By JACK HEALY
Published: June 18, 2009
Four years ago, Richard M. Scrushy, the former chief executive of HealthSouth, walked out of a federal courthouse in Alabama and thanked God that he had been acquitted of criminal charges that he defrauded the company. But on Thursday, a state judge still found Mr. Scrushy responsible for the fraud and ordered him to pay $2.9 billion to the company’s shareholders.
In his decision, the judge, Allwin E. Horn, declared that Mr. Scrushy knew about and took part in concocting false financial statements that inflated HealthSouth’s earnings to meet Wall Street’s expectations and to buoy the stock.
The fraud ran for seven years, totaled $2.7 billion and was “remarkable and perhaps unique” in its size and scope, the judge wrote.
“Scrushy was the C.E.O. of the fraud,” Judge Horn wrote.
The ruling was a coda on an era of scandals at companies like Enron, WorldCom, Tyco International and ImClone.
“This is the last chapter in the great epic drama of major corporate scandals that we saw in the last 10 years,” said Robert J. Mintz, a former federal prosecutor who followed Mr. Scrushy’s criminal trial. “It in some ways closes the book on the wave of unprecedented corporate fraud we saw. This one has dragged out even longer than Enron.”
For prosecutors who failed to win a conviction of Mr. Scrushy and shareholders whose HealthSouth shares crumbled after the fraud was unmasked, the judge’s decision offered a belated, if anticlimactic, vindication.
“He was the orchestrator of this fraud,” said Alice H. Martin, the United States attorney who unsuccessfully prosecuted Mr. Scrushy on 36 criminal counts. Ms. Martin is retiring on Friday. “That’s what I’m calling my retirement gift.”
While Mr. Scrushy’s criminal trial in 2005 was a five-month drama that fascinated many in Alabama and drew throngs of reporters to the courtroom, this civil trial was a quieter proceeding. It lasted two weeks and was decided by a judge, and Mr. Scrushy was often not even present.
Mr. Scrushy had already been sentenced to nearly seven years in prison for bribing a former governor of Alabama, and he spent much of the civil trial in a holding cell away from the courtroom, lawyers said. He appeared in court only to testify in his own defense.
Lawyers said the judgment was the first time that Mr. Scrushy had been found liable in any courtroom for his actions at HealthSouth, which operates dozens of rehabilitation clinics and hospitals across the country. He has already been ordered to pay fines and to repay millions of dollars in bonuses. Several other executives of HealthSouth have been convicted in the case.
Mr. Scrushy has maintained his innocence and has said he knew nothing about the fraud. His lawyers did not return calls for comment on Thursday, but other lawyers connected to the case said they expected Mr. Scrushy to appeal. He is appealing his criminal conviction in the bribery case.
Lawyers for HealthSouth and shareholders said they were poised to go after Mr. Scrushy’s assets, but it is doubtful they will ever squeeze anything close to $2.9 billion from him. Mr. Scrushy has sold his shares of HealthSouth — which closed at $13.02 on Thursday — and was estimated to have $275 million in assets in 2005, said John Haley, a lawyer for shareholders.
“The only thing that remains now is collecting on it,” said Donald Q. Cochran, a law professor at Samford University in Birmingham, Ala.
Showing posts with label Financial Services. Show all posts
Showing posts with label Financial Services. Show all posts
Friday, June 19, 2009
Saturday, October 4, 2008
Link NCFE to Financial and Healthcare FRAUD!
All you have to do is go to the trial currently in Colimbus Ohio, NCFE>
You can verify the link between the financial and healtcare industries.
No doubt one of the leading issues in this election is the question of health care coverage. For working Americans apart from losing their job there is no greater fear than inability to pay for their health care costs. Each year the number of working Americans who are uninsured gets closer to 50% and even for those that have some form of coverage it is often inadequate to their needs. The Democratic and Republican Plans are significantly different in their ways to address this issue. Which is better prescription for America?
First lets clarify what are the current problems?
Note enough people are currently covered by any plan.Any solution has to significantly include basically the whole of the population. We can longer have a system of “charity’ that assumes that providers and hospitals will donate to the needy. This system assumes the old concept of ability of pay based upon an individuals income is still in place. By definition for it to work requires that those who can pay more will pay higher prices to subsidize the care of the uninsured or under insured. This has created a disaster in health care because it makes it impossible to know what are the real prices in health care. How did it ever occur that private payers, Medicare, and health insurance can pay very different fees to the same provider for the same service. Most of the people who have health insurance are over the age of forty. The system will always be under capitalized unless the vast majority of young workers begin paying into system which is the major problem with a program that leaves too many not participating. For this reason the concept that Hillary Clinton recommended of “pay or play” is a sound construct.
Coverage varies widely too much between plans. Consumers cannot compare pricing of insurance plans because there is no real standard for what the term ‘insurance’ means. The reality is that none of us can ever be correct about what predicting our future medical expenses will be. Opting for a ‘cheap’ high deductible plan even for a healthy 20 year old can be a nightmare if out of the blue he or she is suddenly involved in a major automobile accident or delivers a premature baby. To call something a legal medical insurance plan means that it has to cover major conditions reasonably well within the income of the individual covered. Who is going to oversee this to prevent another crisis similar to the subprime loan fiasco?
Making health insurance job based limits the consumers options for alternatives and creates problems when there is a change in the job status.
The current system of job based insurance began during World War II as a simple way to give the public coverage who mostly worked in large war related industries. It did not envision that a majority of Americans would be working for small business or that adults may change jobs seventeen times or more in a lifetime. Labor unions played a great role in advocating the need for health care of their workers and often health care benefits become the key point of corporate-labor negotiations. But now it plays too much of role in the fight of whether labor should be unionized or not. The American auto industry has been rendered severely non-competitive by high health care costs which would be lower if they were shared in a larger risk pool than just one company or industry. McCain is right in not making health insurance job based.
The economy is weak and there is limited funds for health care. Every year our society gets older and our medical technology gets more expensive. Although health care is a necessity for a civilized nation it is not an industry that really improves the overall production of wealth. We can only expend so much of our overall budget as a nation on health care. Expense or overpriced treatments that are not proven to be clearly of value cannot be afforded. We have to mandate more complete coverage for proven effective treatment of conditions which are life threatening and minimize or exclude coverage of unproven treatment of conditions which are unlikely to benefit from such treatment. While many people cannot get enough coverage for the treatment of cancer, billions of dollars are wasted every year in operations and treatment of chronic pain conditions that are likely of no real benefit. However, one cannot be an advocate for health care without understanding that the most important single factor in determing whether health care is affordable is the health of the economy.
There are conflicting reports from recognized “think-tanks” about which plan would be best.
To evaluate the candidates’ proposals, the Commonwealth Fund Commission identified “several key principles for moving the health system toward high performance. They include:provision of equitable and comprehensive insurance for all;provision of benefits that cover essential services with appropriate financial protection;premiums, deductibles, and out-of-pocket costs are affordable relative to family income;health risks are broadly pooled;the proposals should be simple to administer, with coverage that is automatic and continuous;dislocation should be kept to a minimum—people could choose to keep the coverage they have; and financing should be adequate, fair, and shared across stakeholders.” Measured against these broad principles,they continue, Obama’s proposal for mixed private–public group insurance with a shared responsibility for financing has” greater potential to move the health care system toward high performance than does McCain’s proposal to encourage individual market coverage through the use of tax incentives and deregulation. Compared with McCain’s approach, Obama’s approach could provide more people with affordable health insurance that covers essential services, achieve greater equity in access to care, realize efficiencies and cost savings in the provision of coverage and delivery of care, and redirect incentives to improve quality. In the absence of a requirement that everyone has affordable coverage, however, the proposal is likely to fall short of achieving universal coverage.”
Robert E. Moffit, Ph.D., is Director of the Center for Health Policy Studies at The Heritage Foundation says the Obama Plan is “Not the Right Prescription”. He states “Proponents of government competition in a “national health insurance exchange” claim that it would enhance personal choice and health plan competition. That is highly unlikely. Rather, such a system would impose federal control over virtually every aspect of private health insurance, rendering it virtually indistinguishable from government insurance except for its direct financing. Congress would become increasingly prescriptive over benefits, the adoption of medical technology and new medical procedures, the pricing of these items, and the mechanism that plans may or may not use to manage health care risks. In other words, hardly any aspect of private health plans’ business operations would be free from government regulation and control. That is not a prescription for health care choice or competition.”
In my opinion, there is good and bad in both the McCain and Obama plans. Unfortunately, neither plan really addresses the most important issue of determining how much money will be paid for what. The medical system as it is currently structured is filled with waste and maybe some fraud. The Wall Street financial crisis may be a mouse compared to the elephant of the health care industry. Many health care insurance CEOs are actually even better paid that Wall Street executives. These days the most expensive car in the “doctor’s parking lot” does not belong to the heart surgeon but usually the hospital administrator. Even if you believe that physicians are over paid, many studies have shown that given the number of years of training and hours worked they are not, there is no doubt that nurses are severely underpaid. Yet some of the fastest growing salaries in America are those of health care executives at every level which more often than not have nothing to do with performance. Physicians must be allowed to develop appropriate standards of what care should be covered in the same manner that has resulted in the Veteran’s Hospitals going from once being thought of as substandard to now being leaders in the care of chronic conditions such as diabetes.
At the same time I agree with Dr. Moffit that making the government a competitor against insurance companies will serve no purpose.The biggest obstacle to private health care is the fact that it is appropriately a right. Mandated services to the public such as fire departments, schools, and garbage disposal must be highly regulated and overseen if they provided privately. For these types of services there is a very real issue as to whether competition is necessary or functional. Health care by definition cannot really be a “profitable” venture because it does not produce wealth it is a social good. Fostering competition in the American health care community has resulted in too many hospitals being too close together with many redundant services. Does it make sense for every doctor’s office to have its own office equipment, waiting room, and billing staff which add significantly to their overheads. False notions about competition make it very difficult for doctors to deal with insurance companies because of anti- trust laws.These types of administrative costs add trillions to the overall cost of health care and tend to make hospitals general centers of overall care but limit the possibility of creating real regional center of expertise.
Finally as Sarah Palin said in the recent Vice-Presidential debate, there is the issue of personal responsibility. As a retired physician who has practiced not only in the United States but visited in other countries I have seen that Americans are unique in demanding often unnecessary services. Injured workers go to court to ask for thousands of dollars for massage treatments that no one really feels will be of any benefit. Many chronic conditions are treated with drugs and therapy treatments which are no more effective than placebos. Obesity, smoking, alcohol abuse, and reckless behavior are more than just a drop in the bucket of overall health expenditures. Americans have to think of themselves as being members of a large extended family with only one budget that needs to be used for the good of us all and not the gluttony of one.
Go To Contempo Magazine Home Page
You can verify the link between the financial and healtcare industries.
No doubt one of the leading issues in this election is the question of health care coverage. For working Americans apart from losing their job there is no greater fear than inability to pay for their health care costs. Each year the number of working Americans who are uninsured gets closer to 50% and even for those that have some form of coverage it is often inadequate to their needs. The Democratic and Republican Plans are significantly different in their ways to address this issue. Which is better prescription for America?
First lets clarify what are the current problems?
Note enough people are currently covered by any plan.Any solution has to significantly include basically the whole of the population. We can longer have a system of “charity’ that assumes that providers and hospitals will donate to the needy. This system assumes the old concept of ability of pay based upon an individuals income is still in place. By definition for it to work requires that those who can pay more will pay higher prices to subsidize the care of the uninsured or under insured. This has created a disaster in health care because it makes it impossible to know what are the real prices in health care. How did it ever occur that private payers, Medicare, and health insurance can pay very different fees to the same provider for the same service. Most of the people who have health insurance are over the age of forty. The system will always be under capitalized unless the vast majority of young workers begin paying into system which is the major problem with a program that leaves too many not participating. For this reason the concept that Hillary Clinton recommended of “pay or play” is a sound construct.
Coverage varies widely too much between plans. Consumers cannot compare pricing of insurance plans because there is no real standard for what the term ‘insurance’ means. The reality is that none of us can ever be correct about what predicting our future medical expenses will be. Opting for a ‘cheap’ high deductible plan even for a healthy 20 year old can be a nightmare if out of the blue he or she is suddenly involved in a major automobile accident or delivers a premature baby. To call something a legal medical insurance plan means that it has to cover major conditions reasonably well within the income of the individual covered. Who is going to oversee this to prevent another crisis similar to the subprime loan fiasco?
Making health insurance job based limits the consumers options for alternatives and creates problems when there is a change in the job status.
The current system of job based insurance began during World War II as a simple way to give the public coverage who mostly worked in large war related industries. It did not envision that a majority of Americans would be working for small business or that adults may change jobs seventeen times or more in a lifetime. Labor unions played a great role in advocating the need for health care of their workers and often health care benefits become the key point of corporate-labor negotiations. But now it plays too much of role in the fight of whether labor should be unionized or not. The American auto industry has been rendered severely non-competitive by high health care costs which would be lower if they were shared in a larger risk pool than just one company or industry. McCain is right in not making health insurance job based.
The economy is weak and there is limited funds for health care. Every year our society gets older and our medical technology gets more expensive. Although health care is a necessity for a civilized nation it is not an industry that really improves the overall production of wealth. We can only expend so much of our overall budget as a nation on health care. Expense or overpriced treatments that are not proven to be clearly of value cannot be afforded. We have to mandate more complete coverage for proven effective treatment of conditions which are life threatening and minimize or exclude coverage of unproven treatment of conditions which are unlikely to benefit from such treatment. While many people cannot get enough coverage for the treatment of cancer, billions of dollars are wasted every year in operations and treatment of chronic pain conditions that are likely of no real benefit. However, one cannot be an advocate for health care without understanding that the most important single factor in determing whether health care is affordable is the health of the economy.
There are conflicting reports from recognized “think-tanks” about which plan would be best.
To evaluate the candidates’ proposals, the Commonwealth Fund Commission identified “several key principles for moving the health system toward high performance. They include:provision of equitable and comprehensive insurance for all;provision of benefits that cover essential services with appropriate financial protection;premiums, deductibles, and out-of-pocket costs are affordable relative to family income;health risks are broadly pooled;the proposals should be simple to administer, with coverage that is automatic and continuous;dislocation should be kept to a minimum—people could choose to keep the coverage they have; and financing should be adequate, fair, and shared across stakeholders.” Measured against these broad principles,they continue, Obama’s proposal for mixed private–public group insurance with a shared responsibility for financing has” greater potential to move the health care system toward high performance than does McCain’s proposal to encourage individual market coverage through the use of tax incentives and deregulation. Compared with McCain’s approach, Obama’s approach could provide more people with affordable health insurance that covers essential services, achieve greater equity in access to care, realize efficiencies and cost savings in the provision of coverage and delivery of care, and redirect incentives to improve quality. In the absence of a requirement that everyone has affordable coverage, however, the proposal is likely to fall short of achieving universal coverage.”
Robert E. Moffit, Ph.D., is Director of the Center for Health Policy Studies at The Heritage Foundation says the Obama Plan is “Not the Right Prescription”. He states “Proponents of government competition in a “national health insurance exchange” claim that it would enhance personal choice and health plan competition. That is highly unlikely. Rather, such a system would impose federal control over virtually every aspect of private health insurance, rendering it virtually indistinguishable from government insurance except for its direct financing. Congress would become increasingly prescriptive over benefits, the adoption of medical technology and new medical procedures, the pricing of these items, and the mechanism that plans may or may not use to manage health care risks. In other words, hardly any aspect of private health plans’ business operations would be free from government regulation and control. That is not a prescription for health care choice or competition.”
In my opinion, there is good and bad in both the McCain and Obama plans. Unfortunately, neither plan really addresses the most important issue of determining how much money will be paid for what. The medical system as it is currently structured is filled with waste and maybe some fraud. The Wall Street financial crisis may be a mouse compared to the elephant of the health care industry. Many health care insurance CEOs are actually even better paid that Wall Street executives. These days the most expensive car in the “doctor’s parking lot” does not belong to the heart surgeon but usually the hospital administrator. Even if you believe that physicians are over paid, many studies have shown that given the number of years of training and hours worked they are not, there is no doubt that nurses are severely underpaid. Yet some of the fastest growing salaries in America are those of health care executives at every level which more often than not have nothing to do with performance. Physicians must be allowed to develop appropriate standards of what care should be covered in the same manner that has resulted in the Veteran’s Hospitals going from once being thought of as substandard to now being leaders in the care of chronic conditions such as diabetes.
At the same time I agree with Dr. Moffit that making the government a competitor against insurance companies will serve no purpose.The biggest obstacle to private health care is the fact that it is appropriately a right. Mandated services to the public such as fire departments, schools, and garbage disposal must be highly regulated and overseen if they provided privately. For these types of services there is a very real issue as to whether competition is necessary or functional. Health care by definition cannot really be a “profitable” venture because it does not produce wealth it is a social good. Fostering competition in the American health care community has resulted in too many hospitals being too close together with many redundant services. Does it make sense for every doctor’s office to have its own office equipment, waiting room, and billing staff which add significantly to their overheads. False notions about competition make it very difficult for doctors to deal with insurance companies because of anti- trust laws.These types of administrative costs add trillions to the overall cost of health care and tend to make hospitals general centers of overall care but limit the possibility of creating real regional center of expertise.
Finally as Sarah Palin said in the recent Vice-Presidential debate, there is the issue of personal responsibility. As a retired physician who has practiced not only in the United States but visited in other countries I have seen that Americans are unique in demanding often unnecessary services. Injured workers go to court to ask for thousands of dollars for massage treatments that no one really feels will be of any benefit. Many chronic conditions are treated with drugs and therapy treatments which are no more effective than placebos. Obesity, smoking, alcohol abuse, and reckless behavior are more than just a drop in the bucket of overall health expenditures. Americans have to think of themselves as being members of a large extended family with only one budget that needs to be used for the good of us all and not the gluttony of one.
Go To Contempo Magazine Home Page
Tuesday, September 9, 2008
"...health care fraud drives up medical costs" Really?
Friday, September 5, 2008
Study suggests health care fraud drives up medical costs
Birmingham Business Journal
While health care companies are spending billions on construction, a recent study has found that health care fraud may be one of the biggest factors driving up health care costs, to the tune of billions of dollars, new research indicates.
Resolved health care fraud cases alone in the previous decade involved $9.3 billion in damages paid to both federal and state government, according to researchers at Brigham and Women’s Hospital.
Results of the study are slated to be published in the Sept. 2 issue of the Annals of Internal Medicine.
But the researchers said the data suggest that there is likely much more unrecognized fraud still going on within the health care system, adding countless inefficiencies that drive up costs.
Study suggests health care fraud drives up medical costs
Birmingham Business Journal
While health care companies are spending billions on construction, a recent study has found that health care fraud may be one of the biggest factors driving up health care costs, to the tune of billions of dollars, new research indicates.
Resolved health care fraud cases alone in the previous decade involved $9.3 billion in damages paid to both federal and state government, according to researchers at Brigham and Women’s Hospital.
Results of the study are slated to be published in the Sept. 2 issue of the Annals of Internal Medicine.
But the researchers said the data suggest that there is likely much more unrecognized fraud still going on within the health care system, adding countless inefficiencies that drive up costs.
Friday, August 15, 2008
US Rep. Ileana Ros-Lehtinen rejects Medicare fraud remedy....
You wonder why?
"...fraud seems to be a major industry in South Florida..."
"...billions of dollars defrauded from Medicare...."
"...Ros-Lehtinen has banked $180,000 from Big Pharma and HMOs."
NOW Commect the dots to FINANCIAL & HEALTHCARE FRAUD!
JUST LOOK AT THE TRIAL, dubbed by Fed Prosecutors as Largest Private Fraud Case in the history of America:
Poulsen was president, chairman, chief executive officer and an owner of Dublin, Ohio-based NCFE, one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.
After the witness tampering indictment was returned, Poulsen’s fraud trial was severed from the other NCFE defendants. Poulsen will face the fraud charges at trial scheduled to begin Oct. 1, 2008. Demmler's sentencing date has not yet been set. Both men have been in custody since their arrests.
The case is being prosecuted by Assistant U.S. Attorney Doug Squires and Trial Attorneys Leo Wise and Nathan Dimock of the Criminal Division’s Fraud Section. The case was investigated by the FBI.
Go to: http://biggerthanenron.blogspot.com
Tuesday, August 12, 2008
US Rep. Ileana Ros-Lehtinen rejects Medicare fraud remedy
The Miami Herald is outdoing itself lately with investigations. As the staff shrinks, will the good work still have a chance to continue? The answer will have telling effect on our civic culture, and on the jail population. Fewer crooks will be incarcerated if the Herald isn’t able to keep on exposing fraud.
In fact, fraud seems to be a major industry in South Florida. Look at two of our most important economic sectors:
· Real estate. Mortgage fraud on all sides has been exposed in the Herald as a reason for the steep rise of home prices a few years ago and now the drop. This was accomplished by our neighbors the bankers, mortgage brokers, borrowers and lenders. Working together and individually to get rich like good Americans or just to be housed, they came close to wrecking the whole national economy. Rampant was the word the Herald used to characterize the level of mortgage fraud.
· Health care. Now the Herald has chronicled billions of dollars defrauded from Medicare – that’s from our pockets, fellow citizens – by our neighbors, the fraudsters. This was billions annually in South Florida, not the whole country. An incredible haul. Perhaps it explains the big houses and fancy yachts in our splendid part of the land.
And what is the remedy? Congress! At least in the case of Medicare fraud. So it says on the front page of Monday’s Herald. Headline: Fraud Remedy Denied.
Headlines often are written in the passive voice without full verb forms. Let’s do a little exercise here and put this in the active voice. Congress Denied Fraud Remedy.
As the Herald’s Jay Weaver reported exhaustively, the Medicare agency tried repeatedly for more money to combat fraud, and Congress always throttled the attempt. Weaver shows fine enterprise in interviewing two local members of Congress to delve into the reasons.
Interestingly, Republican Sen. Mel Martinez is on the good side (first-termer behavior?) of this issue, and is backing legislation to stop fraud. He says $1 invested in anti-fraud measures will yield $10 in fraud-reduction, the Herald reports.
Then Weaver turns to my congresswoman, Rep. Ileana Ros-Lehtinen, FL-18, in the U.S. House since 1989, and she speaks out of both sides of her Republican mouth. Medicare needs help to fight fraud, but it’s risky for lawmakers to give money to an agency recognized for incompetence, she says:
“If you increase the money for oversight, then it looks like you’re fattening up the bureaucracy, even when it’s really for oversight and fighting fraud,” she said. “It’s a difficult choice.”
She then chose according to the ideology of small-government-is-best, and voted against it.
Perhaps it’s not ideology. Campaign donations could be another motivation. And thanks to research from the Florida Democratic Party, we have some detail on Ros-Lehtinen’s connection to Medicare fraud via past donations for her re-election.
From an FDP news release last week:
“In 1998, the largest home health care provider in South Florida was charged with bilking Medicare for more than $45 million in fake services. The company's founder had been a donor to Ileana Ros-Lehtinen's campaign for re-election to Congress.
“Congress did have the opportunity to fight back against Medicare fraud before it reached crisis proportions, but Ros-Lehtinen voted against allowing Congress to pursue its Constitutionally-mandated oversight role. In 1995, she voted for the so-called Medicare Preservation Act (HR 2421, Roll Call 731, 1995). The Act that Ros-Lehtinen voted for "crippled the efforts of law enforcement agencies to control health-care fraud abuse in the Medicare program," according to the then-inspector general of the Department of Health and Human Services.
“Even then, Ros-Lehtinen voted with the Republican Party line and against the best interest of the people of her district, a pattern that continues almost 15 years later.”
The FDP release reports that Ros-Lehtinen has banked $180,000 from Big Pharma and HMOs.
The charge:
“Ros-Lehtinen is either complicit or easily bamboozled, but any way you cut it she has no business representing South Florida in the United States Congress,” said Eric Jotkoff, FDP spokesman.
http://eyeonileana.blogspot.com/2008/08/us-rep-ileana-ros-lehtinen-rejects.html
"...fraud seems to be a major industry in South Florida..."
"...billions of dollars defrauded from Medicare...."
"...Ros-Lehtinen has banked $180,000 from Big Pharma and HMOs."
NOW Commect the dots to FINANCIAL & HEALTHCARE FRAUD!
JUST LOOK AT THE TRIAL, dubbed by Fed Prosecutors as Largest Private Fraud Case in the history of America:
Poulsen was president, chairman, chief executive officer and an owner of Dublin, Ohio-based NCFE, one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.
After the witness tampering indictment was returned, Poulsen’s fraud trial was severed from the other NCFE defendants. Poulsen will face the fraud charges at trial scheduled to begin Oct. 1, 2008. Demmler's sentencing date has not yet been set. Both men have been in custody since their arrests.
The case is being prosecuted by Assistant U.S. Attorney Doug Squires and Trial Attorneys Leo Wise and Nathan Dimock of the Criminal Division’s Fraud Section. The case was investigated by the FBI.
Go to: http://biggerthanenron.blogspot.com
Tuesday, August 12, 2008
US Rep. Ileana Ros-Lehtinen rejects Medicare fraud remedy
The Miami Herald is outdoing itself lately with investigations. As the staff shrinks, will the good work still have a chance to continue? The answer will have telling effect on our civic culture, and on the jail population. Fewer crooks will be incarcerated if the Herald isn’t able to keep on exposing fraud.
In fact, fraud seems to be a major industry in South Florida. Look at two of our most important economic sectors:
· Real estate. Mortgage fraud on all sides has been exposed in the Herald as a reason for the steep rise of home prices a few years ago and now the drop. This was accomplished by our neighbors the bankers, mortgage brokers, borrowers and lenders. Working together and individually to get rich like good Americans or just to be housed, they came close to wrecking the whole national economy. Rampant was the word the Herald used to characterize the level of mortgage fraud.
· Health care. Now the Herald has chronicled billions of dollars defrauded from Medicare – that’s from our pockets, fellow citizens – by our neighbors, the fraudsters. This was billions annually in South Florida, not the whole country. An incredible haul. Perhaps it explains the big houses and fancy yachts in our splendid part of the land.
And what is the remedy? Congress! At least in the case of Medicare fraud. So it says on the front page of Monday’s Herald. Headline: Fraud Remedy Denied.
Headlines often are written in the passive voice without full verb forms. Let’s do a little exercise here and put this in the active voice. Congress Denied Fraud Remedy.
As the Herald’s Jay Weaver reported exhaustively, the Medicare agency tried repeatedly for more money to combat fraud, and Congress always throttled the attempt. Weaver shows fine enterprise in interviewing two local members of Congress to delve into the reasons.
Interestingly, Republican Sen. Mel Martinez is on the good side (first-termer behavior?) of this issue, and is backing legislation to stop fraud. He says $1 invested in anti-fraud measures will yield $10 in fraud-reduction, the Herald reports.
Then Weaver turns to my congresswoman, Rep. Ileana Ros-Lehtinen, FL-18, in the U.S. House since 1989, and she speaks out of both sides of her Republican mouth. Medicare needs help to fight fraud, but it’s risky for lawmakers to give money to an agency recognized for incompetence, she says:
“If you increase the money for oversight, then it looks like you’re fattening up the bureaucracy, even when it’s really for oversight and fighting fraud,” she said. “It’s a difficult choice.”
She then chose according to the ideology of small-government-is-best, and voted against it.
Perhaps it’s not ideology. Campaign donations could be another motivation. And thanks to research from the Florida Democratic Party, we have some detail on Ros-Lehtinen’s connection to Medicare fraud via past donations for her re-election.
From an FDP news release last week:
“In 1998, the largest home health care provider in South Florida was charged with bilking Medicare for more than $45 million in fake services. The company's founder had been a donor to Ileana Ros-Lehtinen's campaign for re-election to Congress.
“Congress did have the opportunity to fight back against Medicare fraud before it reached crisis proportions, but Ros-Lehtinen voted against allowing Congress to pursue its Constitutionally-mandated oversight role. In 1995, she voted for the so-called Medicare Preservation Act (HR 2421, Roll Call 731, 1995). The Act that Ros-Lehtinen voted for "crippled the efforts of law enforcement agencies to control health-care fraud abuse in the Medicare program," according to the then-inspector general of the Department of Health and Human Services.
“Even then, Ros-Lehtinen voted with the Republican Party line and against the best interest of the people of her district, a pattern that continues almost 15 years later.”
The FDP release reports that Ros-Lehtinen has banked $180,000 from Big Pharma and HMOs.
The charge:
“Ros-Lehtinen is either complicit or easily bamboozled, but any way you cut it she has no business representing South Florida in the United States Congress,” said Eric Jotkoff, FDP spokesman.
http://eyeonileana.blogspot.com/2008/08/us-rep-ileana-ros-lehtinen-rejects.html
Corporate billing fraud and abuse costs over $200 billion a year.
Health Care Politics by Ralph Nader
Posted on August 14, 2008 by dandelionsalad
Dandelion Salad
by Ralph Nader
Aug. 14, 2008
One of my favorite monthly publications is Registered Nurse – the journal of the fast growing, progressive California Nurses Association (CNA) – a union that stands up for patients rights and well-being.
The June 2008 issue contains stories that illustrate how this nurses group takes stands. On June 19, the CNA sponsored street rallies for its Medicare for all (single-payer with free choice of doctor and hospital) in San Francisco and a dozen other major cities around the nation.
For over a decade these nurses have made full Medicare for all their major goal. They have run voter initiatives, lobbied legislatures and have opposed sweetheart labor-management deals like those embraced by the Service Employees International Union – SEIU. (SEIU also opposes single-payer health insurance which is supported by a majority of physicians and the American people.)
The June magazine describers the autocratic native of SEIU toward its members and how its leader, Andy Stern, cuts labor deals with large corporate employers that shockingly deprive workers of normal union rights.
Here is an example of what CNA says:
“In exchange for access to more dues units, SEIU gave California nursing home operators the “exclusive right” to set all pay rates, working conditions, speed up and reassign work, eliminate jobs at will, and outsource union work.”
“SEIU also agreed to support legislation limiting patient’s right to sue over care abuses, to oppose reforms to require better staffing for patients safety, and to never report health care code violations.”
Stern rejected single-payer health insurance at his recent union convention. Senator Barack Obama has declined to propose single-payer as well. SEIU is pouring tens of millions of dollars to elect Senator Obama President. CNA works to eliminate “the insurance nightmare through establishing a high-quality, single payer healthcare system. (See: http://www.guaranteedhealthcare.org/blog)
The current health care industry is a wasteful, redundant, defrauding mess costing Americans over 2.2 trillion this year and hundreds of thousands of avoidable injuries, fatalities and serious infections a year. The honest, competent caregivers are on the edge of despair, unable to do their best work due to the domination and control of commercial-profit priorities which include denial of care by these corporations.
People die or get sicker sometimes when they are denied health care. People die when they cannot afford health insurance – 18,000 Americans a year according to the Institute of Medicine
Corporate billing fraud and abuse costs over $200 billion a year. Ask Malcolm Sparrow of the Kennedy School at Harvard University or read his book License to Steal.
Do you ever hear John McCain or Barack Obama focus public attention on these tragedies and rip-offs of consumers and taxpayers?
The employers of health insurance companies, hospital chains and drug industry are pouring money into the coffers of these two men and their parties.
Strange as it many seem, on June 26, 2008 even the principled, independent California Nurses Association fell in line with the AFL-CIO. The CNA endorsed Senator Barack Obama.
Well, Senator Obama doesn’t have to worry a minute about CNA’s nurses putting up one of their famous critical demonstrations at his events. He can continue dialing for corporate dollars.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
see
The Mother Of All Paradoxes: The American Social Model
Single-Payer Universal Health Care Advocates at Annapolis Event
Health Care
Posted on August 14, 2008 by dandelionsalad
Dandelion Salad
by Ralph Nader
Aug. 14, 2008
One of my favorite monthly publications is Registered Nurse – the journal of the fast growing, progressive California Nurses Association (CNA) – a union that stands up for patients rights and well-being.
The June 2008 issue contains stories that illustrate how this nurses group takes stands. On June 19, the CNA sponsored street rallies for its Medicare for all (single-payer with free choice of doctor and hospital) in San Francisco and a dozen other major cities around the nation.
For over a decade these nurses have made full Medicare for all their major goal. They have run voter initiatives, lobbied legislatures and have opposed sweetheart labor-management deals like those embraced by the Service Employees International Union – SEIU. (SEIU also opposes single-payer health insurance which is supported by a majority of physicians and the American people.)
The June magazine describers the autocratic native of SEIU toward its members and how its leader, Andy Stern, cuts labor deals with large corporate employers that shockingly deprive workers of normal union rights.
Here is an example of what CNA says:
“In exchange for access to more dues units, SEIU gave California nursing home operators the “exclusive right” to set all pay rates, working conditions, speed up and reassign work, eliminate jobs at will, and outsource union work.”
“SEIU also agreed to support legislation limiting patient’s right to sue over care abuses, to oppose reforms to require better staffing for patients safety, and to never report health care code violations.”
Stern rejected single-payer health insurance at his recent union convention. Senator Barack Obama has declined to propose single-payer as well. SEIU is pouring tens of millions of dollars to elect Senator Obama President. CNA works to eliminate “the insurance nightmare through establishing a high-quality, single payer healthcare system. (See: http://www.guaranteedhealthcare.org/blog)
The current health care industry is a wasteful, redundant, defrauding mess costing Americans over 2.2 trillion this year and hundreds of thousands of avoidable injuries, fatalities and serious infections a year. The honest, competent caregivers are on the edge of despair, unable to do their best work due to the domination and control of commercial-profit priorities which include denial of care by these corporations.
People die or get sicker sometimes when they are denied health care. People die when they cannot afford health insurance – 18,000 Americans a year according to the Institute of Medicine
Corporate billing fraud and abuse costs over $200 billion a year. Ask Malcolm Sparrow of the Kennedy School at Harvard University or read his book License to Steal.
Do you ever hear John McCain or Barack Obama focus public attention on these tragedies and rip-offs of consumers and taxpayers?
The employers of health insurance companies, hospital chains and drug industry are pouring money into the coffers of these two men and their parties.
Strange as it many seem, on June 26, 2008 even the principled, independent California Nurses Association fell in line with the AFL-CIO. The CNA endorsed Senator Barack Obama.
Well, Senator Obama doesn’t have to worry a minute about CNA’s nurses putting up one of their famous critical demonstrations at his events. He can continue dialing for corporate dollars.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
see
The Mother Of All Paradoxes: The American Social Model
Single-Payer Universal Health Care Advocates at Annapolis Event
Health Care
Wednesday, August 13, 2008
Healthcare & Investment Firms......Canyou connect this one?
Below is an exerpt posted in this week's Newsweek : http://www.newsweek.com/id/151727/page/2
The Pickens Profile You Haven't Read
Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)
Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."
Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy,
Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.
Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.
By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.
But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.
According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003
JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)
Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?
The Pickens Profile You Haven't Read
Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)
Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."
Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy,
Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.
Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.
By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.
But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.
According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003
JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)
Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?
Thursday, August 7, 2008
Medicaid Paid $373,810.65 .......
A Dallas woman, Rebecca Swanson, who owned and operated a drug and alcohol counseling service in Dallas, pled guilty in federal court to health care fraud and aiding and abetting. Swanson faces a maximum statutory sentence of 10 years in prison, a $250,000 fine and restitution arising from all relevant conduct.
A federal grand jury indicted Swanson, in February on one count of conspiracy to commit health care fraud and four counts of health care fraud, and a warrant was issued for her arrest. In May she was arrested and she has been in federal custody since that time.
From April 2001 to August 2003, Swanson owned and operated Life Share Therapy Foundation (LSTF), a counseling services business located first in Dallas and then later in Lancaster, Texas. She made financial decisions for the business and controlled LSTF’s bank account. In May 2001 LSTF was granted a Texas Medicaid provider number was approved by Medicaid to render counseling services through a Medicaid program known as School Health and Related Services (SHARS). Services available under SHARS included counseling for children who had suffered emotional, psychological, or other forms of abuse. Medicaid reimbursed providers of such counseling a preset rate for each 15-minute segment of counseling services rendered.
From May 2001 through August 2003, Swanson, using LSTF’s Medicaid provider number, executed a scheme to defraud Texas Medicaid by submitting fraudulent claims falsely representing that LSTF had provided individual counseling services through SHARS to Medicaid clients, when in fact, they had not. Swanson’s fraudulent claims also falsely represented that the Medicaid clients for whom the claims were submitted had suffered child abuse, emotional abuse or psychological abuse. Each bogus claim submitted by Swanson sought reimbursement for multiple 15-minute segment counseling sessions, falsely representing that the duration of each session had been no less than one hour and as long as two hours.
Rebecca Swanson admitted that a result of the fraudulent claims she submitted through LSTF, Medicaid paid a total of $373,810.65 to LSTF. Swanson admits using these funds for her own personal use.
A federal grand jury indicted Swanson, in February on one count of conspiracy to commit health care fraud and four counts of health care fraud, and a warrant was issued for her arrest. In May she was arrested and she has been in federal custody since that time.
From April 2001 to August 2003, Swanson owned and operated Life Share Therapy Foundation (LSTF), a counseling services business located first in Dallas and then later in Lancaster, Texas. She made financial decisions for the business and controlled LSTF’s bank account. In May 2001 LSTF was granted a Texas Medicaid provider number was approved by Medicaid to render counseling services through a Medicaid program known as School Health and Related Services (SHARS). Services available under SHARS included counseling for children who had suffered emotional, psychological, or other forms of abuse. Medicaid reimbursed providers of such counseling a preset rate for each 15-minute segment of counseling services rendered.
From May 2001 through August 2003, Swanson, using LSTF’s Medicaid provider number, executed a scheme to defraud Texas Medicaid by submitting fraudulent claims falsely representing that LSTF had provided individual counseling services through SHARS to Medicaid clients, when in fact, they had not. Swanson’s fraudulent claims also falsely represented that the Medicaid clients for whom the claims were submitted had suffered child abuse, emotional abuse or psychological abuse. Each bogus claim submitted by Swanson sought reimbursement for multiple 15-minute segment counseling sessions, falsely representing that the duration of each session had been no less than one hour and as long as two hours.
Rebecca Swanson admitted that a result of the fraudulent claims she submitted through LSTF, Medicaid paid a total of $373,810.65 to LSTF. Swanson admits using these funds for her own personal use.
Monday, July 21, 2008
James K. Happ
JULY 16, 2008 11:43AM
Healthcare co. exec sells in Palm Beach Gardens
by C.J. Marks, BlockShopper Staff
42 Bermuda Lake Dr.James K. Happ and his wife, Julie, sold a home at 42 Bermuda Lake Drive in Palm Beach Gardens to Charles and Andrea Hirsch for $789,000 on June 23.
The Happs paid $590,000 for the property in Sept. 2003.
Mr. Happ, a certified public accountant, has served as president of Med Diversified, Inc., a provider of home healthcare services based in Andover, Mass. He was named to the position in 2002.
Before he joined Med Diversified, he served as executive vice president of National Century Financial Enterprises, a healthcare financing company and major lender of Med Diversified. He has also served as chief financial officer of Dallas-based Columbia Homecare Group, Inc.
He earned a B.S. in business administration from Miami University in Oxford, Ohio. He holds an M.B.A. from Nova University in Ft. Lauderdale.
The Haps bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 on June 24.
Home sales in Palm beach Gardens dropped nearly 14 percent in 2008 versus sales in 2007. The median sales price also fell from $320,000 to $290,000.
Address: 42 Bermuda Lake Drive
Buyer(s): Charles J Hirsch and Andrea F Hirsch
Seller(s): James K Happ and Julie K Happ
Sale date: 2008-06-23
Healthcare co. exec sells in Palm Beach Gardens
by C.J. Marks, BlockShopper Staff
42 Bermuda Lake Dr.James K. Happ and his wife, Julie, sold a home at 42 Bermuda Lake Drive in Palm Beach Gardens to Charles and Andrea Hirsch for $789,000 on June 23.
The Happs paid $590,000 for the property in Sept. 2003.
Mr. Happ, a certified public accountant, has served as president of Med Diversified, Inc., a provider of home healthcare services based in Andover, Mass. He was named to the position in 2002.
Before he joined Med Diversified, he served as executive vice president of National Century Financial Enterprises, a healthcare financing company and major lender of Med Diversified. He has also served as chief financial officer of Dallas-based Columbia Homecare Group, Inc.
He earned a B.S. in business administration from Miami University in Oxford, Ohio. He holds an M.B.A. from Nova University in Ft. Lauderdale.
The Haps bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 on June 24.
Home sales in Palm beach Gardens dropped nearly 14 percent in 2008 versus sales in 2007. The median sales price also fell from $320,000 to $290,000.
Address: 42 Bermuda Lake Drive
Buyer(s): Charles J Hirsch and Andrea F Hirsch
Seller(s): James K Happ and Julie K Happ
Sale date: 2008-06-23
Tuesday, July 15, 2008
Since Poulsen's trial is now set to begin Oct. 1, it pushes the trial of James K. Happ, another former National Century executive....
Now why is this delay for Happ occurring? After the NOVEMBER election of course. Does any reporter really know where Happ is form or what his job at NCFE really was? If so, no one has yet to connect the dot!
Who does Happ really know? (Hint: Bush Connection)
The former CEO of National Century Financial Enterprises Inc. has successfully put off his trial on fraud-related charges by two months.
A federal judge ruled Friday that Lance Poulsen, the leader of the Dublin-based health-care financing company before it collapsed in 2002, will begin facing charges of securities fraud and conspiracy on Oct. 1 instead of Aug. 4. U.S. District Court Judge Algenon Marbley granted Poulsen's July 7 continuance request after Poulsen's attorneys argued they needed more time to review 40 boxes of documents the government is scheduled to make available between now and August.
"A two-month continuance will ensure that Poulsen has the time to obtain and review the documents that he plausibly claims are central to his theories of defense," Marbley wrote in his July 11 order.
Since Poulsen's trial is now set to begin Oct. 1, it pushes the trial of James K. Happ, another former National Century executive, to Dec. 1. Poulsen and Happ have both pleaded not guilty.
Poulsen, 65, co-founded National Century in 1991, building it into a major health-care financing company. It specialized in buying receivables from medical providers at a discount, which gave the health-care businesses the quick cash they needed. The receivables were then packaged as asset-backed bonds and sold to investors.
But National Century fell into Chapter 11 bankruptcy six years ago. The Justice Department alleged Poulsen and other executives ran a sophisticated Ponzi scheme that bilked investors out of nearly $2 billion. Poulsen pleaded not guilty to charges of conspiracy, securities fraud, wire fraud, money laundering conspiracy and concealment of money laundering.
Five other former National Century executives were found guilty in March of running a multiyear securities fraud at National Century. Poulsen was scheduled to go on trial with them, but his day in court on those charges was delayed because the government also accused him of trying to tamper with a witness.
Shortly after the March convictions of the five executives, Poulsen stood trial on the witness tampering charges. A jury found him and an associate, Karl Demmler, guilty of trying to bribe a government witness who is planning to testify against Poulsen in his securities fraud trial.
Who does Happ really know? (Hint: Bush Connection)
The former CEO of National Century Financial Enterprises Inc. has successfully put off his trial on fraud-related charges by two months.
A federal judge ruled Friday that Lance Poulsen, the leader of the Dublin-based health-care financing company before it collapsed in 2002, will begin facing charges of securities fraud and conspiracy on Oct. 1 instead of Aug. 4. U.S. District Court Judge Algenon Marbley granted Poulsen's July 7 continuance request after Poulsen's attorneys argued they needed more time to review 40 boxes of documents the government is scheduled to make available between now and August.
"A two-month continuance will ensure that Poulsen has the time to obtain and review the documents that he plausibly claims are central to his theories of defense," Marbley wrote in his July 11 order.
Since Poulsen's trial is now set to begin Oct. 1, it pushes the trial of James K. Happ, another former National Century executive, to Dec. 1. Poulsen and Happ have both pleaded not guilty.
Poulsen, 65, co-founded National Century in 1991, building it into a major health-care financing company. It specialized in buying receivables from medical providers at a discount, which gave the health-care businesses the quick cash they needed. The receivables were then packaged as asset-backed bonds and sold to investors.
But National Century fell into Chapter 11 bankruptcy six years ago. The Justice Department alleged Poulsen and other executives ran a sophisticated Ponzi scheme that bilked investors out of nearly $2 billion. Poulsen pleaded not guilty to charges of conspiracy, securities fraud, wire fraud, money laundering conspiracy and concealment of money laundering.
Five other former National Century executives were found guilty in March of running a multiyear securities fraud at National Century. Poulsen was scheduled to go on trial with them, but his day in court on those charges was delayed because the government also accused him of trying to tamper with a witness.
Shortly after the March convictions of the five executives, Poulsen stood trial on the witness tampering charges. A jury found him and an associate, Karl Demmler, guilty of trying to bribe a government witness who is planning to testify against Poulsen in his securities fraud trial.
Saturday, July 5, 2008
How would you expose the FRAUD ?
Before you read this , answer the question: How would one EXPOSE the FRAUD that is so EVIDENT in our HEALTH CARE SYSTEM?
The Dark Side of Whistleblowing
Neil Weinberg, 03.14.05
The government makes whistleblowers filthy rich for ferreting out fraud on the job.
Douglas Durand is the paragon of a corporate whistleblower. Shortly after stepping in as vice president of sales at TAP Pharmaceutical Products in early 1995, he began to suspect the company was conspiring with doctors to overcharge the federal government’s Medicare program by tens of millions of dollars. But instead of trying to fix the problem, he spent seven months gathering evidence of supposed fraud. Then he quit in 1996 and filed a secret lawsuit against TAP. One motive: If he could prove the company was dirty, he would share a nice chunk of any money TAP paid back to the feds.
He spent eight years helping the government build its own case against the company, visiting prosecutors in four states and testifying before a grand jury in Boston. He compiled a list of alleged TAP conspirators and then called these former colleagues while the FBI listened in. Moreover, Durand later filed suit making similar allegations against a TAP rival, the former Zeneca Inc. The feds ultimately joined him, filing civil and criminal charges against TAP and prodding it into paying the government $885 million to settle the case–six times as much as the claimed overcharges. Douglas Durand cashed in: He received $126 million from the U.S. government. Now age 53, he retired and lives with his wife and daughter in the tony enclave of Tarpon Springs, Fla.
Yet TAP itself was never accused of submitting bogus Medicare bills; it was charged under a little-known provision that holds medical suppliers accountable if others falsely bill the government for the suppliers’ products. On Oct. 3, 2001, the day prosecutors announced the settlement, they filed criminal fraud charges accusing TAP executives of perpetrating the overbilling scheme. This “sends a very strong signal to the pharmaceutical industry,” the prosecutor in the case, Michael Sullivan, publicly declared at the time.
Then Durand’s story began to fall apart. As the trial of a dozen TAP employees played out last year, defense attorneys poked holes in Durand’s claims. Kickbacks he said TAP paid to doctors never happened. Price hikes he had accused the firm of imposing to overcharge Medicare hadn’t actually taken place. A fancy conference Durand had described as a way to bribe doctors into selling TAP’s drugs was in fact paid for by the attendees themselves.
In July a federal jury in Boston declared all the defendants not guilty. The judge then tossed out a guilty plea entered before trial by Kimberlee Chase, a TAP sales manager charged with bribing a health maintenance organization. The judge ruled that federal antikickback statutes don’t apply to HMOs, so Chase hadn’t committed a crime. Never mind that those same HMO-related allegations had been key to the government’s case against the company. It was the third time in eight years that all the employees indicted in such cases were exonerated after their employers paid big fines–Caremark coughed up $161 million and Blue Cross Blue Shield of Illinois $144 million.
So it goes in the Byzantine world of whistleblowers. In the post-Enron era, these self-appointed do-gooders are granted breathless audiences by Congress, extolled on national television and lauded by Time magazine as Persons of the Year. But some whistleblowers are motivated by greed, willing to stretch the truth for profit. That owes to the whistleblower law, adopted in 1986, that hands informants as much as a 30% cut of any money recouped by the government. It was pushed by a public-interest lawyer who then launched a practice for whistleblower cases, pocketing millions (see box, p. 92).
Since then whistleblower cases have boomed, recovering $7.9 billion from offending companies–and paying out $1.3 billion to the insiders who ratted on the wrongdoers. A whistleblower bar now spans some 200 lawyers. As word of giant awards has spread–$100 million to the two guys who blew the whistle on HCA and $32 million for a suit against Schering-Plough–the number of suits has soared. Fiscal 2003 saw 326 whistleblower suits, ten times as many as cropped up in 1986; the government gets involved in only about one-sixth of the cases, but these yield 96% of recoveries. And while the law first took aim at defense contractors and sought to protect low-level tattlers, it is now used to target fraud in health care and an array of other businesses. And at times it insulates–and enriches–higher-ups like TAP’s Durand.
In this hell-bent pursuit of jackpot justice, the prospect of a big payoff draws would-be whistleblowers “like moths to the flame,” the 4th Circuit Court of Appeals warned in 1999, when it tossed out a suit against Roche Biomedical by two employees of a merger partner who had already collected $833,000. The Bank of China has been hit with a suit for financing mislabeled mushrooms. Money manager Mario Gabelli faces a suit for allegedly putting in sham bids at auctions of wireless spectrum. An employee ratted on Odebrecht Contractors for underbidding on a federal contract, arguing it intended to raise prices later (his suit was dismissed as “fatally flawed”).
Government is often a willing accomplice, keen to look tough and cash in. It tars targets with bad press and threatens to levy fines many times the size of its own purported losses. If a company refuses to settle, the feds can move to ban it from federal business even before getting so much as an indictment. Most times companies settle, whether they are guilty or not. “It’s absolutely a form of extortion,” says attorney David Stetler, who successfully defended TAP exec Alan MacKenzie. MacKenzie last year became president of the $4 billion (sales) company.
Like whistleblowers themselves, the feds have a profit motive: They bring in $13 for each dollar spent prosecuting a case, and whistleblowers provide 52% of all U.S. government fraud recoveries, says Taxpayers Against Fraud, the whistleblower lawyers’ lobby. “It’s a tremendous return on investment,” says U.S. Attorney Sullivan, who has 13 people working on health care fraud cases. Health care now accounts for more than half of all whistleblower suits. Drugmakers have paid $2.5 billion in fines in recent years. In most instances the penalty paid was several times the losses.
Some of these winnings are funneled back into the pursuit of new cases, a nifty little move the feds began using in 1996. For several consecutive years the larger enforcement budgets have led to larger settlements, which in turn have funded still larger enforcement budgets. “It’s all done with a wink and a nod, with the bureaucrats going back to Congress and saying bigger budgets are justified by past results,” says Robert Salcido, a former federal prosecutor who defends whistleblower suits at Akin Gump Strauss Hauer & Feld.
Supporters of the whistleblower law say it is the only way to clamp down on the intractable problem of fraud in government contracts. The U.S. government spends half a trillion dollars annually on medical care, one-quarter of its budget, and fraudulent claims could total $50 billion of that sum, says the Government Accountability Office. “There can never be enough bureaucrats to discourage fraudulent use of taxpayers’ money, but knowing colleagues might squeal can be a deterrent,” says Senator Charles Grassley (R-Iowa), who pushed passage of the law.
In this for-profit justice, “financial incentives are what bring people forward,” concedes Michael Hertz, director of the Justice Department’s civil fraud section. But thereafter, he says, “a traditional fraud investigation takes place and the facts are the facts.”
Handing informants a share of the booty dates back centuries. Suits brought by citizens on a government’s behalf are known as qui tam cases, derived from the first two words of the Latin phrase meaning “whoever brings an action for the king brings it for himself.” President Lincoln introduced qui tam suits to the U.S. in 1863, signing the False Claims Act to target vendors of dud gunpowder in the Civil War.
The law languished for a century until it was revived in 1986 by Senator Grassley and John Phillips of the Center for Law in the Public Interest, the lawyer who later went into private practice to pursue whistleblower cases. They hiked a whistleblower’s cut from 10% to as much as 30% and lowered the threshold for guilt from knowingly ripping off the government to the fuzzier notion of “deliberate ignorance” or “reckless disregard” of regulations.
The whistleblower law was in full swing by the time Doug Durand landed at TAP Pharmaceutical in 1995. He grew up in Pawtucket, R.I., one of eight children, got a degree in pharmacology at the University of Rhode Island and spent 20 years selling drugs for Merck & Co.
His career there ended in a nasty dispute in 1994 in which Durand filed an Equal Employment Opportunity Commission suit against the drugmaker. He accused Merck of retaliating against him for supporting a female colleague’s claim that a Merck president had sexually harassed her. Merck paid him $255,000 to settle. Durand claimed in a related affidavit that Merck had ruined his career. Stripped of his office and duties, and exiled on paid leave, Durand applied to TAP, saying he was still a senior regional director looking to switch jobs. When he testified later before a grand jury, Durand left out all details of his Merck ouster, saying only that a headhunter had approached him.
TAP, meanwhile, was in the fight of its life. Abbott Labs and Takeda had formed the Lake Forest, Ill. company in 1977. After it developed a new monthly injection of Lupron, the first alternative to castration for advanced prostate cancer, sales jumped from $135 million in 1990 to $744 million five years later. The drug went for $400 a dose, and Medicare covered 80% of the cost.
Durand joined the company in January 1995 just as Lupron was facing fierce competition, from Zeneca’s Zoladex, a lower-cost rival. As head of sales his primary mission was to launch Prevacid, a new drug for acid reflux. But early on, he says, he grew uncomfortable with the way TAP was pushing Lupron. TAP sold it fervently, putting together a slide show on Lupron’s “return to practice” for doctors. It held seminars at fancy resorts and gave physicians TVs so they could show its promotional videos. Wags joked internally that TAP lawyers were in the “sales prevention department.”
One of Durand’s concerns involved sales reps’ failure to properly account for the free samples they gave to doctors. A precise accounting is required by federal law to prevent doctors from falsely billing Medicare for samples they received free of charge. Doctors must sign for each free dose they receive, and if they falsely bill Medicare, drugmakers can be convicted of criminal fraud.
Durand became convinced the faulty record-keeping was intentional, designed to let doctors collect extra money from Medicare. At one point he proposed linking sales reps’ bonuses to how well they accounted for free samples but was overruled, he claimed at the trial of his former colleagues. He had learned of a sales rep who had doctors sign for doses they hadn’t received–a “big problem,” he said, but didn’t recall doing anything about it. Despite Durand’s qualms, he didn’t turn to TAP’s outside counsel for advice; asked why, he testified that only two employees below the rank of vice president were allowed to do so and he was not on that short list.
In August 1995 Durand got edgier still, after people at a staff meeting discussed paying a 2% fee to Lupron doctors to cover administrative costs; federal rules allow such payments only to HMOs and other buying groups, not to individual doctors. It was tricky legal turf. “How would Doug look in [prison] stripes?” Alan MacKenzie, whom Duran outranked, joked at the meeting. Everyone else laughed, but Durand says he viewed the remark as “serious and sinister.”
Durand began looking at how to protect himself. He says he feared getting swept up in a prosecution if the feds ever stumbled upon TAP’s misdeeds. “I wanted to do the right thing,” he says. He told a former Merck colleague about the prison-stripes comment, and a month later the colleague referred him to a lawyer–Elizabeth Ainslie, a white-collar lawyer who had run the criminal fraud section in the Philadelphia U.S. Attorney’s office.
Ainslie suggested Durand begin keeping notes and collecting TAP documents for a possible whistleblower suit. Shortly afterward Durand faxed her a story headlined: “Rugby Laboratories Pays $7.5 Million to Settle Government VA Fraud Allegations; Former Employee Who Brought Qui Tam Suit Receives $1.1 Million.” He asked if this is what she had in mind; it was.
Durand began supplying the lawyer with TAP documents, letters with the company’s attorneys and memos it exchanged with its archrival, Zeneca. She showed the stuff to James Sheehan, a prosecutor in the Philadelphia office where she had worked, hoping to pique his interest in joining the case. For whistleblowers the key is to enlist the government–with its power to subpoena defendants and deprive a company of contracts before a case has been decided–as co-plaintiff.
As Ainslie wooed the feds, Durand put on a show of remaining a team player at TAP. In truth, he was the opposite. When word reached him of a California rep whose tactics were “out of line,” he left the matter to a subordinate to handle. Then he forwarded internal TAP correspondence on the matter to Ainslie.
In February 1996 Durand brought his sales managers to a golf resort in Florida and shared his vision of TAP’s future. Later that month he got his bonus for 1995 ($35,000) and quit, leaving TAP for AstraMerck. A month later he formally hired Ainslie to pursue a whistleblower case. She would cover his expenses and share in any recovery while billing defendants for her time if Durand prevailed. Three months later they filed suits against TAP and Zeneca. Like all such suits, Durand’s were filed under seal. The government was required to investigate them, and it did so, unbeknownst to the defendants.
For the ensuing five years Durand made repeated visits to U.S. attorney’s offices in Philadelphia, Boston, Chicago and Wilmington to prevail on prosecutors to join his suits. From his office at Astra he faxed a prosecutor in the Philadelphia office, Virginia Gibson Mason, calling her “Ginny” and boasting of “a productive morning!”–he had gotten the phone numbers of former subordinates to call and incriminate as the FBI listened in. The FBI made secret tape recordings of TAP employees discussing potential legal problems. In one Durand calls a former TAP colleague at his home, tells the child who answered the phone that a “friend” is calling and then lies to the TAP exec, pretending, in a bid to get the man to incriminate himself, that Durand himself had been subpoenaed; this employee wasn’t ever indicted.
Durand’s case drew the interest of prosecutors in the Boston office of the U.S. Attorney after they came across a second whistleblower, Dr. Joseph Gerstein. Gerstein oversaw drug buying at a Tufts University HMO and recently had decided to replace TAP’s Lupron with rival Zoladex. It was then, he told the feds, that TAP’s Kim Chase and a colleague offered him an “unrestricted” educational grant if he reversed his decision. Gerstein viewed it as a possible bribe. He approached TV and newspaper reporters but was ignored. Then he contacted Boston prosecutors.
“They were looking for potential cases to investigate since they have a big health care unit,” Gerstein says. He hired a lawyer and met with prosecutors in late 1996 and filed his whistleblower suit against TAP in March 1998. At the behest of federal agents, Gerstein let the FBI hide a camera in his office and wore a wire as he twice lured the TAP reps back by pretending he might reinstate Lupron. The FBI asked Gerstein to meet again to solicit a personal bribe. Queasy about the ethics, he staged the meeting but refused to come right out and ask for a kickback.
In April 2001, five years after Durand filed his suit, the Boston U.S. Attorney’s office joined it (”intervened”). Durand’s lawyer, Ainslie, drafted a motion to dismiss Gerstein’s suit, and his claim to part of the recovery, on the grounds that her client had filed first. The whistleblowers settled their spat, with Gerstein accepting a 3% cut of whatever the government recovered and Durand skimming a 14% share.
TAP denied the charges and argued that its sample program, educational grants and other efforts were entirely legal tactics common to many drugmakers. It was a losing hand. The feds had two highly motivated whistleblowers and had collected 500 boxes of documents. TAP pleaded guilty in October 2001 to what the government said was a nationwide conspiracy that included encouraging doctors to illegally bill for free samples, bribing them to get them to prescribe Lupron and reporting bogus wholesale prices to dupe Medicare into overpaying. It agreed to pay $885 million in restitution, fines and interest.
TAP has agreed to pay $150 million to settle a private suit brought by consumers, insurers and health benefit planners related to the charges, boosting its penalties past $1 billion. The government wrangled $355 million from AstraZeneca (formerly Zeneca) in 2003. Durand had never worked at Zeneca but says he sued the firm at the recommendation of Philadelphia Assistant U.S. Attorney James Sheehan, a former colleague of his attorney.
The carefully crafted deal let TAP remain a Medicare provider. The firm pleaded guilty to criminal charges of violating the Prescription Drug Marketing Act and was allowed to stay in business. Four doctors pleaded guilty to illegal billing. The day the settlement was finalized, H. Thomas Watkins, TAP’s president at the time, conceded it had provided Lupron samples to a number of doctors who illegally billed Medicare. But he added that “We fundamentally disagree with the government’s claims regarding TAP’s pricing and reimbursement policies.” TAP had agreed to pay the big fine, he added, only because the government had threatened to end federal reimbursements for Lupron, worth half a billion dollars a year.
That enraged William Young, the chief U.S. District Court judge in Boston who had approved the settlement. Young forbade TAP to make further claims of innocence. “I don’t want some p.r. flack saying this is all just a big misunderstanding,” he said.
When the separate trial of TAP employees unfolded last summer, the judge in that case, Douglas Woodlock, rejected the claims of whistleblower Gerstein wholesale. Durand testified and “had the crap beaten out of me” during a week of cross-examination, he says. His original suit claimed TAP had paid doctors 2% kickbacks, but only one customer got the fees and they were legit: Tri-State Urology, a buying group, had a legal safe harbor to receive the fees. Durand says TAP intended to kick money back to others.
He also wrongly told Chicago prosecutors that TAP fully accounted for only half of the free samples it handed out; in fact, it accounted for a far higher portion. He inaccurately testified that a meeting in Nevis, West Indies was a free junket for doctors dubbed “TAP into the Future.” In fact, it was titled “A Commitment to Urology: Therapeutic Innovations in BPH and Prostate Cancer.” Doctors paid their own way and earned educational credits.
“If you fixed the problems, do you think it would have helped your lawsuit?” Durand was asked at trial. His reply: “If I was allowed to fix the problems I was trying to fix, yes, the lawsuit would not have probably ever happened.”
By the time the legal holes, logical leaps and inaccuracies in the case were revealed in the criminal trial last year, TAP had been shaken down. Durand picked up $79 million for his TAP case and $47 million for suing AstraZeneca, and his lawyer, Ainslie, landed $13.5 million. Gerstein shared $16 million with Tufts, and his lawyer got an undisclosed sum, plus fees and expenses.
Durand appeared with a raft of other whistleblowers on Oprah Winfrey’s TV talk show in August 2002, regaling viewers with tales of his heroics. “Financially, I lost a lot,” he solemnly told his popular TV host. The show made only fleeting reference to the most interesting part–that ten months earlier he had received almost $80 million of his whistleblower windfall.
TAP may have deserved to get smacked down by prosecutors, and Durand may have deserved a reward for helping deliver it. But in other areas the government caps whistleblowers’ rewards at sane levels–$250,000 in customs cases and $1.6 million in those involving bank fraud. It’s an odd law that makes whistleblowers centimillionaires for reporting on bad behavior after silently watching it take place under their noses.
Sidebars
The Enforcer
Envy Engines
The Dark Side of Whistleblowing
Neil Weinberg, 03.14.05
The government makes whistleblowers filthy rich for ferreting out fraud on the job.
Douglas Durand is the paragon of a corporate whistleblower. Shortly after stepping in as vice president of sales at TAP Pharmaceutical Products in early 1995, he began to suspect the company was conspiring with doctors to overcharge the federal government’s Medicare program by tens of millions of dollars. But instead of trying to fix the problem, he spent seven months gathering evidence of supposed fraud. Then he quit in 1996 and filed a secret lawsuit against TAP. One motive: If he could prove the company was dirty, he would share a nice chunk of any money TAP paid back to the feds.
He spent eight years helping the government build its own case against the company, visiting prosecutors in four states and testifying before a grand jury in Boston. He compiled a list of alleged TAP conspirators and then called these former colleagues while the FBI listened in. Moreover, Durand later filed suit making similar allegations against a TAP rival, the former Zeneca Inc. The feds ultimately joined him, filing civil and criminal charges against TAP and prodding it into paying the government $885 million to settle the case–six times as much as the claimed overcharges. Douglas Durand cashed in: He received $126 million from the U.S. government. Now age 53, he retired and lives with his wife and daughter in the tony enclave of Tarpon Springs, Fla.
Yet TAP itself was never accused of submitting bogus Medicare bills; it was charged under a little-known provision that holds medical suppliers accountable if others falsely bill the government for the suppliers’ products. On Oct. 3, 2001, the day prosecutors announced the settlement, they filed criminal fraud charges accusing TAP executives of perpetrating the overbilling scheme. This “sends a very strong signal to the pharmaceutical industry,” the prosecutor in the case, Michael Sullivan, publicly declared at the time.
Then Durand’s story began to fall apart. As the trial of a dozen TAP employees played out last year, defense attorneys poked holes in Durand’s claims. Kickbacks he said TAP paid to doctors never happened. Price hikes he had accused the firm of imposing to overcharge Medicare hadn’t actually taken place. A fancy conference Durand had described as a way to bribe doctors into selling TAP’s drugs was in fact paid for by the attendees themselves.
In July a federal jury in Boston declared all the defendants not guilty. The judge then tossed out a guilty plea entered before trial by Kimberlee Chase, a TAP sales manager charged with bribing a health maintenance organization. The judge ruled that federal antikickback statutes don’t apply to HMOs, so Chase hadn’t committed a crime. Never mind that those same HMO-related allegations had been key to the government’s case against the company. It was the third time in eight years that all the employees indicted in such cases were exonerated after their employers paid big fines–Caremark coughed up $161 million and Blue Cross Blue Shield of Illinois $144 million.
So it goes in the Byzantine world of whistleblowers. In the post-Enron era, these self-appointed do-gooders are granted breathless audiences by Congress, extolled on national television and lauded by Time magazine as Persons of the Year. But some whistleblowers are motivated by greed, willing to stretch the truth for profit. That owes to the whistleblower law, adopted in 1986, that hands informants as much as a 30% cut of any money recouped by the government. It was pushed by a public-interest lawyer who then launched a practice for whistleblower cases, pocketing millions (see box, p. 92).
Since then whistleblower cases have boomed, recovering $7.9 billion from offending companies–and paying out $1.3 billion to the insiders who ratted on the wrongdoers. A whistleblower bar now spans some 200 lawyers. As word of giant awards has spread–$100 million to the two guys who blew the whistle on HCA and $32 million for a suit against Schering-Plough–the number of suits has soared. Fiscal 2003 saw 326 whistleblower suits, ten times as many as cropped up in 1986; the government gets involved in only about one-sixth of the cases, but these yield 96% of recoveries. And while the law first took aim at defense contractors and sought to protect low-level tattlers, it is now used to target fraud in health care and an array of other businesses. And at times it insulates–and enriches–higher-ups like TAP’s Durand.
In this hell-bent pursuit of jackpot justice, the prospect of a big payoff draws would-be whistleblowers “like moths to the flame,” the 4th Circuit Court of Appeals warned in 1999, when it tossed out a suit against Roche Biomedical by two employees of a merger partner who had already collected $833,000. The Bank of China has been hit with a suit for financing mislabeled mushrooms. Money manager Mario Gabelli faces a suit for allegedly putting in sham bids at auctions of wireless spectrum. An employee ratted on Odebrecht Contractors for underbidding on a federal contract, arguing it intended to raise prices later (his suit was dismissed as “fatally flawed”).
Government is often a willing accomplice, keen to look tough and cash in. It tars targets with bad press and threatens to levy fines many times the size of its own purported losses. If a company refuses to settle, the feds can move to ban it from federal business even before getting so much as an indictment. Most times companies settle, whether they are guilty or not. “It’s absolutely a form of extortion,” says attorney David Stetler, who successfully defended TAP exec Alan MacKenzie. MacKenzie last year became president of the $4 billion (sales) company.
Like whistleblowers themselves, the feds have a profit motive: They bring in $13 for each dollar spent prosecuting a case, and whistleblowers provide 52% of all U.S. government fraud recoveries, says Taxpayers Against Fraud, the whistleblower lawyers’ lobby. “It’s a tremendous return on investment,” says U.S. Attorney Sullivan, who has 13 people working on health care fraud cases. Health care now accounts for more than half of all whistleblower suits. Drugmakers have paid $2.5 billion in fines in recent years. In most instances the penalty paid was several times the losses.
Some of these winnings are funneled back into the pursuit of new cases, a nifty little move the feds began using in 1996. For several consecutive years the larger enforcement budgets have led to larger settlements, which in turn have funded still larger enforcement budgets. “It’s all done with a wink and a nod, with the bureaucrats going back to Congress and saying bigger budgets are justified by past results,” says Robert Salcido, a former federal prosecutor who defends whistleblower suits at Akin Gump Strauss Hauer & Feld.
Supporters of the whistleblower law say it is the only way to clamp down on the intractable problem of fraud in government contracts. The U.S. government spends half a trillion dollars annually on medical care, one-quarter of its budget, and fraudulent claims could total $50 billion of that sum, says the Government Accountability Office. “There can never be enough bureaucrats to discourage fraudulent use of taxpayers’ money, but knowing colleagues might squeal can be a deterrent,” says Senator Charles Grassley (R-Iowa), who pushed passage of the law.
In this for-profit justice, “financial incentives are what bring people forward,” concedes Michael Hertz, director of the Justice Department’s civil fraud section. But thereafter, he says, “a traditional fraud investigation takes place and the facts are the facts.”
Handing informants a share of the booty dates back centuries. Suits brought by citizens on a government’s behalf are known as qui tam cases, derived from the first two words of the Latin phrase meaning “whoever brings an action for the king brings it for himself.” President Lincoln introduced qui tam suits to the U.S. in 1863, signing the False Claims Act to target vendors of dud gunpowder in the Civil War.
The law languished for a century until it was revived in 1986 by Senator Grassley and John Phillips of the Center for Law in the Public Interest, the lawyer who later went into private practice to pursue whistleblower cases. They hiked a whistleblower’s cut from 10% to as much as 30% and lowered the threshold for guilt from knowingly ripping off the government to the fuzzier notion of “deliberate ignorance” or “reckless disregard” of regulations.
The whistleblower law was in full swing by the time Doug Durand landed at TAP Pharmaceutical in 1995. He grew up in Pawtucket, R.I., one of eight children, got a degree in pharmacology at the University of Rhode Island and spent 20 years selling drugs for Merck & Co.
His career there ended in a nasty dispute in 1994 in which Durand filed an Equal Employment Opportunity Commission suit against the drugmaker. He accused Merck of retaliating against him for supporting a female colleague’s claim that a Merck president had sexually harassed her. Merck paid him $255,000 to settle. Durand claimed in a related affidavit that Merck had ruined his career. Stripped of his office and duties, and exiled on paid leave, Durand applied to TAP, saying he was still a senior regional director looking to switch jobs. When he testified later before a grand jury, Durand left out all details of his Merck ouster, saying only that a headhunter had approached him.
TAP, meanwhile, was in the fight of its life. Abbott Labs and Takeda had formed the Lake Forest, Ill. company in 1977. After it developed a new monthly injection of Lupron, the first alternative to castration for advanced prostate cancer, sales jumped from $135 million in 1990 to $744 million five years later. The drug went for $400 a dose, and Medicare covered 80% of the cost.
Durand joined the company in January 1995 just as Lupron was facing fierce competition, from Zeneca’s Zoladex, a lower-cost rival. As head of sales his primary mission was to launch Prevacid, a new drug for acid reflux. But early on, he says, he grew uncomfortable with the way TAP was pushing Lupron. TAP sold it fervently, putting together a slide show on Lupron’s “return to practice” for doctors. It held seminars at fancy resorts and gave physicians TVs so they could show its promotional videos. Wags joked internally that TAP lawyers were in the “sales prevention department.”
One of Durand’s concerns involved sales reps’ failure to properly account for the free samples they gave to doctors. A precise accounting is required by federal law to prevent doctors from falsely billing Medicare for samples they received free of charge. Doctors must sign for each free dose they receive, and if they falsely bill Medicare, drugmakers can be convicted of criminal fraud.
Durand became convinced the faulty record-keeping was intentional, designed to let doctors collect extra money from Medicare. At one point he proposed linking sales reps’ bonuses to how well they accounted for free samples but was overruled, he claimed at the trial of his former colleagues. He had learned of a sales rep who had doctors sign for doses they hadn’t received–a “big problem,” he said, but didn’t recall doing anything about it. Despite Durand’s qualms, he didn’t turn to TAP’s outside counsel for advice; asked why, he testified that only two employees below the rank of vice president were allowed to do so and he was not on that short list.
In August 1995 Durand got edgier still, after people at a staff meeting discussed paying a 2% fee to Lupron doctors to cover administrative costs; federal rules allow such payments only to HMOs and other buying groups, not to individual doctors. It was tricky legal turf. “How would Doug look in [prison] stripes?” Alan MacKenzie, whom Duran outranked, joked at the meeting. Everyone else laughed, but Durand says he viewed the remark as “serious and sinister.”
Durand began looking at how to protect himself. He says he feared getting swept up in a prosecution if the feds ever stumbled upon TAP’s misdeeds. “I wanted to do the right thing,” he says. He told a former Merck colleague about the prison-stripes comment, and a month later the colleague referred him to a lawyer–Elizabeth Ainslie, a white-collar lawyer who had run the criminal fraud section in the Philadelphia U.S. Attorney’s office.
Ainslie suggested Durand begin keeping notes and collecting TAP documents for a possible whistleblower suit. Shortly afterward Durand faxed her a story headlined: “Rugby Laboratories Pays $7.5 Million to Settle Government VA Fraud Allegations; Former Employee Who Brought Qui Tam Suit Receives $1.1 Million.” He asked if this is what she had in mind; it was.
Durand began supplying the lawyer with TAP documents, letters with the company’s attorneys and memos it exchanged with its archrival, Zeneca. She showed the stuff to James Sheehan, a prosecutor in the Philadelphia office where she had worked, hoping to pique his interest in joining the case. For whistleblowers the key is to enlist the government–with its power to subpoena defendants and deprive a company of contracts before a case has been decided–as co-plaintiff.
As Ainslie wooed the feds, Durand put on a show of remaining a team player at TAP. In truth, he was the opposite. When word reached him of a California rep whose tactics were “out of line,” he left the matter to a subordinate to handle. Then he forwarded internal TAP correspondence on the matter to Ainslie.
In February 1996 Durand brought his sales managers to a golf resort in Florida and shared his vision of TAP’s future. Later that month he got his bonus for 1995 ($35,000) and quit, leaving TAP for AstraMerck. A month later he formally hired Ainslie to pursue a whistleblower case. She would cover his expenses and share in any recovery while billing defendants for her time if Durand prevailed. Three months later they filed suits against TAP and Zeneca. Like all such suits, Durand’s were filed under seal. The government was required to investigate them, and it did so, unbeknownst to the defendants.
For the ensuing five years Durand made repeated visits to U.S. attorney’s offices in Philadelphia, Boston, Chicago and Wilmington to prevail on prosecutors to join his suits. From his office at Astra he faxed a prosecutor in the Philadelphia office, Virginia Gibson Mason, calling her “Ginny” and boasting of “a productive morning!”–he had gotten the phone numbers of former subordinates to call and incriminate as the FBI listened in. The FBI made secret tape recordings of TAP employees discussing potential legal problems. In one Durand calls a former TAP colleague at his home, tells the child who answered the phone that a “friend” is calling and then lies to the TAP exec, pretending, in a bid to get the man to incriminate himself, that Durand himself had been subpoenaed; this employee wasn’t ever indicted.
Durand’s case drew the interest of prosecutors in the Boston office of the U.S. Attorney after they came across a second whistleblower, Dr. Joseph Gerstein. Gerstein oversaw drug buying at a Tufts University HMO and recently had decided to replace TAP’s Lupron with rival Zoladex. It was then, he told the feds, that TAP’s Kim Chase and a colleague offered him an “unrestricted” educational grant if he reversed his decision. Gerstein viewed it as a possible bribe. He approached TV and newspaper reporters but was ignored. Then he contacted Boston prosecutors.
“They were looking for potential cases to investigate since they have a big health care unit,” Gerstein says. He hired a lawyer and met with prosecutors in late 1996 and filed his whistleblower suit against TAP in March 1998. At the behest of federal agents, Gerstein let the FBI hide a camera in his office and wore a wire as he twice lured the TAP reps back by pretending he might reinstate Lupron. The FBI asked Gerstein to meet again to solicit a personal bribe. Queasy about the ethics, he staged the meeting but refused to come right out and ask for a kickback.
In April 2001, five years after Durand filed his suit, the Boston U.S. Attorney’s office joined it (”intervened”). Durand’s lawyer, Ainslie, drafted a motion to dismiss Gerstein’s suit, and his claim to part of the recovery, on the grounds that her client had filed first. The whistleblowers settled their spat, with Gerstein accepting a 3% cut of whatever the government recovered and Durand skimming a 14% share.
TAP denied the charges and argued that its sample program, educational grants and other efforts were entirely legal tactics common to many drugmakers. It was a losing hand. The feds had two highly motivated whistleblowers and had collected 500 boxes of documents. TAP pleaded guilty in October 2001 to what the government said was a nationwide conspiracy that included encouraging doctors to illegally bill for free samples, bribing them to get them to prescribe Lupron and reporting bogus wholesale prices to dupe Medicare into overpaying. It agreed to pay $885 million in restitution, fines and interest.
TAP has agreed to pay $150 million to settle a private suit brought by consumers, insurers and health benefit planners related to the charges, boosting its penalties past $1 billion. The government wrangled $355 million from AstraZeneca (formerly Zeneca) in 2003. Durand had never worked at Zeneca but says he sued the firm at the recommendation of Philadelphia Assistant U.S. Attorney James Sheehan, a former colleague of his attorney.
The carefully crafted deal let TAP remain a Medicare provider. The firm pleaded guilty to criminal charges of violating the Prescription Drug Marketing Act and was allowed to stay in business. Four doctors pleaded guilty to illegal billing. The day the settlement was finalized, H. Thomas Watkins, TAP’s president at the time, conceded it had provided Lupron samples to a number of doctors who illegally billed Medicare. But he added that “We fundamentally disagree with the government’s claims regarding TAP’s pricing and reimbursement policies.” TAP had agreed to pay the big fine, he added, only because the government had threatened to end federal reimbursements for Lupron, worth half a billion dollars a year.
That enraged William Young, the chief U.S. District Court judge in Boston who had approved the settlement. Young forbade TAP to make further claims of innocence. “I don’t want some p.r. flack saying this is all just a big misunderstanding,” he said.
When the separate trial of TAP employees unfolded last summer, the judge in that case, Douglas Woodlock, rejected the claims of whistleblower Gerstein wholesale. Durand testified and “had the crap beaten out of me” during a week of cross-examination, he says. His original suit claimed TAP had paid doctors 2% kickbacks, but only one customer got the fees and they were legit: Tri-State Urology, a buying group, had a legal safe harbor to receive the fees. Durand says TAP intended to kick money back to others.
He also wrongly told Chicago prosecutors that TAP fully accounted for only half of the free samples it handed out; in fact, it accounted for a far higher portion. He inaccurately testified that a meeting in Nevis, West Indies was a free junket for doctors dubbed “TAP into the Future.” In fact, it was titled “A Commitment to Urology: Therapeutic Innovations in BPH and Prostate Cancer.” Doctors paid their own way and earned educational credits.
“If you fixed the problems, do you think it would have helped your lawsuit?” Durand was asked at trial. His reply: “If I was allowed to fix the problems I was trying to fix, yes, the lawsuit would not have probably ever happened.”
By the time the legal holes, logical leaps and inaccuracies in the case were revealed in the criminal trial last year, TAP had been shaken down. Durand picked up $79 million for his TAP case and $47 million for suing AstraZeneca, and his lawyer, Ainslie, landed $13.5 million. Gerstein shared $16 million with Tufts, and his lawyer got an undisclosed sum, plus fees and expenses.
Durand appeared with a raft of other whistleblowers on Oprah Winfrey’s TV talk show in August 2002, regaling viewers with tales of his heroics. “Financially, I lost a lot,” he solemnly told his popular TV host. The show made only fleeting reference to the most interesting part–that ten months earlier he had received almost $80 million of his whistleblower windfall.
TAP may have deserved to get smacked down by prosecutors, and Durand may have deserved a reward for helping deliver it. But in other areas the government caps whistleblowers’ rewards at sane levels–$250,000 in customs cases and $1.6 million in those involving bank fraud. It’s an odd law that makes whistleblowers centimillionaires for reporting on bad behavior after silently watching it take place under their noses.
Sidebars
The Enforcer
Envy Engines
C. Taylor Pickett, Chief Executive Officer of Omega.,
Where was Mr Pickett prior to this fraud ?
Omega Healthcare Announces Plan for Haven Facilities
Omega Healthcare Announces Plan for Haven FacilitiesTIMONIUM, Md.MD-OMEGA-HEALTHCARE
TIMONIUM, Md.--(BUSINESS WIRE)--
Omega Healthcare Investors, Inc. (NYSE:OHI) today announced that as a result of the termination of a third party's agreement to acquire substantially all the assets of Haven Eldercare, LLC out of bankruptcy, Omega and an experienced nursing home management team have formed a new company to operate the 15 Haven facilities located on real estate owned by Omega. The transition to the new operating management team is subject to approval of the U.S. Bankruptcy Court, which has jurisdiction over Haven's assets. Omega expects the Court to approve the new management team taking control based on Omega's rights as a lessor and a secured creditor under existing agreements.
'Given the termination of a third party purchaser's agreement to acquire the assets of Haven out of bankruptcy, Omega worked swiftly and diligently to retain an excellent and qualified team ready to assume management of the facilities,' according to C. Taylor Pickett, Chief Executive Officer of Omega.
The team will be led by Timothy Coburn. Tim has been in health care facility management for 30 years as a senior member of several national health care companies providing successful oversight to skilled nursing facilities, assisted living facilities, sub-acute care facilities including traumatic brain injury facilities and independent living communities around the country. Over the past six years he has been utilized as a manager of distressed health care properties on behalf of the U.S. Bankruptcy Courts and the State of Connecticut Superior Courts, as well as private investors. He was appointed Patient Care Officer by the U.S. Bankruptcy Court for the Haven bankruptcy in November of 2007 and is a licensed Nursing Home Administrator in Connecticut and Massachusetts.
'Omega plans to provide both working capital and capital expenditure credit facilities to the new provider so that the caregivers in these facilities can continue doing what they do best and that is providing quality care for the residents of these facilities,' continued Mr. Pickett.
'Since the Haven situation has been rapidly evolving, we have not completed our assessment of the financial impact of these actions,' continued Mr. Pickett. 'We expect to be in a position to provide an overview of the financial impact in connection with our second quarter earnings announcement.'
Omega is a real estate investment trust investing in and providing financing to the long-term care industry. At March 31, 2008, Omega owned or held mortgages on 235 healthcare facilities located in 28 states and operated by 26 third-party healthcare operating companies.
This announcement includes forward-looking statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of the Company's properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of the Company's operators; (iv) the ability of operators in bankruptcy to reject unexpired lease obligations, modify the terms of the Company's mortgages, and impede the ability of the Company to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; (v) the availability and cost of capital; (vi) the Company's ability to maintain its credit ratings; (vii) competition in the financing of healthcare facilities; (viii) the Company's ability to maintain its status as a real estate investment trust; (ix) uncertainties relating to Haven's bankruptcy process, and (x) other factors identified in the Company's filings with the Securities and Exchange Commission. Statements regarding future events and developments and the Company's future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements.
.
Omega Healthcare Announces Plan for Haven Facilities
Omega Healthcare Announces Plan for Haven FacilitiesTIMONIUM, Md.MD-OMEGA-HEALTHCARE
TIMONIUM, Md.--(BUSINESS WIRE)--
Omega Healthcare Investors, Inc. (NYSE:OHI) today announced that as a result of the termination of a third party's agreement to acquire substantially all the assets of Haven Eldercare, LLC out of bankruptcy, Omega and an experienced nursing home management team have formed a new company to operate the 15 Haven facilities located on real estate owned by Omega. The transition to the new operating management team is subject to approval of the U.S. Bankruptcy Court, which has jurisdiction over Haven's assets. Omega expects the Court to approve the new management team taking control based on Omega's rights as a lessor and a secured creditor under existing agreements.
'Given the termination of a third party purchaser's agreement to acquire the assets of Haven out of bankruptcy, Omega worked swiftly and diligently to retain an excellent and qualified team ready to assume management of the facilities,' according to C. Taylor Pickett, Chief Executive Officer of Omega.
The team will be led by Timothy Coburn. Tim has been in health care facility management for 30 years as a senior member of several national health care companies providing successful oversight to skilled nursing facilities, assisted living facilities, sub-acute care facilities including traumatic brain injury facilities and independent living communities around the country. Over the past six years he has been utilized as a manager of distressed health care properties on behalf of the U.S. Bankruptcy Courts and the State of Connecticut Superior Courts, as well as private investors. He was appointed Patient Care Officer by the U.S. Bankruptcy Court for the Haven bankruptcy in November of 2007 and is a licensed Nursing Home Administrator in Connecticut and Massachusetts.
'Omega plans to provide both working capital and capital expenditure credit facilities to the new provider so that the caregivers in these facilities can continue doing what they do best and that is providing quality care for the residents of these facilities,' continued Mr. Pickett.
'Since the Haven situation has been rapidly evolving, we have not completed our assessment of the financial impact of these actions,' continued Mr. Pickett. 'We expect to be in a position to provide an overview of the financial impact in connection with our second quarter earnings announcement.'
Omega is a real estate investment trust investing in and providing financing to the long-term care industry. At March 31, 2008, Omega owned or held mortgages on 235 healthcare facilities located in 28 states and operated by 26 third-party healthcare operating companies.
This announcement includes forward-looking statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of the Company's properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of the Company's operators; (iv) the ability of operators in bankruptcy to reject unexpired lease obligations, modify the terms of the Company's mortgages, and impede the ability of the Company to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; (v) the availability and cost of capital; (vi) the Company's ability to maintain its credit ratings; (vii) competition in the financing of healthcare facilities; (viii) the Company's ability to maintain its status as a real estate investment trust; (ix) uncertainties relating to Haven's bankruptcy process, and (x) other factors identified in the Company's filings with the Securities and Exchange Commission. Statements regarding future events and developments and the Company's future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements.
.
James K. Happ , CFO at Columbia Homecare Group Inc. in Dallas
Getting ready to avoid confiscation?
Before his BIG TRIAL in October regarding the FRAUD at NCFE, PAY ATTENTION!!!
JULY 2, 2008 1:00PM
Healthcare veteran spends $540K for Palm Beach Gardens home
by Dan Fey, BlockShopper Staff
James K. Happ and his wife, Julie, bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 from Kenco Communities At Mirasol Inc. on June 24.
Mr. Happ has served as the president of Med Diversified Inc., a national provider of home and alternate site health care services. He was appointed to the position in Oct 2002, and has also served as the CEO of the company's subsidiary, Tender Loving Care Health Care Services, Inc.
He's previously served as the chief financial officer at the Columbia Homecare Group Inc. in Dallas and in various executive positions with Interim Services, Inc., a Florida-based staffing and home care company.
He earned his M.B.A. from Nova Southeastern University and his bachelor's in business administration from Miami University in Oxford, Ohio.
Home sales in Palm Beach Gardens have dropped 14.4 percent thus far in 2008. The median sale price has also dropped from $320,000 in 2007 to $290,000 so far this year.
Address: 112 Via Escobar Place
Buyer(s): James K Happ and Julie K Happ
Seller(s): Kenco Communities At Mirasol Inc
Sale date: 2008-06-24
Before his BIG TRIAL in October regarding the FRAUD at NCFE, PAY ATTENTION!!!
JULY 2, 2008 1:00PM
Healthcare veteran spends $540K for Palm Beach Gardens home
by Dan Fey, BlockShopper Staff
James K. Happ and his wife, Julie, bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 from Kenco Communities At Mirasol Inc. on June 24.
Mr. Happ has served as the president of Med Diversified Inc., a national provider of home and alternate site health care services. He was appointed to the position in Oct 2002, and has also served as the CEO of the company's subsidiary, Tender Loving Care Health Care Services, Inc.
He's previously served as the chief financial officer at the Columbia Homecare Group Inc. in Dallas and in various executive positions with Interim Services, Inc., a Florida-based staffing and home care company.
He earned his M.B.A. from Nova Southeastern University and his bachelor's in business administration from Miami University in Oxford, Ohio.
Home sales in Palm Beach Gardens have dropped 14.4 percent thus far in 2008. The median sale price has also dropped from $320,000 in 2007 to $290,000 so far this year.
Address: 112 Via Escobar Place
Buyer(s): James K Happ and Julie K Happ
Seller(s): Kenco Communities At Mirasol Inc
Sale date: 2008-06-24
Saturday, June 28, 2008
A letter to my Senators.......
Sent: Wednesday, May 10, 2006 1:18 PM
Subject: letter to Durbin and Obama
Listening to Lamar Alexander of TN and others regarding the reason many people must travel miles to get to a physician is because of all the malpractice law suits filed in this country. This could be no further from the truth!
I would beg you to please take a look at Bill Frist's family empire/monopoly. HCA, INC. It is because of this conglomerate that our health system is in the crisis it is in and I implore you to bring up the reason people have to travel miles to a physician is not because of the malpractice but because of the monopoly HCA has been able to build in this country for the last 25-30 years. Not to mention the Billions, and possibly trillions of dollars in Medicare/Medicaid fraud, some of which has been exposed, most of which has not.
I would be more than happy to discuss my research and proof of my statements. This will be exposed, sooner or later with or without your assistance.
Thank You-
Susan Golden
708-453-1640
Subject: letter to Durbin and Obama
Listening to Lamar Alexander of TN and others regarding the reason many people must travel miles to get to a physician is because of all the malpractice law suits filed in this country. This could be no further from the truth!
I would beg you to please take a look at Bill Frist's family empire/monopoly. HCA, INC. It is because of this conglomerate that our health system is in the crisis it is in and I implore you to bring up the reason people have to travel miles to a physician is not because of the malpractice but because of the monopoly HCA has been able to build in this country for the last 25-30 years. Not to mention the Billions, and possibly trillions of dollars in Medicare/Medicaid fraud, some of which has been exposed, most of which has not.
I would be more than happy to discuss my research and proof of my statements. This will be exposed, sooner or later with or without your assistance.
Thank You-
Susan Golden
708-453-1640
Thursday, June 19, 2008
U.S. Supreme Court regarding the federal statute for money laundering ......
The sentencing of Virginia dentist, Dr. Roy S. Shelburne has been postponed due to a recent United States Supreme Court case relating to his conviction on money laundering.
A June 2 ruling by the U.S. Supreme Court regarding the federal statute for money laundering is the latest in a string of delays – ranging from a late-arriving transcript of the trial, to the defense attorney’s computer crashing at the 11th hour – to push back the sentencing.
On Monday, Judge James P. Jones of the U.S. Western District of Virginia said the high court’s split decision in United States v. Santos “may be significant” in sentencing Shelburne.
Jones called the decision “complicated,” and “something I need to study further.”
It is unclear what if any bearing the high court’s decision will have on the sentencing.
Shelburne was convicted on March 6 of racketeering, health care fraud and money laundering, and faces up to 120 years in prison and a $1.25 million fine.
Dr. Roy Shelburne remains on bail pending sentencing and continues to practice dentistry but on a “dramtically reduced” level.
The judge in the case did not set a trial date for sentencing on Monday. The defense hopes to argue for a new trial at the sentencing hearing.
A June 2 ruling by the U.S. Supreme Court regarding the federal statute for money laundering is the latest in a string of delays – ranging from a late-arriving transcript of the trial, to the defense attorney’s computer crashing at the 11th hour – to push back the sentencing.
On Monday, Judge James P. Jones of the U.S. Western District of Virginia said the high court’s split decision in United States v. Santos “may be significant” in sentencing Shelburne.
Jones called the decision “complicated,” and “something I need to study further.”
It is unclear what if any bearing the high court’s decision will have on the sentencing.
Shelburne was convicted on March 6 of racketeering, health care fraud and money laundering, and faces up to 120 years in prison and a $1.25 million fine.
Dr. Roy Shelburne remains on bail pending sentencing and continues to practice dentistry but on a “dramtically reduced” level.
The judge in the case did not set a trial date for sentencing on Monday. The defense hopes to argue for a new trial at the sentencing hearing.
Tuesday, June 17, 2008
Wescove Home Health Services
By AmericasNewsToday.Org staff
On the morning of Friday, June 6, special agents with the FBI and IRS-Criminal Investigation arrested the operator of Wescove Home Health Services at her home in Covina, Calif., on health care fraud and money laundering charges stemming from her participation in a scheme that defrauded Medicare out of more than $12 million.
Felcoranenda "Nenda" Estudillo, 50, a registered nurse, ran Wescove, which was based in the city of West Covina. Estudillo was Wescove’s administrator, responsible for the home health agency’s day-to-day operations and Medicare billing activity. In a 36-count indictment returned earlier this week and unsealed Friday, Estudillo is charged with conspiracy, health care fraud, money laundering, the structuring of cash transactions and falsifying records to maintain Wescove’s participation in the Medicare program.
According to the indictment, Estudillo paid marketers to recruit Medicare beneficiaries to receive benefits they were not eligible to receive. The marketers recruited and referred Medicare patients to Wescove, even though the beneficiaries were not confined to the home and did not need skilled nursing or therapy services. According to the indictment, Wescove billed Medicare for home health services provided to beneficiaries who were not confined to their homes, did not qualify for or need those types of services, or never received any services.
Estudillo allegedly paid marketers fees ranging from $300 to $4,800, based upon the amount that Wescove was able to fraudulently bill to Medicare. Estudillo would pay marketers higher fees for patient referrals that resulted in increased Medicare billings. She also allegedly paid referral fees that she booked as "skilled nursing" payments to conceal the payment of kickbacks.
According to the indictment, some Medicare beneficiaries were paid cash to sign up for home health services after being recruited by the marketers to receive services they did not need or did not receive. Estudillo allegedly paid more than $3.1 million to at least six marketers for the referral of Medicare beneficiaries.
The indictment charges Estudillo with 11 money laundering counts and 12 cash-structuring violations. These result from allegations that Estudillo laundered the proceeds of her Medicare billing scheme to promote the scheme, conceal the source of payments made to marketers and to herself, and avoid the payment of taxes . According to the indictment, Estudillo paid cash to some of the marketers who referred patients. To facilitate this, Estudillo devised a check-cashing scheme involving the marketers and Wescover employees in which they negotiated Wescove checks, obtained cash, and Estudillo used some of the cash to pay the marketers and patients. Estudillo allegedly wrote checks to marketers and employees in amounts less than $10,000 in an effort to avoid the currency transaction reporting requirements that banks are required to follow.
If convicted of all counts in the indictment, Estudillo faces a statutory maximum penalty of 430 years in federal prison.
The investigation of Estudillo was conducted by IRS-Criminal Investigation and the Federal Bureau of Investigation.
On the Web:
http://www.irs.gov,
http://www.fbi.gov/.
On the morning of Friday, June 6, special agents with the FBI and IRS-Criminal Investigation arrested the operator of Wescove Home Health Services at her home in Covina, Calif., on health care fraud and money laundering charges stemming from her participation in a scheme that defrauded Medicare out of more than $12 million.
Felcoranenda "Nenda" Estudillo, 50, a registered nurse, ran Wescove, which was based in the city of West Covina. Estudillo was Wescove’s administrator, responsible for the home health agency’s day-to-day operations and Medicare billing activity. In a 36-count indictment returned earlier this week and unsealed Friday, Estudillo is charged with conspiracy, health care fraud, money laundering, the structuring of cash transactions and falsifying records to maintain Wescove’s participation in the Medicare program.
According to the indictment, Estudillo paid marketers to recruit Medicare beneficiaries to receive benefits they were not eligible to receive. The marketers recruited and referred Medicare patients to Wescove, even though the beneficiaries were not confined to the home and did not need skilled nursing or therapy services. According to the indictment, Wescove billed Medicare for home health services provided to beneficiaries who were not confined to their homes, did not qualify for or need those types of services, or never received any services.
Estudillo allegedly paid marketers fees ranging from $300 to $4,800, based upon the amount that Wescove was able to fraudulently bill to Medicare. Estudillo would pay marketers higher fees for patient referrals that resulted in increased Medicare billings. She also allegedly paid referral fees that she booked as "skilled nursing" payments to conceal the payment of kickbacks.
According to the indictment, some Medicare beneficiaries were paid cash to sign up for home health services after being recruited by the marketers to receive services they did not need or did not receive. Estudillo allegedly paid more than $3.1 million to at least six marketers for the referral of Medicare beneficiaries.
The indictment charges Estudillo with 11 money laundering counts and 12 cash-structuring violations. These result from allegations that Estudillo laundered the proceeds of her Medicare billing scheme to promote the scheme, conceal the source of payments made to marketers and to herself, and avoid the payment of taxes . According to the indictment, Estudillo paid cash to some of the marketers who referred patients. To facilitate this, Estudillo devised a check-cashing scheme involving the marketers and Wescover employees in which they negotiated Wescove checks, obtained cash, and Estudillo used some of the cash to pay the marketers and patients. Estudillo allegedly wrote checks to marketers and employees in amounts less than $10,000 in an effort to avoid the currency transaction reporting requirements that banks are required to follow.
If convicted of all counts in the indictment, Estudillo faces a statutory maximum penalty of 430 years in federal prison.
The investigation of Estudillo was conducted by IRS-Criminal Investigation and the Federal Bureau of Investigation.
On the Web:
http://www.irs.gov,
http://www.fbi.gov/.
NCFE FRAUD....BLATANT FRAUD!!!!!!!!!
COLUMBUS, Ohio - A federal judge has denied a request by the founder of a failed health care financing company to delay his corporate fraud trial.
Former National Century Financial (other-otc: CYFL.PK - news - people ) Enterprises chief executive Lance Poulsen wanted his trial in the $1.9 billion fraud case moved from August to October to give him and his attorneys more time to get ready.
But U.S. District Court Judge Algenon Marbley says he's already delayed the trial three times and sees no reason for another delay.
Poulsen had argued that his trial earlier this year on a related witness-tampering charge delayed his preparation for the fraud trial.
Marbley says Poulsen's attorneys knew they'd have to balance the demands of that trial and the upcoming fraud trial.
Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
Former National Century Financial (other-otc: CYFL.PK - news - people ) Enterprises chief executive Lance Poulsen wanted his trial in the $1.9 billion fraud case moved from August to October to give him and his attorneys more time to get ready.
But U.S. District Court Judge Algenon Marbley says he's already delayed the trial three times and sees no reason for another delay.
Poulsen had argued that his trial earlier this year on a related witness-tampering charge delayed his preparation for the fraud trial.
Marbley says Poulsen's attorneys knew they'd have to balance the demands of that trial and the upcoming fraud trial.
Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
One issue is that Medicare doesn't review the majority of the bills it pays to companies with federally issued supplier numbers,....
Medicare fraud on the rise nationwide
WASHINGTON, Jun 13, 2008 (UPI via COMTEX) -- Healthcare experts say the simplicity of defrauding the U.S. Medicare program points to the need for more resources devoted to prevent fraud.
One issue is that Medicare doesn't review the majority of the bills it pays to companies with federally issued supplier numbers, The Washington Post said Friday.
Checks are in place more to detect overbilling and unconventional medical treatment than fraud, officials said.
Law enforcement officials estimate healthcare fraud costs taxpayers more than $60 billion annually.
The Centers for Medicare and Medicaid Services, which oversees federally-funded health programs, said it's instituted several new measures to combat fraud. The efforts include working more closely with investigators, removing the mandatory billing numbers of nearly 900 companies and imposing new standards in areas of high fraud that prevent convicted felons from receiving a Medicare number.
In the Miami area, the U.S. Justice Department created a strike force that works with a small number of U.S. attorneys. The joint effort during the past year opened almost 900 criminal investigations and convicted 560 defendants in healthcare fraud offenses throughout the country, the Post said.
The strike force recently established a base in Los Angeles and plans call for similar operations in Houston soon.
URL: www.upi.com Copyright 2008 by United Press International
WASHINGTON, Jun 13, 2008 (UPI via COMTEX) -- Healthcare experts say the simplicity of defrauding the U.S. Medicare program points to the need for more resources devoted to prevent fraud.
One issue is that Medicare doesn't review the majority of the bills it pays to companies with federally issued supplier numbers, The Washington Post said Friday.
Checks are in place more to detect overbilling and unconventional medical treatment than fraud, officials said.
Law enforcement officials estimate healthcare fraud costs taxpayers more than $60 billion annually.
The Centers for Medicare and Medicaid Services, which oversees federally-funded health programs, said it's instituted several new measures to combat fraud. The efforts include working more closely with investigators, removing the mandatory billing numbers of nearly 900 companies and imposing new standards in areas of high fraud that prevent convicted felons from receiving a Medicare number.
In the Miami area, the U.S. Justice Department created a strike force that works with a small number of U.S. attorneys. The joint effort during the past year opened almost 900 criminal investigations and convicted 560 defendants in healthcare fraud offenses throughout the country, the Post said.
The strike force recently established a base in Los Angeles and plans call for similar operations in Houston soon.
URL: www.upi.com Copyright 2008 by United Press International
The Real Criminals: Corporate CEOs
It’s not the two-bit petty criminal whose causing the real danger in our lives and neighborhoods, it’s the Corporate criminals. The guys in suits, two steps removed from the people they are inflicting life threatening damage to that are wrecking havoc on our lives and our nation.
Corporate crime is often violent crime with very real victims. Mokhiber points out that while the FBI estimates that 16,000 Americans are murdered every year “56,000 Americans die every year on the job or from occupational diseases such as black lung and asbestosis while tens of thousands of other Americans fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.” -Gene Racz
Literally thousands of people dying because of purposeful oversight and ignorance by those whose only concern is often the bottom line. And your probably thinking, “It’s a good thing are government is taking care of them,” wondering how many CEOs will come to the same fate as Skilling and Lay (of Enron). And then you find out this tidbit:
The New York Times recently reported that the government has basically stopped prosecuting corporations for crimes despite the fact that costs of corporate crime far outweighs street crime. Eric Lichtblau, writing for the Times, noted that during the last three years, the U.S. Justice Department has put off prosecuting more than 50 corporations on charges ranging from bribery to fraud. Instead, it has been entering into so-called deferred prosecution agreements and non-prosecution agreements, in which companies are allowed to pay fines and hire monitors to watch over them.
Noware corrupt, but simply that it’s a terrible statement about our society that those with money are allowed to keep stealing from the rest of us and not be prosecuted for it. Seriously, they are stealing from all of us, not only on the product side of things but also in our tax dollars:
Health-care fraud alone, he said, costs Americans $100 billion to $400 billion a year. The taxpayer bill to clean up the savings and loan fraud was anywhere from $300 billion to $500 billion.
Not only do we need to speak up to our Justice Department about how this is unjust and unfair, but this knowledge should change and challenge the way you talk about and think about criminals. You should either conjure up the same disgust and suspicion of CEO’s as you currently have of street criminals and those you think look like criminals, or you should try and balance your perspective on both to a more understanding, but equally just perspective on both.
Corporate crime is often violent crime with very real victims. Mokhiber points out that while the FBI estimates that 16,000 Americans are murdered every year “56,000 Americans die every year on the job or from occupational diseases such as black lung and asbestosis while tens of thousands of other Americans fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.” -Gene Racz
Literally thousands of people dying because of purposeful oversight and ignorance by those whose only concern is often the bottom line. And your probably thinking, “It’s a good thing are government is taking care of them,” wondering how many CEOs will come to the same fate as Skilling and Lay (of Enron). And then you find out this tidbit:
The New York Times recently reported that the government has basically stopped prosecuting corporations for crimes despite the fact that costs of corporate crime far outweighs street crime. Eric Lichtblau, writing for the Times, noted that during the last three years, the U.S. Justice Department has put off prosecuting more than 50 corporations on charges ranging from bribery to fraud. Instead, it has been entering into so-called deferred prosecution agreements and non-prosecution agreements, in which companies are allowed to pay fines and hire monitors to watch over them.
Noware corrupt, but simply that it’s a terrible statement about our society that those with money are allowed to keep stealing from the rest of us and not be prosecuted for it. Seriously, they are stealing from all of us, not only on the product side of things but also in our tax dollars:
Health-care fraud alone, he said, costs Americans $100 billion to $400 billion a year. The taxpayer bill to clean up the savings and loan fraud was anywhere from $300 billion to $500 billion.
Not only do we need to speak up to our Justice Department about how this is unjust and unfair, but this knowledge should change and challenge the way you talk about and think about criminals. You should either conjure up the same disgust and suspicion of CEO’s as you currently have of street criminals and those you think look like criminals, or you should try and balance your perspective on both to a more understanding, but equally just perspective on both.
Friday, May 30, 2008
HIGH TECH FRAUD......OUT WITH THE OLD IN WITH THE NEW....oh boy!!
Who is watching over this enterprise? More one arm bandits controlling the HOME HEATL CARE in this country! OMG!!!
How much frayud will take place or these enterprises be allowed to STEAL RIGHT FROM UNDER OUR NOSES!!
Fully automated electronic fax system jointly developed by Thornberry Limited and SecureCare Technologies.
(Lancaster, PA and Austin, TX – May 20, 2008) Thornberry Limited, developer of home care clinical management software, and SecureCare Technologies (OTCBB: SCUC), a health care information technology company based in Austin, Texas, have partnered to provide what they believe is the home care industry's first, fully-automated electronic fax system.
SecureCare's Sfax™ system will be available to Thornberry customers on June 1, 2008. It eliminates the entire manual physician order fax operation and replaces it with an automated fax system that is integrated within Thornberry's NDoc® clinical management application.
Twin Tier Home Health in Vestal, New York will be the first home health agency to implement the new automated faxing system later this month. SecureCare CEO Dennis Nasto predicts Twin Tier will realize savings of up to 95% in administration time and up to 80% of the cost of manual faxing.
By automating the task of sending and receiving fax-based communications, Sfax™ meets HIPAA guidelines for electronic exchange of patient health information and delivers NDoc® 485 documents without the need to print and manually process. "All Sfax™ transmissions are encrypted and a built-in audit and log trail mean instant access to data in the event of an audit," Nasto said.
(Who is Dennis?)
"When we met Dennis at last October's NAHC meeting, we told him we were interested in a collaboration but did not want to merely write another third-party interface," said Thornberry president Tom Peth. "SecureCare does have agreements with other home care software companies so we made it clear that, If we were going to put in this much effort, we wanted to end up with something that no one else had yet done. I think this tight of an integration between the two products gives us the right to claim we have accomplished that."
According to a cost study conducted by SecureCare, almost 15 billion fax pages are sent, received, printed, signed and re-faxed every year between healthcare providers, greatly increasing costs and reducing efficiency.
www.thornberryltd.com./
www.sfaxme.com
--------------------------------------------------------------------------------
Homecare Homebase announces partnership with growing, six-state hospice.
SolAmor Hospice operates out of nine locations in six states, including Oklahoma, Colorado,
Massachusetts, New Mexico, New Hampshire, and Connecticut. SolAmor joined the Sun Healthcare Group family of companies in September 2006.
This week, the organization announced that it has selected Homecare Homebase to provide its software system.
(Glen Cavallo.....hmmmmmmm what a history this one has)
"As our organization continues to grow, we realized the current system would not uphold the level of quality care for which we are known and continue to pursue," said SolAmor president Glen Cavallo. His Oklahoma administrator, Jeffery Holm, agreed, "From an administrators standpoint, we now have the ability to eliminate repetitive, distracting tasks which will significantly increase our time spent attending to our patients and their loved ones."
Dallas-based Homecare Homebase offers a web-based software system running on handheld computers to track volunteer hours, prepare IDT reviews and coordinate the bereavement process. Founded in 1999, Homecare Homebase supports real-time, wireless information exchange, automates workflow processes and provides billing checks and balances to improve accuracy.
www.hchb.com
--------------------------------------------------------------------------------
Healthcare Automation celebrates 20 years supporting the Home Infusion industry.
Rhode Island-based Healthcare Automation, Inc. (HAI) is marking its 20th anniversary this year as a provider of home care software.
Headquartered in Warwick, RI, HAI was founded in 1988 to address the home infusion therapy industry's need for automation. "Our first product, The I.V. Solution, was developed to meet the need for affordable, comprehensive software systems for both small and complex home infusion providers," recalls HAI CEO and founder, Ken Pereira. The company's inaugural product is currently in use around the world, Pereira added.
Soon after, Pereira added outsourced reimbursement and collections services and regulatory consulting through the Healthcare Automation Reimbursement Center. Pereira brought in Jeanne Lugli, a former client and reimbursement expert who complemented the software offering.
HAI entered the Windows era with HomecareNet in 2002. Rather than convert old data structures and screens, the new product was entirely rewritten in JAVA atop a SQL Server database. After beta testing, it was expanded to support home nursing and home medical equipment functionality.
"We’re incredibly proud of the team we've built and the products we provide to our clients," Pereira concluded. "These first 20 years have given us insight into the industry that we are able to give back every day."
www.healthcare-automation.com
Contact Us | ©2006 Stony Hill Publishing
How much frayud will take place or these enterprises be allowed to STEAL RIGHT FROM UNDER OUR NOSES!!
Fully automated electronic fax system jointly developed by Thornberry Limited and SecureCare Technologies.
(Lancaster, PA and Austin, TX – May 20, 2008) Thornberry Limited, developer of home care clinical management software, and SecureCare Technologies (OTCBB: SCUC), a health care information technology company based in Austin, Texas, have partnered to provide what they believe is the home care industry's first, fully-automated electronic fax system.
SecureCare's Sfax™ system will be available to Thornberry customers on June 1, 2008. It eliminates the entire manual physician order fax operation and replaces it with an automated fax system that is integrated within Thornberry's NDoc® clinical management application.
Twin Tier Home Health in Vestal, New York will be the first home health agency to implement the new automated faxing system later this month. SecureCare CEO Dennis Nasto predicts Twin Tier will realize savings of up to 95% in administration time and up to 80% of the cost of manual faxing.
By automating the task of sending and receiving fax-based communications, Sfax™ meets HIPAA guidelines for electronic exchange of patient health information and delivers NDoc® 485 documents without the need to print and manually process. "All Sfax™ transmissions are encrypted and a built-in audit and log trail mean instant access to data in the event of an audit," Nasto said.
(Who is Dennis?)
"When we met Dennis at last October's NAHC meeting, we told him we were interested in a collaboration but did not want to merely write another third-party interface," said Thornberry president Tom Peth. "SecureCare does have agreements with other home care software companies so we made it clear that, If we were going to put in this much effort, we wanted to end up with something that no one else had yet done. I think this tight of an integration between the two products gives us the right to claim we have accomplished that."
According to a cost study conducted by SecureCare, almost 15 billion fax pages are sent, received, printed, signed and re-faxed every year between healthcare providers, greatly increasing costs and reducing efficiency.
www.thornberryltd.com./
www.sfaxme.com
--------------------------------------------------------------------------------
Homecare Homebase announces partnership with growing, six-state hospice.
SolAmor Hospice operates out of nine locations in six states, including Oklahoma, Colorado,
Massachusetts, New Mexico, New Hampshire, and Connecticut. SolAmor joined the Sun Healthcare Group family of companies in September 2006.
This week, the organization announced that it has selected Homecare Homebase to provide its software system.
(Glen Cavallo.....hmmmmmmm what a history this one has)
"As our organization continues to grow, we realized the current system would not uphold the level of quality care for which we are known and continue to pursue," said SolAmor president Glen Cavallo. His Oklahoma administrator, Jeffery Holm, agreed, "From an administrators standpoint, we now have the ability to eliminate repetitive, distracting tasks which will significantly increase our time spent attending to our patients and their loved ones."
Dallas-based Homecare Homebase offers a web-based software system running on handheld computers to track volunteer hours, prepare IDT reviews and coordinate the bereavement process. Founded in 1999, Homecare Homebase supports real-time, wireless information exchange, automates workflow processes and provides billing checks and balances to improve accuracy.
www.hchb.com
--------------------------------------------------------------------------------
Healthcare Automation celebrates 20 years supporting the Home Infusion industry.
Rhode Island-based Healthcare Automation, Inc. (HAI) is marking its 20th anniversary this year as a provider of home care software.
Headquartered in Warwick, RI, HAI was founded in 1988 to address the home infusion therapy industry's need for automation. "Our first product, The I.V. Solution, was developed to meet the need for affordable, comprehensive software systems for both small and complex home infusion providers," recalls HAI CEO and founder, Ken Pereira. The company's inaugural product is currently in use around the world, Pereira added.
Soon after, Pereira added outsourced reimbursement and collections services and regulatory consulting through the Healthcare Automation Reimbursement Center. Pereira brought in Jeanne Lugli, a former client and reimbursement expert who complemented the software offering.
HAI entered the Windows era with HomecareNet in 2002. Rather than convert old data structures and screens, the new product was entirely rewritten in JAVA atop a SQL Server database. After beta testing, it was expanded to support home nursing and home medical equipment functionality.
"We’re incredibly proud of the team we've built and the products we provide to our clients," Pereira concluded. "These first 20 years have given us insight into the industry that we are able to give back every day."
www.healthcare-automation.com
Contact Us | ©2006 Stony Hill Publishing
Tuesday, May 27, 2008
Open letter to Texas newspapers about peak oil: 'Why aren’t you listening?'
by Jeffrey J. Brown
April 2, 2006
Mr. Wesley R. Turner, President & Publisher
Fort Worth Star Telegram
Mr. James H. Moroney , III, Publisher & CEO
The Dallas Morning News
Subject: What Are Two Texas Billionaires,
Richard Rainwater & T. Boone Pickens,
Saying About Peak Oil & Why Aren’t You Listening?
Gentlemen:
I realize that I don’t have to introduce Richard Rainwater and Boone Pickens to you two gentlemen, but for the benefit of those who may not be familiar with Messrs. Rainwater and Pickens, following are brief introductions.
Richard Rainwater is the Texas based businessman who was chiefly responsible for turning the Bass Family’s inheritance of $50 into a $5 billion dollar fortune. Mr. Rainwater was therefore indirectly responsible for the remarkable urban renaissance of downtown Fort Worth, as a result of the Bass family’s massive investments. Mr. Rainwater also had a material role in George W. Bush’s selection as Managing Partner of the Texas Rangers Baseball Team, which launched Mr. Bush on his way to the Governor’s Mansion and then to the White House.
Mr. Pickens, now based in Dallas, has had a long and storied career in the oil and gas industry. Like most Texas oilmen, Mr. Pickens has had his ups and downs. Most recently he has been on an up cycle, via his investment firm, BP Capital.
These two gentlemen share an uncanny and proven ability to accurately predict future trends. The only real mistake that I am aware of is Mr. Pickens’ timing regarding natural gas prices some years ago. He was right about the price move, but he was just a little early.
Mr. Rainwater was profiled in the 12/14/05 issue of Fortune Magazine, “The Rainwater Prophecy.” Mr. Rainwater is deeply concerned about Peak Oil. In the article, Mr. Rainwater said, “This is the first scenario I’ve seen where I question the survivability of mankind.” Mr. Rainwater first became concerned about Peak Oil after reading “The Long Emergency” by James Howard Kunstler.
According to Bill McKenzie, with the Dallas Morning News, the primary reason that President Bush used the “Addicted to OIl” phrase in his state of the Union Speech was the Fortune article about Richard Rainwater, and again Mr. Rainwater became concerned about Peak Oil after reading Mr. Kunstler’s book.
On November 1, 2005 the Greater Dallas Planning Council and the Southern Methodist University Environmental Sciences Department cosponsored a symposium featuring Mr. Kunstler and Matthew R. Simmons entitled “The Unfolding Energy Crisis and its Impact on Development Patterns.” Mr. Pickens, via BP Capital, was one of the lead underwriters of the event.
Mr. Pickens, several of his associates, and several other notable Dallas businessmen such as Herbert Hunt were at the Simmons/Kunstler symposium, but no one from your respective editorial and news departments were able to make the event--despite multiple notices of the event.
In any case, Mr. Pickens has publicly stated that he believes that the world is at peak oil production. Mr. Pickens has publicly suggested increasing the gasoline tax, in an attempt to reduce oil consumption, with offsetting tax cuts elsewhere.
I certainly don’t speak for either Richard Rainwater or Boone Pickens, but my impression of these two gentlemen--along with Matt Simmons and Jim Kunstler--is that they are American patriots, in the truest sense of the word, who are trying to warn their fellow Americans about the dangers posed by Peak Oil.
In the Fortune interview, Mr. Rainwater was quoted as follows, “I believe in Hubbert’s Peak. I came out of Texas. I watched oil fields reach peak and go over, and I’ve watched how people would do all they could, put whatever amount of money into the field, and they couldn’t do anything about it.”
Much of the Peak Oil debate is based on pioneering work done by a famous Texas born geoscientist, M. King Hubbert. My coauthor, “Khebab,” and I wrote an article that was published on the Energy Bulletin website, “M. King Hubbert's Lower 48 Prediction Revisited: What can 1970 and Earlier Lower 48 Oil Production Data Tell Us About Post-1970 Lower 48 Oil Production?” Following is an excerpt from that article.
Fifty years ago this week, on March 8, 1956, at a meeting of the American Petroleum Institute in San Antonio, Texas, M. King Hubbert, in the preprinted version of his prepared remarks, had the following statement, "According to the best currently available information, the production of petroleum and natural gas on a world scale will probably pass its climax within the order of a half century (i.e., by 2006), while for both the United States and for Texas, the peaks of production may be expected to occur with the next 10 or 15 years (i.e., 1966 to 1971)." As more and more people are learning, Lower 48 oil production, as predicted by Dr. Hubbert, peaked in 1970, and it has fallen fairly steadily since 1970.
Kenneth Deffeyes, in Chapter Three of his recent book, "Beyond Oil: The View From Hubbert's Peak," described a simplified way of predicting the production peaks for various regions and for their subsequent declines. One simply plots annual production (P) divided by cumulative production to date (Q) on the vertical axis, or P/Q, versus Q on the horizontal axis. Stuart Staniford, on The Oil Drum Blog, has described this technique as "Hubbert Linearization" or HL.
With time, a HL data set starts to show a linear progression, and one can extrapolate the data down to where P is effectively zero, which gives one Qt, or ultimate recoverable reserves for the region. Based on the assumption that production tends to peak at about 50% of Qt, one can generate a predicted production profile for the region. The Lower 48 peaked at 48.5% of Qt.
Using the HL technique, Dr. Deffeyes, an associate of Dr. Hubbert, predicted that the world crossed the mathematical 50% of Qt mark on December 16, 2005. In other words, Dr. Deffeyes believes that the world is now where the Lower 48 was at in the early Seventies.
We used the HL method to predict post-1970 Lower 48 cumulative oil production, using only 1970 and earlier production data. Our work indicated that the HL method was 98.7% accurate in predicting post-1970 Lower 48 cumulative oil production.
We need to differentiate between conventional and nonconventional oil. Perhaps the best way to differentiate the two types of oil is to classify it the following way. Conventional--the oil will move to a wellbore on its own. Nonconventional--the oil and oil-like solids have to be surface mined or heated in order to move to a wellbore (or synthesized from lighter hydrocarbons).
Dr. Deffeyes estimates that we that we have two trillion barrels of recoverable conventional oil reserves worldwide and that we have used half of this amount.
Fossil fuels can be viewed as a continuum, from natural gas, to natural gas liquids, to condensate, to light sweet crude oil to heavy sour crude oil to bitumen to coal. (Kerogen, a precursor to bitumen, can also be processed to yield oil.) This list is a progression from gas, to liquid to solid. It is also a progression from cleanest, natural gas, to dirtiest, coal.
The world wants Liquid Transportation Fuels (LTF’s)--gasoline, diesel and jet fuel. LTF’s can be obtained for the least expenditures of energy and capital from light sweet crude. It only makes sense that light sweet crude will peak before heavy sour, and based on the current historically high spreads between light sweet crude and heavy sour crude, that appears to be the case.
The world is increasingly turning toward the endpoints--natural gas/natural gas liquids on the light end and bitumen/coal on the heavy end--in an attempt to maintain and increase our supply of LTF’s. There are several problems. These are hugely capital intensive programs that tend to produce liquids at very low rates compared to conventional oil sources, and on the heavy end there are some fairly severe environmental consequences. Another point that is often overlooked is that every fossil fuel resource, except for kerogen, is currently being commercially exploited. In other words, we are simply talking about increasing our rate of extraction of our finite fossil fuel resource base in a desperate attempt to maintain the current American way of life of driving $50,000 SUV’s on 50 mile roundtrips to and from $500,000 mortgages.
Currently, the most significant source of nonconventional oil is the tar sands play in Alberta, Canada, where bitumen is being extracted via surface mining or via the injection of steam into deeper beds.
From fossil fuel and nuclear sources, the world currently uses the energy equivalent of a billion barrels of oil (Gb) every five days. The mighty East Texas Oil Field, the foundation of so many Dallas fortunes, the largest oil field in the Lower 48, and the field that was largely responsible for providing the oil to power the Allies victory over the Axis powers in World War II, made about 5.5 Gb. The field is currently producing 1.2 million barrels of water per day, with a 1% oil cut. It took about 75 years to pretty much fully deplete the East Texas Field. In terms of oil equivalent, the Barnett Shale Gas Play in North Texas should ultimately produce, over several decades, on the order of 4-5 Gbe.
The world uses, from nuclear and fossil fuel sources, the energy equivalent of the recoverable reserves in the East Texas oil Field or the Barnett Shale Play in less than 30 days.
In the 4/2/06 Star Telegram, Automotive Journalist Ed Wallace, in the classified advertising section, wrote a rebuttal to the Peak Oil theories. Mr. Wallace’s two basic points: (1) improved technology will increase recoverable conventional reserves by 50% to 3,000 Gb and (2) nonconventional oil sources will add another 3,000 Gb. Therefore, based on Mr. Wallace’s estimates, we have used 1,000 Gb out of a 6,000 Gb resource base.
In the Viewpoints (Op-Ed) section of the Dallas Morning News, similar “cornucopian” energy abundance articles were published last year making basically the same points that Mr. Wallace made.
In regard to the technology issue, this assertion is directly contradicted by our experience in Texas (peaked at 54% of Qt), the overall Lower 48 (peaked at 49% of Qt) and the North Sea (peaked at 52% of Qt). Nothing the industry has tried in these regions has reversed the production declines once about half of the oil reserves were consumed. The reason is best illustrated by the East Texas field, now producing water with a 1% oil cut. What can better technology do to help a field that has watered out?
In regard to the nonconventional sources of oil, Mr. Wallace is primarily focused on the Canadian tar sands and shale oil (kerogen). The tar sands play is a proven commercial success, that is however hugely energy intensive and that is also yielding vast amounts of contaminated waste water. Mr. Wallace cites the most widely used estimate of 175 Gb in recoverable reserves (note that this should be discounted by about 35% to 50% to get net energy equivalent). He also cited a vague estimate by a Shell executive of 2,000 Gb, that can’t be currently recovered. There is one interesting research program testing some new shale oil technologies, but there is nothing commercial yet.
In any case, let’s look at past and current estimates of Canadian tar sands production. In 2003, the US Energy Information Agency (EIA) estimated that total Canadian oil production--driven by increasing tar sands production--would increase by 700,000 BOPD from 2003 to 2005. The reality? Total Canadian oil production fell from 2003 to 2005. The tar sands production fell short of estimates, and the increasing tar sands production the Canadians had could not make up for the decline in conventional Canadian oil production.
The Canadians themselves are estimating that tar sands production will only increase to about three million BOPD (mbpd) in 2016 from one mbpd today. Note that we will probably start losing a net two mbpd to four mbpd in conventional oil production per year, starting this year. Again, note that you have to discount the tar sands production by 35% to 50% to get net energy.
In effect, Mr. Wallace, and the other energy cornucopians see no problem with the $50,000 Hummer, $500,000 mortgage way of life.
Messrs. Rainwater and Pickens disagree. I can’t speak for them, but I assume that they believe that while nonconventional oil will help, it will only serve to slow the rate of decline of total oil production.
Some types of ethanol production (not from corn sources) appear have some possibilities, but there are a number of problems. Among the problems is a basic conflict between land devoted to food production and land devoted to fuel production. By the way, the US is probably now a net food importer. Currently, the US uses up to 10 calories of fossil fuels to produce one calorie of food. Ponder the impact on our food supply of a declining oil supply.
I realize that US media companies are facing severe economic pressures, and I realize that you are heavily dependent on advertising revenues from the housing/auto industries and from related companies. However, in my opinion we have hit the iceberg. The US media can lash themselves to the sinking ship, by failing to face reality, or you can face the reality of finite energy resources and start heading for the lifeboats.
I am supporting a proposal to abolish the Payroll (Social Security + Medicare) Tax and to replace it with an energy tax, principally a tax on liquid transportation fuels. This would unleash powerful economic forces against profligate energy use. Since it is in effect a consumption tax, it would tax those who currently don’t pay the Payroll Tax, by using cash. Instead of taxing payrolls to fund the Social Security and Medicare systems, we would instead tax energy consumption.
Alan Drake, a consulting engineer, has written a compelling article advocating a crash program of electrifying our transportation system, with special emphasis on Urban Rail.
I am working with a small group regarding the possibility of a Fall symposium on the Energy Tax and Urban Rail proposals, and we would be delighted to have support from The Fort Worth Star Telegram and/or The Dallas Morning News.
Note that these two proposals would address: the Social Security/Medicare crisis; the Peak Oil crisis; the loss of farmland due to suburban sprawl and Global Warming issues. We would replace “dumb growth” with “smart growth,” New Urbanism projects along mass transit lines.
In addition, I would at least ask you to give your readers a balanced report on the Peak Oil issue. Two leading citizens of your respective cities--Richard Rainwater and T. Boone Pickens--are deeply concerned about Peak Oil. The stated mission of the Fort Worth Star Telegram is: “Earning the People’s Trust Daily.” I assume that the Dallas Morning New concurs with this mission statement.
In my opinion, the US media have two choices regarding the Peak Oil issue. To paraphrase Winston Churchill, you can now have either your honor or the status quo. If you do nothing regarding Peak Oil, you will soon have neither the status quo nor your honor.
Sincerely,
Jeffrey J. Brown
Fortune: The Rainwater Prophecy
Brown & Khebab: M. King Hubbert's Lower 48 Prediction Revisited
Wallace: A Theory Like Y2K, But For Cars...
Drake: Electrification of transportation as a response to peaking of world oil production
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
Jeffrey J. Brown is an independent petroleum geologist in the Dallas area. He can be contacted at westexas@aol.com .
He encourages readers to borrow freely from his letter and to write their own letters to media organizations.
-BA
by Jeffrey J. Brown
April 2, 2006
Mr. Wesley R. Turner, President & Publisher
Fort Worth Star Telegram
Mr. James H. Moroney , III, Publisher & CEO
The Dallas Morning News
Subject: What Are Two Texas Billionaires,
Richard Rainwater & T. Boone Pickens,
Saying About Peak Oil & Why Aren’t You Listening?
Gentlemen:
I realize that I don’t have to introduce Richard Rainwater and Boone Pickens to you two gentlemen, but for the benefit of those who may not be familiar with Messrs. Rainwater and Pickens, following are brief introductions.
Richard Rainwater is the Texas based businessman who was chiefly responsible for turning the Bass Family’s inheritance of $50 into a $5 billion dollar fortune. Mr. Rainwater was therefore indirectly responsible for the remarkable urban renaissance of downtown Fort Worth, as a result of the Bass family’s massive investments. Mr. Rainwater also had a material role in George W. Bush’s selection as Managing Partner of the Texas Rangers Baseball Team, which launched Mr. Bush on his way to the Governor’s Mansion and then to the White House.
Mr. Pickens, now based in Dallas, has had a long and storied career in the oil and gas industry. Like most Texas oilmen, Mr. Pickens has had his ups and downs. Most recently he has been on an up cycle, via his investment firm, BP Capital.
These two gentlemen share an uncanny and proven ability to accurately predict future trends. The only real mistake that I am aware of is Mr. Pickens’ timing regarding natural gas prices some years ago. He was right about the price move, but he was just a little early.
Mr. Rainwater was profiled in the 12/14/05 issue of Fortune Magazine, “The Rainwater Prophecy.” Mr. Rainwater is deeply concerned about Peak Oil. In the article, Mr. Rainwater said, “This is the first scenario I’ve seen where I question the survivability of mankind.” Mr. Rainwater first became concerned about Peak Oil after reading “The Long Emergency” by James Howard Kunstler.
According to Bill McKenzie, with the Dallas Morning News, the primary reason that President Bush used the “Addicted to OIl” phrase in his state of the Union Speech was the Fortune article about Richard Rainwater, and again Mr. Rainwater became concerned about Peak Oil after reading Mr. Kunstler’s book.
On November 1, 2005 the Greater Dallas Planning Council and the Southern Methodist University Environmental Sciences Department cosponsored a symposium featuring Mr. Kunstler and Matthew R. Simmons entitled “The Unfolding Energy Crisis and its Impact on Development Patterns.” Mr. Pickens, via BP Capital, was one of the lead underwriters of the event.
Mr. Pickens, several of his associates, and several other notable Dallas businessmen such as Herbert Hunt were at the Simmons/Kunstler symposium, but no one from your respective editorial and news departments were able to make the event--despite multiple notices of the event.
In any case, Mr. Pickens has publicly stated that he believes that the world is at peak oil production. Mr. Pickens has publicly suggested increasing the gasoline tax, in an attempt to reduce oil consumption, with offsetting tax cuts elsewhere.
I certainly don’t speak for either Richard Rainwater or Boone Pickens, but my impression of these two gentlemen--along with Matt Simmons and Jim Kunstler--is that they are American patriots, in the truest sense of the word, who are trying to warn their fellow Americans about the dangers posed by Peak Oil.
In the Fortune interview, Mr. Rainwater was quoted as follows, “I believe in Hubbert’s Peak. I came out of Texas. I watched oil fields reach peak and go over, and I’ve watched how people would do all they could, put whatever amount of money into the field, and they couldn’t do anything about it.”
Much of the Peak Oil debate is based on pioneering work done by a famous Texas born geoscientist, M. King Hubbert. My coauthor, “Khebab,” and I wrote an article that was published on the Energy Bulletin website, “M. King Hubbert's Lower 48 Prediction Revisited: What can 1970 and Earlier Lower 48 Oil Production Data Tell Us About Post-1970 Lower 48 Oil Production?” Following is an excerpt from that article.
Fifty years ago this week, on March 8, 1956, at a meeting of the American Petroleum Institute in San Antonio, Texas, M. King Hubbert, in the preprinted version of his prepared remarks, had the following statement, "According to the best currently available information, the production of petroleum and natural gas on a world scale will probably pass its climax within the order of a half century (i.e., by 2006), while for both the United States and for Texas, the peaks of production may be expected to occur with the next 10 or 15 years (i.e., 1966 to 1971)." As more and more people are learning, Lower 48 oil production, as predicted by Dr. Hubbert, peaked in 1970, and it has fallen fairly steadily since 1970.
Kenneth Deffeyes, in Chapter Three of his recent book, "Beyond Oil: The View From Hubbert's Peak," described a simplified way of predicting the production peaks for various regions and for their subsequent declines. One simply plots annual production (P) divided by cumulative production to date (Q) on the vertical axis, or P/Q, versus Q on the horizontal axis. Stuart Staniford, on The Oil Drum Blog, has described this technique as "Hubbert Linearization" or HL.
With time, a HL data set starts to show a linear progression, and one can extrapolate the data down to where P is effectively zero, which gives one Qt, or ultimate recoverable reserves for the region. Based on the assumption that production tends to peak at about 50% of Qt, one can generate a predicted production profile for the region. The Lower 48 peaked at 48.5% of Qt.
Using the HL technique, Dr. Deffeyes, an associate of Dr. Hubbert, predicted that the world crossed the mathematical 50% of Qt mark on December 16, 2005. In other words, Dr. Deffeyes believes that the world is now where the Lower 48 was at in the early Seventies.
We used the HL method to predict post-1970 Lower 48 cumulative oil production, using only 1970 and earlier production data. Our work indicated that the HL method was 98.7% accurate in predicting post-1970 Lower 48 cumulative oil production.
We need to differentiate between conventional and nonconventional oil. Perhaps the best way to differentiate the two types of oil is to classify it the following way. Conventional--the oil will move to a wellbore on its own. Nonconventional--the oil and oil-like solids have to be surface mined or heated in order to move to a wellbore (or synthesized from lighter hydrocarbons).
Dr. Deffeyes estimates that we that we have two trillion barrels of recoverable conventional oil reserves worldwide and that we have used half of this amount.
Fossil fuels can be viewed as a continuum, from natural gas, to natural gas liquids, to condensate, to light sweet crude oil to heavy sour crude oil to bitumen to coal. (Kerogen, a precursor to bitumen, can also be processed to yield oil.) This list is a progression from gas, to liquid to solid. It is also a progression from cleanest, natural gas, to dirtiest, coal.
The world wants Liquid Transportation Fuels (LTF’s)--gasoline, diesel and jet fuel. LTF’s can be obtained for the least expenditures of energy and capital from light sweet crude. It only makes sense that light sweet crude will peak before heavy sour, and based on the current historically high spreads between light sweet crude and heavy sour crude, that appears to be the case.
The world is increasingly turning toward the endpoints--natural gas/natural gas liquids on the light end and bitumen/coal on the heavy end--in an attempt to maintain and increase our supply of LTF’s. There are several problems. These are hugely capital intensive programs that tend to produce liquids at very low rates compared to conventional oil sources, and on the heavy end there are some fairly severe environmental consequences. Another point that is often overlooked is that every fossil fuel resource, except for kerogen, is currently being commercially exploited. In other words, we are simply talking about increasing our rate of extraction of our finite fossil fuel resource base in a desperate attempt to maintain the current American way of life of driving $50,000 SUV’s on 50 mile roundtrips to and from $500,000 mortgages.
Currently, the most significant source of nonconventional oil is the tar sands play in Alberta, Canada, where bitumen is being extracted via surface mining or via the injection of steam into deeper beds.
From fossil fuel and nuclear sources, the world currently uses the energy equivalent of a billion barrels of oil (Gb) every five days. The mighty East Texas Oil Field, the foundation of so many Dallas fortunes, the largest oil field in the Lower 48, and the field that was largely responsible for providing the oil to power the Allies victory over the Axis powers in World War II, made about 5.5 Gb. The field is currently producing 1.2 million barrels of water per day, with a 1% oil cut. It took about 75 years to pretty much fully deplete the East Texas Field. In terms of oil equivalent, the Barnett Shale Gas Play in North Texas should ultimately produce, over several decades, on the order of 4-5 Gbe.
The world uses, from nuclear and fossil fuel sources, the energy equivalent of the recoverable reserves in the East Texas oil Field or the Barnett Shale Play in less than 30 days.
In the 4/2/06 Star Telegram, Automotive Journalist Ed Wallace, in the classified advertising section, wrote a rebuttal to the Peak Oil theories. Mr. Wallace’s two basic points: (1) improved technology will increase recoverable conventional reserves by 50% to 3,000 Gb and (2) nonconventional oil sources will add another 3,000 Gb. Therefore, based on Mr. Wallace’s estimates, we have used 1,000 Gb out of a 6,000 Gb resource base.
In the Viewpoints (Op-Ed) section of the Dallas Morning News, similar “cornucopian” energy abundance articles were published last year making basically the same points that Mr. Wallace made.
In regard to the technology issue, this assertion is directly contradicted by our experience in Texas (peaked at 54% of Qt), the overall Lower 48 (peaked at 49% of Qt) and the North Sea (peaked at 52% of Qt). Nothing the industry has tried in these regions has reversed the production declines once about half of the oil reserves were consumed. The reason is best illustrated by the East Texas field, now producing water with a 1% oil cut. What can better technology do to help a field that has watered out?
In regard to the nonconventional sources of oil, Mr. Wallace is primarily focused on the Canadian tar sands and shale oil (kerogen). The tar sands play is a proven commercial success, that is however hugely energy intensive and that is also yielding vast amounts of contaminated waste water. Mr. Wallace cites the most widely used estimate of 175 Gb in recoverable reserves (note that this should be discounted by about 35% to 50% to get net energy equivalent). He also cited a vague estimate by a Shell executive of 2,000 Gb, that can’t be currently recovered. There is one interesting research program testing some new shale oil technologies, but there is nothing commercial yet.
In any case, let’s look at past and current estimates of Canadian tar sands production. In 2003, the US Energy Information Agency (EIA) estimated that total Canadian oil production--driven by increasing tar sands production--would increase by 700,000 BOPD from 2003 to 2005. The reality? Total Canadian oil production fell from 2003 to 2005. The tar sands production fell short of estimates, and the increasing tar sands production the Canadians had could not make up for the decline in conventional Canadian oil production.
The Canadians themselves are estimating that tar sands production will only increase to about three million BOPD (mbpd) in 2016 from one mbpd today. Note that we will probably start losing a net two mbpd to four mbpd in conventional oil production per year, starting this year. Again, note that you have to discount the tar sands production by 35% to 50% to get net energy.
In effect, Mr. Wallace, and the other energy cornucopians see no problem with the $50,000 Hummer, $500,000 mortgage way of life.
Messrs. Rainwater and Pickens disagree. I can’t speak for them, but I assume that they believe that while nonconventional oil will help, it will only serve to slow the rate of decline of total oil production.
Some types of ethanol production (not from corn sources) appear have some possibilities, but there are a number of problems. Among the problems is a basic conflict between land devoted to food production and land devoted to fuel production. By the way, the US is probably now a net food importer. Currently, the US uses up to 10 calories of fossil fuels to produce one calorie of food. Ponder the impact on our food supply of a declining oil supply.
I realize that US media companies are facing severe economic pressures, and I realize that you are heavily dependent on advertising revenues from the housing/auto industries and from related companies. However, in my opinion we have hit the iceberg. The US media can lash themselves to the sinking ship, by failing to face reality, or you can face the reality of finite energy resources and start heading for the lifeboats.
I am supporting a proposal to abolish the Payroll (Social Security + Medicare) Tax and to replace it with an energy tax, principally a tax on liquid transportation fuels. This would unleash powerful economic forces against profligate energy use. Since it is in effect a consumption tax, it would tax those who currently don’t pay the Payroll Tax, by using cash. Instead of taxing payrolls to fund the Social Security and Medicare systems, we would instead tax energy consumption.
Alan Drake, a consulting engineer, has written a compelling article advocating a crash program of electrifying our transportation system, with special emphasis on Urban Rail.
I am working with a small group regarding the possibility of a Fall symposium on the Energy Tax and Urban Rail proposals, and we would be delighted to have support from The Fort Worth Star Telegram and/or The Dallas Morning News.
Note that these two proposals would address: the Social Security/Medicare crisis; the Peak Oil crisis; the loss of farmland due to suburban sprawl and Global Warming issues. We would replace “dumb growth” with “smart growth,” New Urbanism projects along mass transit lines.
In addition, I would at least ask you to give your readers a balanced report on the Peak Oil issue. Two leading citizens of your respective cities--Richard Rainwater and T. Boone Pickens--are deeply concerned about Peak Oil. The stated mission of the Fort Worth Star Telegram is: “Earning the People’s Trust Daily.” I assume that the Dallas Morning New concurs with this mission statement.
In my opinion, the US media have two choices regarding the Peak Oil issue. To paraphrase Winston Churchill, you can now have either your honor or the status quo. If you do nothing regarding Peak Oil, you will soon have neither the status quo nor your honor.
Sincerely,
Jeffrey J. Brown
Fortune: The Rainwater Prophecy
Brown & Khebab: M. King Hubbert's Lower 48 Prediction Revisited
Wallace: A Theory Like Y2K, But For Cars...
Drake: Electrification of transportation as a response to peaking of world oil production
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
Jeffrey J. Brown is an independent petroleum geologist in the Dallas area. He can be contacted at westexas@aol.com .
He encourages readers to borrow freely from his letter and to write their own letters to media organizations.
-BA
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