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)
‘The Obamas’ Confirms Worst Fears About the President
That link is not applicable to this article. It is not free market capitalism to engage in welfare fraud.
Primary season carry forward to regular election.
All the ammo will be then used by the Left.
Yet we on here are not loading the ammo for the right.
So I will load it as always, Im voting for Santorum,
but if Romney makes it, he will be my vote not Obama.
I will not vote for Obama, Romney, or Paul.
There’s another reason for you not to support Romney. He’ll lose in the general.
That’s your opinion anyone will beat Obama if the right attacks with the real gut busters, and I will keep the flow of the real vetting for all to see.
If you would like to see Our site,
click it http://www.freewebs.com/globalwatch/
Tea Party Gulf Coast Florida!
We are being served a litany of negative "facts" about Mitt Romney. Yes, he has a thick resume. No doubt he's broken a lot of eggs as he's made many omelets.
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?
Another truth about Mitt Romney: He ran for and got elected Governor of Massachusetts as a Republican. Unless you've lived in and voted in Massachusetts you do not understand what an accomplishment that is: the looks of horror the poll workers give you when you request a Republican ballot, the campaign against Scott Brown where the Democrats thought they could win just by branding Scott Brown as a "Republican".
We live in a country that voted for "change" and "yes we can". It seems to me that the U.S. as a whole is becoming a big Massachusetts. Will Massachusetts vote for Rick Santorum, Newt Gingrich, Rick Perry, etc.? Do you want to see more appointees like Sonya Sotomayor or Elena Kagan?
Yeah, I am not here to be a Romney spokesman. I am just going to tell you it is delusional to equate any Republican candidate with Hussein.
Romney, as governor of Massachusetts, did not nominate a single conservative to be a judge.
Romney banned the Boy Scouts because they wouldn’t accept gay Scout leaders.
Romney Wanted Vet Benefits rolled into Welfare
Romney Signed State Paid Abortion Legislation
Romney Signed Gay Marriage Legislation
Romney claimed to be more liberal than Ted Kennedy.
There is no way I will ever vote for Romney. He is a liar, a scoundrel, and an Anti-Life, Anti-Gun, Anti-Family, Pro-Big Government liberal.
How is that different than Obama?
If it looks like a duck, waddles like a duck, and quacks like a duck....it’s a duck.
(PS: Not to be confused with Moose Hunting in Montana.)
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?
- - - - - - - - -
I don’t believe it. Mitt is a democrat pretending to be a republican. Policy wise he is the SAME as Obama - not better at all.
Romney will lie and say ANYTHING to get elected and once elected, will keep the status quo and keep this country on track for destruction.
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.
You do your intellect a disservice by not taking my comment in context. My comment was only an endorsement when compared with the real life alternative: another four years of utter hatred for America occupying the Oval Office.
I am not here to be a Romney apologist—but the comparison between him and Hussein, on the whole, is to compare apples and oranges.
Hussein hates America, and Romney doesn’t...I’d rather pray for a flawed man for the next four years than endure the storm of fascism from a regime that hates Christianity, the Constitution, and capitalism.
Four executives at Damon were indicted for conspiracy: Joseph Isola, Beno Kon, William Thurston and Gerald Kullen.
It was more complicated than I wrote.
For example, Damon took an End-Stage Renal Disease panel and would 'unbundle' it into two different tests and submit them on different days.
And this is another part of it (there were a lot of tentacles). From U.S. v. Thurston (do you want the full cite?):
The essence of the scheme charged was that Damon, through Thurston and others, bundled the ferritin blood test-previously ordered by doctors less than two percent of the time-into a panel of blood tests known as the LabScan, which was ordered thirty to forty percent of the time. When doctors or patients (instead of insurers) paid for the bundled LabScan, Damon provided the ferritin test for free, leading doctors to believe there was no extra charge for this test. Doctors were not told that, when Medicare paid for the bundled LabScan, Medicare was charged extra for the ferritin test. Indeed, both a letter and marketing materials indicated the added ferritin test was free; that is, that there was no charge beyond the standard LabScan charge.
Those unnecessary ferritin tests were not free to Medicare.
Damon charged Medicare roughly $21 per ferritin test on top of the approximately $24 charged for the LabScan. Nor were doctors told that the ferritin test could be ordered separately; the test requisition form did not offer that option. The physicians, then, were induced to order and to certify as medically necessary a large number of ferritin tests that were not medically necessary.
There were LDS overtones. In U.S. v. Thurston (a different case), No. 05-2271 (5th Cir., July 26, 2006), the Court noted that:
"Isola accepted the government's offer, but Thurston and another codefendant declined Thurston rejected the offer because a guilty plea "would cause him to be shunned in the Mormon church."
Thurston was found guilty and for sentencing purposes was found to be "an organizer or leader of extensive criminal activiity" (a level-four enhancement). So he would be the organizer or leader of a fraud that the government said "involved literally millions of fraudulent claims" over a period of years - but wouldn't plead guilty as another defendant did because he would be shunned.
Good job, Scout!
I knew about these people because this is what I do; I just had no idea Romney was a director of Damon when it was engaged in the blatant fraud.
Romney was a board member; those who were indicted were executives.
However, I'd like to know if the company had a Compliance Plan and a Compliance Officer. And I'd like to know what kind of blip in the financials all of this fraudulent billing created.
Ping to #71
The truth about Romney is that he is a liar. A big government, statist/abortionist liar!! The man has no core principles and will say or do whatever he thinks he must say or do to get elected.
If you wish to promote Romney, please do it elsewhere. FR is and will remain a pro-life, pro-family, limited government grassroots conservative site!!
Romney and his abortionist RomneyCare is none of the above.
Continue pushing Romney on FR and we will part company.
You can bet "money" Barry will expose and drive Romney to the mat on this alone.....as has been said...."Poster Boy Romney" for the great gap between the haves and have nots.
Most aren't going to tell you one way or another how things are behind closed doors. Mormonism is a hierarchy...Romney's one of the top ones....the people at the bottom haven't a clue about it's leaderships dark side...it's kept from them...they need the membership at the bottom to fiance operations and lifestyles for those at the top..... But Romney knows fully well...He's one of the many leaders who uses it's membership to acquire and maintain the wealth and holdings the leaders officiate over.....they are "required" to tithe a portion of their income and if they get behind there are consequences for not paying up.
I respect that you are not a Romney supporter.
Beyond that we will have to disagree.
Is Zero an abomination? Absolutely. Has he accelerated the destruction of America? Absolutely.
Now, let’s turn to Romney.
Will he turn this country back from the brink? Nothing in his history of actual governing would
indicate he has done anything except support gay marriage, abortion, further government taxation,
and increasing governmental power. Now he wants to become president, based on that behavior.
My vote is not available to people who pretend to be conservative, while in action are liberal,
no matter who they are running against.
What is needed now is not more liberalism. Not bigger, more powerful governments. What is needed
is someone with BALLS who will take a stand and turn the ship hard. If that does not happen now,
the iceberg we hit will render any differences between Zero and Zero II insignificant in history.
For this reason, while I agree tentatively with your assessment, in practical terms, any differences
between the two are meaningless and really just a matter of how fast our ship is traveling when
it hits the iceberg.
You seem to be willing to accept a slower rate of speed when we plow into the iceberg. I am not.
We each get one vote.
For one thing....Obama's administration used Romney's healthcare model and even recruited Romney's healthcare advisors to help put together Obamacare...Cozy team-work there wouldn't you say?.... So there will be a national healthcare program under Romney...though he'll simple tweak Obamacare enough to say he "changed it" for the American people and did as promised.
Furthermore Romney 'pretends' not to be a socialist whereas at least Obama is clearly seen as such....when you look at their positions there is very little difference between the two...they both say the "right things" for the moment to get their way even though neither believe what their own lips are saying. Remarkably... you need to hear Romney's wife...
Quote....."He can argue any side of a question..and sometimes you even think he's really believing his arguement...but he's not"....
Now that speaks volumes!
And of course Romney hiring 'more' liberal democrats as judicial apppointments then Republicans...well the proofs in the pudding.
And finally though certainly not all... Romney has raised more money from lobbyists than all of the other Republican candidates combined. .....So who do you think he is going to listen to?.... the American people or the lobbyists? Four more years of Barry would be a complete and total nightmare.....But so would four years of Mitt Romney....they are two peas in a pod.
I'd rather deal with a "known" enemy then someone pretending to be something they aren't.
Narcissistic personality disorder is characterized by dramatic, emotional behavior, in the same category as antisocial and borderline personality disorders.
Narcissistic personality disorder symptoms may include:
* Believing that youre better than others
* Fantasizing about power, success and attractiveness
* Exaggerating your achievements or talents
* Expecting constant praise and admiration
* Believing that youre special and acting accordingly
* Failing to recognize other peoples emotions and feelings
* Expecting others to go along with your ideas and plans
* Taking advantage of others
* Expressing disdain for those you feel are inferior
* Being jealous of others
* Believing that others are jealous of you
* Trouble keeping healthy relationships
* Setting unrealistic goals
* Being easily hurt and rejected
* Having a fragile self-esteem
* Appearing as tough-minded or unemotional
Although some features of narcissistic personality disorder may seem like having confidence or strong self-esteem, its not the same. Narcissistic personality disorder crosses the border of healthy confidence and self-esteem into thinking so highly of yourself that you put yourself on a pedestal. In contrast, people who have healthy confidence and self-esteem dont value themselves more than they value others.
When you have narcissistic personality disorder, you may come across as conceited, boastful or pretentious. You often monopolize conversations. You may belittle or look down on people you perceive as inferior. You may have a sense of entitlement. And when you dont receive the special treatment to which you feel entitled, you may become very impatient or angry. You may insist on having the best of everything the best car, athletic club, medical care or social circles, for instance.
Romney Was Board Member of Marriott Hotels which sell in-room hard core porn..
so much for “family values”
Why would he even run with all these things against him?
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