By DAMIEN FISHER, InDepthNH.org
During the height of the COVID pandemic DiLuzio Ambulance EMTs were working around the clock, spending up to 100 hours a week helping people sicker than they had ever seen.
The family business that served a vital healthcare function in Cheshire County for 55 years was also struggling with debt and was in dire financial health. It came as no surprise when the company ceased operations this year. A sad ending that seemed inevitable.
But according to the federal complaint filed against Cheshire County’s government, the business did not die a natural death. It was killed off by Cheshire County officials pushing to create its own competing ambulance service after misspending millions in COVID relief funds.
“If they could induce a collapse of (DiLuzio,) they would be free to proceed as a completely new entity (Cheshire EMS) and forgo the embarrassment of admitting they had moved too quickly to acquire equipment and obligate funding,” the complaint states.
But, County officials deny they pushed DiLuzio off the ledge. The business was on its way out whether or not Cheshire County started its own ambulance service, County Administrator Chris Coates said in a statement released last week.
“The County had no choice but to fill the void that was about to be created by DiLuzio’s expected demise by establishing a publicly operated EMS service,” Coates’ statement reads. “Regardless of whether Cheshire EMS was created, County officials believed DiLuzio Ambulance was likely to close due to serious financial troubles with the IRS and no other ambulance service had the capacity or willingness to take over.”
The complaint, filed with the United States Treasury Department, accuses Cheshire County of misusing millions of American Rescue Plan Act money to start the ambulance service and to subsidize contracts so as to harm competing services like the Keene Fire Department’s EMS service.
DiLuzio, though it was key to Cheshire’s emergency health services, had long been in trouble. Not able to keep up with evolving regulations and insurance compensation, the family-run business needed a lifeline.
Flush with federal COVID cash, Coates and others in Cheshire County started exploring a way to keep DiLuzio viable. After failing to find an existing business to merge with DiLuzio, the County started exploring outright buying the service, according to Coates. A sales deal was reached between DiLuzio and Cheshire County, but never signed. A year and a half of negotiations ended after the County found DiLuzio’s financial problems too much to handle.
“The County’s attorney discovered significant liens encumbering DiLuzio’s business assets, including IRS liens, which prevented the County from obtaining clear title to the assets at closing. Additionally, the County’s due diligence could not be completed because of incomplete or inaccurate financial records and audits,” Coates said in his statement.
When the deal fell apart last April, Cheshire County started work on its own ambulance company. Coates called this a necessity for regional health and safety, but the complaint says the County needed to justify spending millions of federal grants on the DiLuzio deal before it was final.
“When those negotiations broke down, (Cheshire County) had prematurely obligated millions of dollars in ARPA funding to the now dead project. Despite county commissioners stating publicly in the Keene Sentinel that they had no intention of competing with (DiLuzio), they initiated a campaign of unethical behavior aimed at financially damaging the family business,” the complaint states.
When the talks between DiLuzio and the County failed, DiLuzio stated it planned to forge ahead and continue operations. But Cheshire County was also interested in moving ahead with its own plans.
Cheshire County started negotiating with Cheshire Medical Center in September of 2022 to take over DiLuzio’s patient transfer contract. According to emails attached to the complaint, Cheshire County officials had been discussing a new contract with the Cheshire Medical Center for the planned County-managed DiLuzio as far back as 2021.
Cheshire EMS started in November of 2022, taking over from DiLuzio as the hospital’s inter-facility transfer provider. This move crippled DiLuzio, taking away a major source of revenue, according to the complaint. That was part of the County’s intent, according to the complaint.
“This is because for nearly two years, the county Government had been privy to the DiLuzio’s personal and business finances as they worked on a negotiation to purchase the assets of the business,” the complaint states.