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June 11, 2014

Judge Finds Contempt Against NE Owners of IA Care Center, Orders 90-Day Jail Sentence

Judge rules Mary Morse-Bolton and husband John Bolton violated a court order barring them from transferring assets

(DES MOINES, Iowa) An Iowa judge Tuesday ordered a Nebraska couple to serve ninety days in jail on contempt charges after the judge ruled the two violated a court order preventing them from transferring property connected to an alleged $3-million-dollar Medicaid debt.

In December, Attorney General Tom Miller filed a lawsuit on behalf of the Iowa Department of Human Service’s Medicaid program against Mary Morse-Bolton, 55, of Plattsmouth, and her companies, Morse Healthcare Services Inc. (doing business as Faith Ridge Life Center), Morse Enterprises Inc. (doing business as Kevington Lane), Manor of Malvern Inc., and Kevington Lane Inc.  Morse-Bolton owns Kevington Lane, a 21-bed residential care facility in Sidney, and Faith Ridge Life Center, a 51-bed nursing facility in Malvern.  Both facilities are now closed.

The lawsuit sought appointment of a receiver, an injunction preventing the defendants from transferring assets, and for the defendants to disclose their finances and holdings.

On February 13, Polk County District Court Judge Mary Pat Gunderson granted the state’s request and ordered a receiver, Klaasmeyer & Associates, of Omaha, to take over finances and the facilities’ health care services.  The judge also issued an injunction prohibiting Morse-Bolton from transferring property or assets and required Morse-Bolton and her facilities to disclose assets and liabilities to the state.

On February 19, Klaasmeyer determined that both facilities were in “financial peril” and unable to continue to operate.

In two subsequent hearings in Polk County District Court, a Klaasmeyer representative testified that in mid-February:

  • At Kevington Lane, there was no propane gas for heating or cooking;
  • The Faith Ridge Life Center fire alarm system was not working;
  • The Faith Ridge Life Center was not providing federally required dietary and therapy services to its residents;
  • At both facilities all bank accounts were overdrawn, there was no money for payroll, and federal and state payroll taxes were overdue.
  • At Faith Ridge, Klaasmeyer found $1,940 in $20 bills in a desk drawer with the name of a resident on it.  Klaasmeyer investigated and determined the resident had died in February 2013, but the resident’s cremated remains were being held at a local funeral home unburied due to non-payment.

Following Klaasmeyer’s written report and testimony, on February 28 Judge Gunderson granted the receiver permission to “wind down” both facilities.

On March 31, Miller’s office alleged that, based on a confidential tip that the Cass County, Nebraska Register of Deeds later verified, Morse-Bolton violated the February 13 court order by transferring her interest in two Nebraska properties to her husband, John Bolton, 64, for one dollar each.  Miller’s office also alleged other violations of the order.

The state alleged that Morse-Bolton’s actions were “willful and in direct violation” of the February 13 court order.  The state also alleged that John Bolton “aided, abetted, or otherwise encouraged Mary Morse-Bolton’s contempt.”

On Tuesday, Judge Gunderson found Morse-Bolton and Bolton in contempt and ordered them to report to the Polk County jail on Friday to serve a sentence of ninety days.  Judge Gunderson found Morse-Bolton and Bolton acted “willfully” and “with a blatant and brash disregard for the Court’s order.” Morse-Bolton and Bolton deny they are guilty of contempt and both indicated they plan to appeal the ruling.

Last month, in a criminal case related to the care facilities but separate from the contempt case, the Fremont County Sheriff arrested Morse-Bolton and her daughter, Kristine Anne Morse, 29, of Sidney.  Mary Morse-Bolton faces seven felony charges and one misdemeanor charge, including ongoing criminal conduct, theft and fraud.  Kristine Morse faces 19 aggravated misdemeanor charges of tampering with records, and one count of fraudulent destruction, removal or concealment of recordable instruments.

A criminal charge is merely an accusation and the defendants are presumed innocent until and unless proven guilty.


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