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As much as 50 percent of the Tyler Medicaid fraud division's files were destroyed in July when a server being repaired by a state vendor wouldn't restart. The scope of the damage is in dispute, The Dallas Morning News reported Wednesday in its online editions.

Losing the documents means evidence crucial to convicting dishonest health care providers who ripped off the state's health insurance program for the poor may never be recovered. E-mails and other records obtained by the newspaper indicate some Tyler investigators lost up to 90 percent of their open case files.

"In spite of earlier assurances, the destruction of critical data has, in fact, occurred," First Assistant Attorney General Kent Sullivan wrote Monday in an e-mail to Brian Rawson, chief of the Department of Information Resources. Attorney General Greg Abbott's office "cannot afford to risk a reoccurrence of this event."

In all, 81 criminal cases and eight months of work in the attorney general's 13-person Tyler Medicaid fraud office were completely lost, according to an attorney general's report on the security breach. Those records are being painstakingly recovered by the vendor, the newspaper reported.

In 2006 Texas signed a $863 million seven-year contract with IBM Corp. designed to streamline the information technology operations of 27 state agencies.

"We do take this incident seriously, and we're taking appropriate steps to ensure that it doesn't occur again," said IBM company spokesman Jeff Tieszen.

Tieszen said IBM-hired data recovery specialists have reassembled as much as 88 percent of the lost gigabytes of information.

State officials, according to the newspaper, disagreed with IBM's recovery estimate, saying at least half of the data remains lost.

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