By Billy Davis

David Chandler testified Tuesday that he cooperated with the FBI to secretly tape record conversations with businessman Lee Garner and Ray Shoemaker, the former CEO at Tri-Lakes Medical Center.

What was recorded and admitted on tape — if anything — was left entirely in the air, however, because Senior District Judge Neal Biggers Jr. recessed the late-afternoon proceedings until 9:30 Wednesday morning, when Chandler is expected to continue his testimony for the federal government.

Chandler, the former Panola County administrator, is the U.S. government’s key witness in the three-year-old investigation that alleges conspiracy and fraud dating back to 2004.

He has pleaded guilty to embezzlement and mail fraud as part of a plea agreement, and defense attorneys took turns Tuesday painting his cooperation as a naked attempt to avoid a lengthy prison sentence. 

The federal criminal trial in Oxford began Tuesday morning when a jury of eight men and eight women were seated out of a pool of 55 potential jurors.

At 1:30 p.m.  Assistant U.S. Attorney Charles Spillers laid out the federal government’s case against Garner and Shoemaker, describing a kickback scheme to get Garner’s nurse staffing company more business at Tri-Lakes.

   Chandler was chairman of the hospital board at the time, before it was sold, and Chandler was working with Garner as his accountant.

Spillers said Chandler served as the “middleman” between Garner and Shoemaker, and he was paid a $5 kickback for each hour that was billed to the hospital. The alleged kickbacks involve federal funds, which is why the case is federal, he explained at one point. 

Spillers also alleged Shoemaker later demanded a $25,000 kickback from Garner, though defense attorneys said the $12,000 that Chandler eventually paid to Shoemaker was a loan.

After Spillers’ opening statement, defense attorney Steve Farese lambasted Chandler as a “criminal liar” whose credibility was not to be trusted.

“David Chandler is the most despicable person you’ll ever see,” Farese, who is representing Shoemaker, told jurors at one point.

Defense attorney John Ferrell, representing Garner, followed Farese and described Chandler as an “embezzler,” a “thief” and a “scumbag.”

“He’s one of the most despicable persons you will ever see on a witness stand,” Ferrell told the jury.

After opening statements, Chandler took the stand for approximately an hour and a half, answering questions from Spillers about his alleged “middleman” role.

The federal prosecutor also presented jurors with copies of checks from 2004 to 2007 that totaled $268,000, the alleged kickback money Chandler was paid from Garner’s nursing businesses, first from Guardian Angel and later On-Call Staffing.

The payments to Chandler peaked at one point in 2005 with a single payment of $28,0000 according to court exhibits that were shown. 

Chandler also identified checks he wrote to Shoemaker for the prosecution.

The former county administrator admitted under oath that he schemed Panola County for financial gain, including creating a collection agency for delinquent garbage fees; faking overtime pay; hatching a kickback scheme with an insurance agent; and getting kickbacks from a construction firm that performed roof repairs and other jobs on county buildings.

“It was wrong. I admit that,” Chandler said at one point, which was as close as he came to expressing remorse.

Courtroom testimony also revealed that Chandler is also facing another federal indictment that remains sealed.