Skip to comments.Romney Was Board Member Of Company Fined Over $100 Million For Medicare Fraud -- Criminal Fine
Posted on 01/18/2012 8:28:27 AM PST by xzins
DAMON CLINICAL LABORATORIES
Romney Was Board Member Of Company Fined Over $100 Million For Medicare Fraud At The Time, It Was The Largest Criminal Fine For Health Care Fraud In History
Romney Sat On Board Of Damon Clinical Laboratories, A Bain Capital Portfolio Company Fined Nearly $120 Million In 1996 Due To Medicare Fraud. A Needham clinical laboratory agreed yesterday to pay $119 million in criminal and civil fines after pleading guilty to charges that it defrauded the nations Medicare system by seeking reimbursements on millions of dollars worth of unnecessary blood tests. Damon Clinical Laboratories Inc. admitted it tried to boost its profits by submitting the unnecessary tests. The company, the government said, misled doctors into ordering the tests, ensuring that they would be covered by Medicare, the federal health care program for the elderly. (Kimberly Blanton, Needham Lab Fined $ 119m For Fraud, The Boston Globe, 10/10/96)
. At The Time, Largest Criminal Fine In Massachusetts History: The settlement would mark the largest criminal fine ever levied in Massachusetts. (Kimberly Blanton, Needham Lab Fined $ 119m For Fraud, The Boston Globe, 10/10/96)
. At The Time, Largest Health Care Fraud Criminal Fine In History: The $35.3 million criminal fine in the Damon case, one piece of the $119 million total settlement, is the largest ever recovered in a health care fraud case. (Kimberly Blanton, Needham Lab Fined $ 119m For Fraud, The Boston Globe, 10/10/96)
Romney Was On Damons Board Of Directors While The Fraud Took Place He Initially Claimed He Was Unaware Of Any Criminal Investigation. Mitt Romney, former Republican challenger to US Sen. Edward M. Kennedy, who was a member of Damons board, said he was unaware of any investigation. Romney said that [Damons then-CEO Robert] Rosen told the board in about 1992 that all current practices at the company were now in conformity with government regulations and that in the past there may have been practices which would not be deemed appropriate. (Kimberly Blanton, Needham Lab Fined $ 119m For Fraud, The Boston Globe, 10/10/96)
. Made Large Profits From A Criminal Scheme To Fraudulently Bill The Federal Medicare System
[Romney] and his venture capital firm made large profits from the 1993 sale of a Needham medical testing company whose robust revenues were generated in part from a criminal scheme to fraudulently bill the federal Medicare system for unnecessary blood tests. (Frank Phillips, Romney Profited On Firm Later Tied To Fraud, The Boston Globe, 10/10/02)
. Pure And Simple Corporate Greed Run Amok. Damon Corp. pleaded guilty in 1996 to a federal conspiracy charge of defrauding the government of $25 million between 1988 and 1993. It paid a record $119 million fine and penalty for a scheme that then-US Attorney Donald Stern labeled a case, pure and simple, of corporate greed run amok. (Frank Phillips, Romney Profited On Firm Later Tied To Fraud, The Boston Globe, 10/10/02)
1993: Immediately Following Acquisition By Corning, Damon Closed Plant In Needham Heights, Laid Off 115 Massachusetts Workers. Republican businessman Mitt Romney helped direct a Massachusetts medical diagnostics company toward a merger that resulted in the permanent closure of a Needham Heights plant and layoffs of about 115 Massachusetts workers. Damon Corp. was headquartered in Massachusetts for more than 30 years until it was purchased by Corning Inc. in 1993 and the Needham facility was closed. The day after the merger with Corning was completed, the new company notified the Massachusetts Department of Employment and Training that it was permanently closing the Needham plant and laying off about 115 people. (Meg Vaillancourt, Romney-Aided Deal Closed Damon Plant, The Boston Globe, 10/9/94)
. Romney Feared The Massachusetts Layoffs Would Come, But Voted To Approve Deal Anyway. As a board member, Romney pointed out he had a legally binding fiduciary responsibility to get the best deal he could for the shareholders, though he acknowledged that at the time he feared Corning would close down the plant and lay off the Massachusetts employees. No one met Cornings tender offer, which Romney described as stunning. He said he voted to accept the offer, as did the vast majority of other shareholders. There was nothing I could do. (Meg villancourt, Romney-Aided Deal Closed Damon Plant, The Boston Globe, 10/9/94)
As A Gubernatorial Candidate, Romney Claimed He Helped Uncover And Stop The Fraud At Damon.
[R]omney said Thursday he helped uncover the fraud at Damon and hired an outside law firm to investigate it.
We took action based on what was told to us by the law firm, Romney said (Ron DePasquale, Romney Downplays Report He Profited From Firm Tied To Fraud, The Associated Press, 10/10/02)
. Romney Tries To Take Credit: Mr. Romney said yesterday that he aided in uncovering and stopping the fraud one year before the sale. Mr. Romney said board members, including himself had started an inquiry that led to the disclosure. (John Monahan, Ex-Presidents Stump For OBrien, Romney, Telegram & Gazette [Worcester, MA], 10/11/02)
. Romney Has Said He Helped Uncover The Fraud But Never Reported It To Authorities. (Tom Benner, OBrien Sees Savings Possible In Budget, The Patriot Ledger [Quincy, MA], 10/23/02)
Federal Investigators Rebuffed Romneys Claims, Saying The Fraud Continued Until Bain And OtherOwners Sold Damon To Corning In 1993. A spokesman for Romney, Eric Fehrnstrom, said Thursday that Romney and other board members helped uncover the fraud at Damon after similar fraudulent practices were found at another laboratory in 1992. But court records, including statements by prosecutors and by Damon officials, indicated that the fraud continued until Corning purchased the firm. Prosecutors gave Corning sole credit for cleaning up the fraud. (Report: Mass. Candidate Romney Profited From Sale Of Firm That Later Admitted Medicare Fraud, The Associated Press, 10/10/02)
. Federal Officials Have Disputed Mr. Romneys Claim That He Helped Stop And Correct The Practice. Mr. Romney was a director from 1990 to 1993 and said he and the board of directors learned of the problem in 1993 when its own legal staff investigated the billings. Federal officials who prosecuted the case have disputed Mr. Romneys claim that he helped stop and correct the practice, saying the company did not report the fraud to federal authorities and the practice was stopped by the companys new owners after it was sold. (John Monahan, Romney Talks To Crowd At Fallon, Telegram & Gazette [Worcester, MA], 10/12/02)
. No Corrective Action Was Taken When Romney Was On The Board In the 1996 settlement, records show the [fraud] scheme was carried out between 1988 and the time that Damon was sold, indicating that no corrective action was taken when Romney was on the board and served as a member of its strategic planning committee. (Frank Phillips, Romney Profited On Firm Later Tied To Fraud, The Boston Globe, 10/10/02)
. Officials Gave Corning Sole Credit For Cleaning Up Damons Fraudulent Practices. [C]ourt documents
and Damons admission reveal that the fraudulent activity was occurring right up until the time Corning purchased the company from Bain and other owners. [D]amons filings with the federal Securities and Exchange Commission during the weeks and months just prior to the sale contain no mention of possible legal problems over its billing system, or potential negative impact that would require downward revenue revisions. (Frank Phillips, Romney Profited On Firm Later Tied To Fraud, The Boston Globe, 10/10/02) Damons Activities Cost US Taxpayers Nearly $40 Million, The Government Said. (Kimberly Blanton, Needham Lab Fined $ 119m For Fraud, The Boston Globe, 10/10/96)
Romney Personal Profit From Bains Sale Of Damon: More Than $470,000. Republican gubernatorial candidate Mitt Romney and his venture capital firm made large profits from the 1993 sale of a Needham medical testing company whose robust revenues were generated in part from a criminal scheme to fraudulently bill the federal Medicare system for unnecessary blood tests. Romney personally made $473,000 when Corning Inc. purchased Damon Corp., on whose board he served between 1990 and 1993. (Frank Phillips, Romney Profited On Firm Later Tied To Fraud, The Boston Globe, 10/10/02)
. Romney Earned Nearly $40,000 In Directors Fees Alone. Romneys firm, Bain Capital, and Romney himself were minority investors in Damon from 1990 through August 1993. The Belmont businessman sat on Damons board of directors, earning nearly $40,000 in directors fees, and was a member of the companys strategic planning committee when Damon was sold to Corning. (Meg Vaillancourt, Romney-Aided Deal Closed Damon Plant, The Boston Globe, 10/9/94)
Bain Capital Tripled Its Investment On The Deal: [Romneys] firm, Bain Capital, tripled its initial investment, making a profit of $7.4 million over a four-year period for its investors, according to copies of Bain documents obtained by the Globe. (Frank Phillips, Romney Profited On Firm Later Tied To Fraud, The Boston Globe, 10/10/02)
Romney Proud Of Role With Damon. Im proud of the small part I played in the growth of Damon, Romney said yesterday. Its something that Ted Kennedy doesnt have a clue about creating real jobs in the private sector. (Meg Vaillancourt, Romney-Aided Deal Closed Damon Plant, The Boston Globe, 10/9/94)
1. Clinton could only get a 10 year assault weapons ban passed, ROMNEY SIGNED A PERMANENT BAN IN 2004 !
2. Clinton could barely get "Don't ask don't tell" instituted, ROMNEY WAS GOVERNOR OF THE FIRST STATE TO LEGALIZE GAY MARRIAGE !
3. Hillary's health care summit failed. ROMNEY CHAMPIONED COMMIE ROMNEYCARE AS GOVERNOR !
4. Both Clinton and Romney dodged the Vietnam draft to spend time in Europe.
The list goes on and on.
I won't vote for Romney for the same reasons I didn't vote for Clinton....EVEN MORE SO, COME WHAT MAY !!
Tony Rezko, Barack Obama, the FBI Mole, and the Somnolent Chicago MSM
Any of our candidates are better than Obama
If you uncover fraud within your company and you don't report it, then you are a co-conspirator and accessory after the fact to the Fraud.
The corporate curtain apparently allowed Romney and Bain to profit from the fraud committed by their surrogate company without having the profits they sucked out of the parent company while it was defrauding the taxpayers seized.
I cannot understand how this guy can be considered presidential material.
Also for those Free Enterprise people out there, risk free corporatism is not Free Enterprise. It is crony corporatism. Romney and Bain should have had to pay back any profits he made while his surrogate company was engaged in Fraud. That kind of thing would deter this kind of Fraud.
Romney says Obama wrong-minded on unions
Mitt Romney today said the Obama administrations ties to labor unions are dragging down the nations economy and called on Congress to halt a federal agencys lawsuit against Boeing Co. for moving part of its production to the right-to-work state of South Carolina.
See post 58, if you think that they are different you are playing into the hands of the left.
I am a conservative first, then a Republican and Mitt is a lying liberal POS who is a ‘white and delightsome’ (to use a Mormon phrase) version OF Obama.
NO MITT NEVER
A number of romney apologists on here the final dozen or so posts. Their claim is that Romney is better than Obama, so we better not dredge up any of Romney’s dirty laundry. Hmmmm....
I’m sure Obama will not use the fact that Romney was enriched with money made via a medicare fraud scam.
The $119 million represented $35.2 million as a criminal fine and $83.7 to resolve related civil liabilities for $25 million in fraudulent billing.
(By comparison, I settled a FCA/Stark/Medicare Anti-Kickback claim for a client a few years earlier for under $15 million for claims of many, many multiples of $25 million, but there wasn't blatant fraud involved.)
The settlement includes the treble damages - three dollars recovered by the government for every fraudulent dollar billed - under the FCA.
What did Damon Labs do? When a physician ordered a common blood panels, Damon bundled three extra tests in the blood panels even though the physician did not request the extra tests. Then Damon billed Medicare for the panels, and charged separately for the three tests.
Mitt is lying when he says the company stopped the practice when he was on the board. According to the Office of Inspector General of the U.S. Department of Health and Human Services, "[t]he global settlement was reached with Corning, Inc., which earlier had purchased Damon and stopped the illegal billing." Source.
That’s the same gimmick Romney used to profit off of surrogate companies even when they went bankrupt most of the time. Normally a company’s assets get claimed for the creditors in a bankruptcy, but since Romney transferred those assets to Bain ahead of time, the creditors got stuck with the bill, and sometimes the taxpayers when government pension insurance bailed out the pension funds.
Bain and its co-investors extracted special payments of over $100 million from each company, enabling Bain to make a healthy profit even before re-selling the businesses a practice known as getting back your bait. Lenders say Bain is one of the firms that has taken the most in such payments, which companies usually make by taking on additional debt.
Mr. Romney, who remains an investor in Bain Capital, said he had not been involved in those decisions but acknowledged that such payments became part of the buyout business very early on.
It is one thing that if I had a chance to go back I would be more sensitive to, Mr. Romney said. It is always a balance. Great care has got to be taken not to take a dividend or a distribution from a company that puts that company at risk. He added that taking a big payment from a company that later failed would make me sick, sick at heart.
Warren E. Buffett, the legendary investor, has derided private equity firms as deal flippers who do little to increase the real value of their targets, profiting from rising prices driven in part by their own deals and by charging their acquisitions fees, fees, fees.
Thanks, Scoutmaster. Excellent info. Are you a lawyer?
I’ll take my chances on someone who has succeeded without being a community organizer. So ABO works for me.
I wish someone would look into the connections between Mark H. Willes and Mitt Romney. I think it could be really enlightening.
Wrong I am not a Romney Supporter, But continuous bashing of our candidates as I said, without vetting Obama and his cronies in equal time,
allows for our side feeding the left having leftists come in here and bash our guys with agreement from a variety of our members who want their candidate to win.
My point is equal time for the truth about the left,
not only our candidates.
Balancing the facts about our real opponent in the forum needs to be equally accomplished.
I back Rick Santorum for President and it is on the website our Tea Party shows. http://www.freewebs.com/globalwatch/
Romney co-conspirator to FRAUD and UNFIT FOR DUTY.
Mitt would LIE about something??? Shocking! /s
Romney is not OUR candidate. He is a shill for the Dems.
Obama is not our candidate he is a shill for the Communist new world order.
I’m not voting for either of them. Ever.
If the GOP insists on shoving Romney down our throats, it is time for the GOP to go the way of the Whigs.
“Romney does NOT hate America.”
Now that, is a ringing endorsement!
I suggest that you could better write it this way,
“RINOmney loves himself - forget America!”
“One truth about Mitt Romney is that he will be infinitely better a POTUS than the current holder of the position. Does anyone believe that to not be true?”
No. He will be slower that the current holder. He will drive you to the same place. If you are the frog in the warming pot of water, Willard will still boil the h&ll out of you. He’ll just get you there more slowly. In either case, you are boiled.
I will not accept a slow-boil candidate. I want someone who knows the desperate situation we are in and is willing to have the courage and self assurance to make MASSIVE changes. MASSIVE.
RINOmney, the slow-boiler is not the man to make MASSIVE changes.
This explains the Romney Vulture Capitalism scheme so everyone can understand it.
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