Monday, March 01, 1999
Defendant calls off mail fraud plea deal
Prosecutors now must decide on grand jury
BY BEN L. KAUFMAN
The Cincinnati Enquirer
A semiretired Northern Kentucky lawyer last week reneged on his agreement to plead guilty to mail fraud in a dispute over prorating payments to his client's physicians.
Laurence W. Grause, in his late 50s, was to enter his plea before U.S. District Judge Herman J. Weber today.
However, he told the government that he wanted to withdraw from his plea agreement and Judge Weber agreed.
That means Mr. Grause is charged with nothing and has admitted nothing.
Sunday, neither Mr. Grause — who has addresses in Covington and the Sarasota area of Florida — nor his attorney could be reached for comment.
Now the government must decide whether to ask a grand jury to indict Mr. Grause.
Last week, U.S. Attorney Sharon Zealey said the case began when Mr. Grause and another lawyer won a $318,000 settlement for Randall T. Diem in a Cincinnati medical malpractice suit.
Ms. Zealey said the lawyers shared $68,000, and $25,000 was allocated to pay Mr. Diem's medical bills.
Rather than compensate Mr. Diem's medical-care providers fully, Ms. Zealey said, Mr. Grause sent them letters saying $8,915 was available and the lawyers had taken no fees.
Based on those assertions, Ms. Zealey said, Mr. Grause asked the providers to accept 19 percent of what they were owed.
Mr. Grause had agreed to plead guilty to mailing one of those letters rather than risk indictment on multiple counts.
At the time, Mr. Grause's attorney said Mr. Diem allocated $25,000 to pay medical bills but changed his mind and “authorized only the lower amount.”
The plea agreement also obligated Mr. Grause to agree to aid the government's continuing investigation.
Had Mr. Grause kept his word, assistant U.S. attorney Ralph Kohnen said, he had promised to tell Judge Weber about Mr. Grause's “substantial assistance in the investigation or prosecution of others.”
To date, no one else has been charged.
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