Springfield Men Who Owned TX Hospital Get 5 Years in Tax Case

(Lubbock, TX) -- Two Springfield men who operated a small hospital in Texas that went bankrupt are sentenced to five-year prison terms for tax convictions.

U.S. District Judge Sam R. Cummings sentenced Herschel A. Breig, 64, and James Cheek, 64, each to 60 months in federal prison and ordered them to pay $5,049,875.62 in restitution.

Breig and Cheek are accused of failing to forward payroll taxes to the U.S. Department of Treasury. They each pleaded guilty in February to one count of failure to pay over payroll taxes and aiding and abetting, related to their operation of Highland Medical Center in Lubbock, Texas.

The men took control of HMC in March 2006, purchasing it under the company Shiloh Health Services. Cheek was the founder, executive officers and president of Shiloh; Breig served as vice-president and secretary. Both currently live in Springfield.

According to court documents, HMC withheld payroll taxes from employees' paychecks between 2006 and 2008. However, from December 2006 through May 2008, HMC allegedly made no payments to the IRS.

U.S. officials say Breig admitted that he had a duty to collect, to truthfully account for and to pay over the payroll taxes that were withheld from HMC employees.

Check admitted that payroll taxes were withheld from employees and that he willfully failed to truthfully account for and pay over the payroll taxes.

Breig and Cheek have also paid a total of $120,000 in restitution to individual victims. They remain in federal custody.

Grace Clinic bought Highland Medical Center in 2009.