Prison healthcare firm YesCare shady corporate structure exposed
TENNESSEE, UNITED STATES — Newly uncovered court documents reveal the corporate modus employed by YesCare, which provides healthcare services to prisons.
Corizon, YesCare’s predecessor, utilized a legal maneuver called the “Texas Two-Step” to avoid liability from over 1,000 lawsuits alleging neglect and mistreatment of inmates under its care. By splitting the company into two different entities:
- YesCare took on the profitable operations and contracts
- A new company called Tehum Care Services was created to hold the debt and legal liabilities
As YesCare took on operations and contracts worth more than $300 million, Tehum then declared bankruptcy, allowing YesCare to continue operating while the lawsuits against it were paused.
Other documents showed that just nine months before Tehum filed for bankruptcy, Corizon reported almost $34 million in gross profit for 2021. The document projects that Corizon will clear between $24.9 million and $27 million annually over the next five years.
As of November 2022, YesCare had 21 active jail or prison contracts in a dozen states and oversaw the health of more than 39,000 prisoners. Since then, it has lost two contracts and won a massive $1 billion Alabama contract to serve over 20,000 prisoners.
The documents also reveal that YesCare agreed to pay millions annually to obscure companies controlled by insiders.
One such company was secretly owned by the troubled nursing home chain Genesis Healthcare as of late 2022. Legal experts describe this unusual arrangement as highly suspicious.
One expert stated, “The corporate structure appears to have been designed to divert profits and evade accountability.”
Creditors have suggested consolidating YesCare’s assets with its bankrupt affiliate Tehum to increase funds available for settling lawsuits from current and former prisoners alleging medical negligence.
