By Melissa Brown

Federal prosecutors on Monday arrested and charged State Rep. Jack Williams and former Alabama Republican Party Chairman Martin Connors in a public corruption investigation stemming from a 2016 insurance coverage scheme.

Williams, R-Vestavia Hills, and Connors, now a lobbyist, were arrested at their respective homes and appeared in federal court in Montgomery. In handcuffs shackled to their waists, Williams and Connors both told the judge they understood the charges against them.

Assistant United States Attorney Jonathan S. Ross said both men would be released Monday, with unsecured bails set at $25,000. An arraignment hearing has been set for April 18.

Williams and Connors are charged alongside G. Ford Gilbert, the CEO of California-based healthcare company Trina Health. All three face charges of conspiracy to commit bribery related to federal programs, conspiracy to commit honest services wire fraud and honest services wire fraud.

Gilbert, who was arrested in California Monday, is also charged with health care fraud and interstate travel in aid of racketeering.

The charges stem from a 2016 scheme to force Blue Cross/Blue Shield, the state's largest insurer, to cover treatments provided by Trina's three diabetes clinics in Alabama.

Trina's clinics used an "artificial pancreas treatment" which provided intravenous insulin injection therapy for treating diabetes. The treatment was not FDA-approved, and in 2009 the Centers for Medicare and Medicaid Services announced it would not cover the costs of similar therapies.

Many private health care plans followed suit, according to Monday's indictment, including BC/BS.

The federal indictment alleges Gilbert made multiple payments to former Alabama House Majority Leader Micky Hammon in an effort to push a bill through the Legislature's 2016 session.

Gilbert also offered to pay Hammon's $240,000 debt with Regions Financial Corporation, according to court documents.

Hammon pleaded guilty last year to felony charges of misusing campaign funds and is currently serving three months in federal prison. Though his is frequently cited in Monday's indictment, prosecutors said he isn't charged due to his previous conviction in federal court.

In 2014, Hammon was gifted an ownership in a Trina Health subsidiary in exchange for finding investments and a clinic space for a Birmingham-area clinic. Two Baldwin County clinics were already open and profitable, the indictment states, because Trina Health used billing codes to skirt BC/BS rules regarding artificial pancreas treatments.

BC/BS discovered the scheme and in August 2015, Gilbert told Birmingham clinic investors that the insurer would be unlikely to reimburse for the treatment in the future.

"Gilbert assured the investors that he was capable of causing BCBS-AL to reconsider its position," the indictment reads.

Hammons received nearly $30,000 in wire transfers from Gilbert during this time period.

Gilbert hired Connors to lobby a bill in the Legislature, the indictment alleges, when Connors knew of the payments to Hammon.

The House legislation would have forced insurance companies to cover intravenous insulin infusions at medical clinics and offices, not just hospitals.

Williams, who chaired the House's Commerce and Small Business Committee, was recruited to hold a public hearing on the bill. Williams met with Gilbert and was aware of Hammon's financial issues, prosecutors say.

"Williams also knew of the payments to Hammon and acted in part to help Hammon, who, as everyone in the scheme knew, was experiencing grave financial problems," a Department of Justice release states.

BCBS fought the bill at the time, and it died in committee.

Gilbert tried to introduce similar legislation in the 2017 Legislature, but Hammon refused to support another bill. All three Trina Health clinics closed in 2017.

Williams was first elected to the House of Representatives in 2004. He said last year he wouldn't seek reelection to his seat and later announced his candidacy for the Jefferson County Commission.

Connors served as the Alabama Republican Party chairman from 2000 to 2005.

Monday's arrests are the latest in a string of elected officials' misdeeds in Alabama.

Former House Speaker Mike Hubbard, R-Auburn, was convicted in June 2016 of ethics violations and forced out of office. Former Gov. Robert Bentley, caught up in a scandal involving his relationship with a former aide, pleaded guilty to two campaign finance violations in April 2017 and resigned.

Former Alabama Chief Justice Roy Moore -- a candidate for Alabama's U.S. Senate seat -- lost his job in September 2016 after ordering probate judges to not issue same-sex marriage licenses. Former Rep. Oliver Robinson, D-Birmingham, has pleaded guilty to accepting bribes to fight an attempt to list a polluted area in his district on an EPA priority list.

Advertiser reporter Brian Lyman contributed to this story.

(c)2018 the Montgomery Advertiser (Montgomery, Ala.)