,904.28 in four payments, a statement from the U.S. Attorney's office said.

After receiving the CHI payments, Cartwright allegedly laundered money through bank accounts controlled by Perry, supposedly through Perry's company Gradum, Inc. Perry then allegedly kicked back funds to Reitz under the guise of a “finder’s fee” of $1.76 million for a real estate project, a fraudulent computer hardware buy for $590,000, and the purchase of $745,000 in gold coins.

The three defendants face possible sentences of up to 20 years in prison for each count and fines up to $250,000. The Denver Division of the FBI and the IRS Criminal Investigation unit investigated the case, a statement said.

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