OLDTOWN — The Idaho Department of Health & Welfare is suing Newport Ambulance to recover $128,500 in grant funding that was allegedly misspent.

The action also seeks to pierce the company’s corporate veil and hold its chief executive officer, Steve Groom, personally liable for damages, according to the suit filed in 1st District Court on Friday.

Deputy Attorney General Robert Adelson contends Newport Ambulance requested and was given grant funding through the Idaho EMS Bureau to purchase a new ambulance and two motorized gurneys in 2015. The grant funding was approved and string attached to the money required Newport Ambulance to purchase the vehicle and gurneys.

“Instead, the taxpayers’ money was apparently used for Newport’s personnel costs and other business and personal expenses,” Adelson said in the suit.

The suit alleges breach of contract and unjust enrichment.

A message seeking comment from Groom was not immediately returned on Friday afternoon.

The Oldtown-based nonprofit announced in August that it taking a “time out” from ground transportation services because of funding problems based on numerous nonpayments, under- or uninsured residents and issues related to the Internal Revenue Service. The company did not elaborate any further.

Bonner County EMS made arrangements to ensure that residents in southwestern were covered, according to spokesman Bob Abbott. The “There was no lapse in coverage,” Abbott said on Friday.

Newport Ambulance, which had been a contract provider of EMS response and transport for the county since 2005, announced that it was discontinuing operations for financial reasons, effective Sept. 1.

The BCEMS Advanced Life Support ambulance stationed in Priest River will respond to medical emergencies in the former Newport coverage area and beginning Oct. 1, Spirit Lake Fire District will respond south on Highway 41 to mile marker 35.3, Bonner EMS Director Bob Bussey said.

Spirit Lake currently responds south to mile marker 27 on Highway 41.

There are contingencies in place for continuity of response in case of a catastrophic failure of a contracted agency in the BCEMS Strategic Plan, Bussey said, noting that it had been almost eight years to the day that Priest River Ambulance ceased operations and BCEMS immediately stepped in to provide services to the west side of the county.

“That was one of the primary reasons the Board of County Commissioners decided to make delivery of EMS services a county function in 2005,” Bussey said. “So that there would never again be a circumstance in which Bonner County residents had to worry if there would be an ambulance there when they needed it.”