Stateside wired Melendez $51,843 in February 2007 and sent him an additional $51,943 the next month, according to the hospital's lawsuit. Those wire transfers took place shortly after Melendez authorized two payments of $52,000 apiece to Stateside. Later in 2007, Taylor wrote him another check, for $25,000. Taylor and Melendez don't dispute those payments.
In October 2010, an arbitrator found that Stateside engaged in "unlawful and fraudulent business practices" by paying Melendez to gain improper advantages in its contracts. The arbitrator awarded the hospital $1 million in damages, interest and legal fees.