VALDOSTA — A former Archbold Medical Center chief financial officer testified in Valdosta U.S. District Court Thursday that submission of fictitious documents to the state began several years ago — with his boss’ knowledge.

Sellers’ boss was Ken B. Beverly, retired Medical Center president and chief executive officer, who is on trial on charges of conspiring to falsify records.

Sellers entered guilty pleas to three counts in a federal indictment almost two years ago in the same Valdosta Federal Building courtroom in which he has been testifying since Wednesday afternoon. He has not been sentenced.

Sellers’ three recordings of conversations with Beverly began after he was suspended from Archbold in November 2007, before he resigned and before Beverly retired in early 2008. The recordings, taking more than two hours, were played in court Thursday.

A six-count federal indictment says Beverly was party to the submission of false documents to the state to receive additional Medicaid funding.

Sellers testified Thursday that he and Beverly also arranged for and submitted fictitious documents to the state to receive indigent care funding.

Sellers’ testimony began at 8 a.m. Thursday with a description of a meeting he attended with his lawyer, the in-house Archbold attorney, a Thomasville lawyer and an attorney from the Atlanta law firm of King & Spalding at a Thomasville law firm.

“There were four questions we had agreed to answer,” Sellers told prosecutor Jim Crane, assistant U.S. attorney.

The prosecution witness said he told the attorneys that Beverly knew about fraudulent Thomasville Hospital Authority minutes and knew the documents were submitted to the Georgia Department of Community Health (DCH).

Sellers said he realized he was in trouble in November 2007, after he gave David Robbins, the in-house Archbold attorney, a file containing fraudulent documents that had been faxed to the state.

“I put it all together and first remembered what I had done,” he said.

Beverly, he said, asked him if he had given Robbins the “private-public hospital file” that contained documents that showed Archbold’s public hospital status necessary to receive additional Medicaid funding.

“He said, ‘Here, you give them that file, the public-private file.’ I said I had forgotten about it,” Sellers testified. He recalled that Beverly said nothing else and left Sellers’ office. Sellers then gave the file to Robbins.

Crane asked Sellers about the “high blood pressure moment.” Sellers responded that the moment came when he saw what was in the file he had given Robbins and remembered he had signed Hospital Authority member Ben Hatcher’s name without Hatcher’s permission.

“My life looked like it was coming apart in front of me. It was a very stressful moment,” the witness explained.

Sellers testified that he signed Hatcher’s name on four sets of Hospital Authority minutes.

In order to receive more Medicaid money, Archbold had to show it was operated by the Hospital Authority.

Sellers said documents sent to the state showed Archbold was owned and operationally controlled by the Hospital Authority. ”That’s a false statement,” he testified. “He (Hatcher) would not have details on what he was signing. He was depending on us not to put bad documents in front of him. … We put fictitious documents in front of him.”

Sellers said he kept Beverly apprised of progress in attempts to obtain the funding. The project, he added, was one of Beverly’s “pet projects.”

“I told him, ‘I’ve sent those minutes in.’ He said, ‘OK.’ He didn’t really have a response to it,” Sellers said.

The purpose, Sellers added, was to make money.

Sellers said he never defied Beverly on an important issue. Beverly, he said, “ruled the roost,” and one did not go against him.

To cross him would result in Beverly reacting, Sellers explained. “He was pretty belligerent to people. He was verbally abusive,” the witness said.

Beverly frequently said Archbold was as public as Phoebe Putney Hospital in Albany and served as many indigent patients, according to Sellers. “ … From a legal status, that was not true,” Sellers said.

Archbold began receiving supplemental Medicaid payments after the state received falsified documentation. It is estimated the facility received more than $10 million.

In 2001 or 2002, Sellers and Beverly met with the then-head of DCH in regard to indigent funding.

“We were seeking to be considered public in the program,” Sellers said. After meeting with the commissioner, a letter signed by Beverly said Archbold was leased form the Hospital Authority. “That was not accurate,” Sellers said.

He said Archbold — as a public hospital — began receiving indigent funding in 2002.

According to Sellers, the Archbold board was not notified about the public status.

“It wasn’t something we were discussing outside the two of us,” he said.

Neither was the public status announced to the public.

“Why not?” Crane asked. Sellers responded that he did not think “we” wanted to be a public hospital, because to do so would require public access to records.

Public status was desired for receiving additional funding, he said, adding, that otherwise, Archbold was private, not for profit.

Another false Hospital Authority document went to DCH in 2004, Sellers said, adding that he signed Hospital Authority member Earl Williams’ name to the document.

“That meeting didn’t occur,” he said. The same was true of a January 2003 meeting. “This meeting did not occur. The people (listed as) attending obviously were not there.”

A Hospital Authority meeting did take place that day, but fake minutes were submitted to the state, Sellers said, adding that he signed Hatcher’s name to the document. He said that two months later, he again signed Hatcher’s name to a phony Hospital Authority document. Yet another was in 2004, he explained.

In November 2004, DCH Commissioner Tim Burgess notified Beverly and Sellers that Archbold’s public status must be confirmed, Sellers recalled.

Fraudulent documents confirming the status went to DCH in December 2004, Sellers said.

“Mr. Beverly was glad that we had overcome the challenge by the department and that we would receive the UPL (Upper Payment Limit) payments,” he said.

Sellers taped conversations with Beverly on his own — after he was suspended and before he resigned three months later. Sellers turned the tapes over to his lawyer and eventually to the FBI.

One of the tapes was made on the sidewalk in front of Thomasville First United Methodist Church after a Sunday worship service.

Sellers told Beverly he hoped that if he kept quiet about what Beverly knew about the phony minutes, that Beverly would support his $2 million pension supplement.

“I’ll do my dead-level best,” Beverly responded.

Sellers testified that his salary as Archbold CFO was $400,000 annually. In addition to losing pension funding, he also did not receive two years of severance pay he had hoped for.

Within 24 to 48 hours after Sellers met with the attorneys, Beverly called him at home about 4 a.m. and wanted to talk. Sellers met with Beverly at his home two hours later.

The former hospital chief made several remarks about Times-Enterprise stories published about the Hospital Authority fraud case. He said attempts were made to keep stories out of the newspaper.

Beverly told Sellers it would be better to “have me on the inside spitting out than outside spitting in,” Sellers said the remark meant Beverly could help him more from a management standpoint if he remained at the Archbold helm.

Beverly told Sellers he was not trying to “throw him under the bus” or set him up.

He said he and Sellers did not need to destroy each other.

Cross-examination of Sellers by the defense begins at 8 a.m. today.