Romney Was Manager and Board Member of Corp Guilty of Medicare Fraud (More info

Debating in Tampa Florida this month, Mitt Romney strongly denied that his investment company Bain Capital did "any work with the government like Medicaid and Medicare." However, under Romney's "supervision," Bain purchased and ran the Damon Corporation which pled guilty to Federal conspiracy charges - as a result of tens of millions in systemic Medicare fraud...

According to a cited Forbes report, in 1989, Bain Capital purchased controlling interest in Damon Corp. a medical testing company located in Needham, Massachusetts. "During the time that Bain held its ownership of the company, Mitt Romney personally sat on the board of directors.."

And during that same period, Damon Corp. was busy submitting fraudulent reimbursement claims to Medicare to the tune of millions of dollars.."

According to the Forbes summary, by the time Damon Corp. pleaded guilty to defrauding the United States Government Bain had conveniently and in the nick of time sold the company to Corning, Inc.

According to Forbes, when Mitt Romney was hammered with the scandal during his campaign to become Governor of Massachusetts, he acknowledged that he did have some awareness of the shady dealings going on at Damon... he had helped uncover the illegal activity at Damon, asking the boards lawyers to investigate. As a result, he said, the board took corrective action before selling the company in 1993 to Corning Inc. However, according to the court records, the Damon scheme continued throughout Bain's ownership, and prosecutors credited Corning, not Romney, with taking corrective action.

According to a Boston Globe report... then Republican gubernatorial candidate Mitt Romney, while insisting that he and fellow members of Damon Corp. uncovered what was later determined to be a criminal scheme to defraud Medicare in 1993, acknowledged that the directors did not turn over their findings to federal authorities...

http://www.deseretnews.com/m/article/680195957

Perhaps the most legally thorny was Bain Capital’s 1989 purchase of Damon Corp., a Needham medical testing firm that later pleaded guilty to defrauding the federal government of $25 million and paid a record $119 million fine.

Romney sat on Damon’s board. During Romney’s tenure, Damon executives submitted bills to the government for millions of unnecessary blood tests. Romney and other board members were never implicated.

More than a decade later, when Romney was in pursuit of the Massachusetts governorship, his Democratic opponent Shannon O’Brien accused him of lax oversight at Damon and failing to report the fraud.

Romney replied that he had helped uncover the illegal activity at Damon, asking the board’s lawyers to investigate. As a result, he said, the board took “corrective action” before selling the company in 1993 to Corning Inc.

But court records suggest that the Damon executives’ scheme continued throughout Bain’s ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation. Bain, meanwhile, tripled its investment.
Romney personally reaped $473,000.

(snip)

In 1997, he balked again, at the acquisition of a Los Angeles video distributor and movie producer that would be renamed Artisan Entertainment and become famous for producing the movie “The Blair Witch Project.”

Romney worried that Bain Capital’s image would suffer from the perception it “had gone Hollywood,” according to Rehnert, the Bain partner who proposed he deal.

Romney had another problem. The studio had an extensive library of R-rated films, which The Church of Jesus Christ of Latter-day Saints discourages its members from watching.

Rehnert calmed Romney’s image concerns by enlisting a Chicago firm to join the deal, sharing the risk and deflecting attention from Bain.

Romney, balancing his duty to make money for his investors with his religious beliefs, let the deal go through, but declined to co-invest his own money, which partners usually did.

“I didn’t want to profit from a studio that made R-rated movies,” Romney said recently.
By the time Bain Capital sold its interest in Artisan in 1999, it had more than tripled its investment.

(snip)

http://www.allbusiness.com/services/motion-pictures/4927634-1.html

Can an upstart born in porn become the premier independent film studio? That’s what the founders of Artisan Entertainment are betting, despite the odds.

Ever since last summer, when a group of investors took LIVE Entertainment private in a $150 million buyout, they have pledged to turn the newly named Artisan into a major Hollywood contender.

(snip)

At Bain Consulting, Curcio was a partner in the Los Angeles office, where he worked on entertainment mergers and acquisitions. In doing so, Curcio and his partners realized the industry’s potential.

“It’s a huge industry with high growth rates that historically do not invest well,” he said.

As a consultant, Curcio met Block, who at the time was with ICM.

“We looked at buying October Films, but then the price went up, and Universal bought them,” said Curcio. Then, Bain stumbled onto LIVE Entertainment, which at the time was trying to recapitalize.

LIVE had a checkered history. The company started as Caballero, a firm whose output included numerous pornographic videos. In the mid-1980s, Caballero sold LIVE Entertainment its children’s titles.

LIVE will be forever associated with the Menendez Brothers, whose father, Jose, headed the company in the late 1980s. When Jose and his wife, Kitty, were gunned down at their Beverly Hills home in 1989, the sons, who were later convicted of the crimes, suggested that a porn-film purveyor was the murderer.

http://investing.businessweek.com/research/stocks/people/person.asp?personId=428561&ticker=ATTC:US&previousCapId=3774702&previousTitle=ATLANTICA%20INC

Mr. Alan D. Gordon is the President at Richland, Gordon & Company. He is also the President, Chief Executive Officer, and Director at Atlantica Inc. Mr. Gordon is also the Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer at Sungard Avantgard (US) Inc. He serves as Chief Financial Officer, Principal Accounting Officer and Senior Vice President of Getpaid LLC. He served as Vice President of Getpaid LLC. He is also Chairman of ALDA Office Properties, Inc. Previously, he served as the Chief Executive Officer and Chairman at AmeriSports Companies, L.L.C. Mr. Gordon has been the Vice Chairman of Artisan Entertainment Inc. since January 2000 and Director since July 1997. He has been a Director of Varsity Spirit Corporation since 1989. Mr. Gordon holds a B.A., Cum Laude, from Dartmouth College in 1977.

http://www.canyonpartners.com/about/people/

Joshua S. Friedman - Founding Partner, Co-Chairman, and Co-CEO

Joshua S. Friedman is Co-Founder, Co-Chairman, and Co-Chief Executive Officer of Canyon Partners, LLC. Mr. Friedman is a graduate of Harvard College (B.A., summa cum laude, Phi Beta Kappa, Physics), Oxford University (M.A., honors, Politics and Economics, Marshall Scholar), Harvard Law School (J.D., magna cum laude), and Harvard Business School (M.B.A., Baker Scholar). Prior to forming Canyon, Mr. Friedman was Director of Capital Markets for High Yield and Private Placements at Drexel Burnham Lambert. Prior to working at Drexel, he worked in the Mergers and Acquisitions Department of Goldman Sachs in New York. Mr. Friedman is also a director and trustee of a number of nonprofit and charitable organizations.
Mitchell R. Julis - Founding Partner, Co-Chairman, and Co-CEO

Mitchell R. Julis is Co-Founder, Co-Chairman, and Co-CEO of Canyon Partners, LLC. Mr. Julis is a graduate of the Woodrow Wilson School at Princeton University (B.A., magna cum laude, Phi Beta Kappa), Harvard Law School (J.D., magna cum laude), and Harvard Business School (M.B.A., honors). Prior to forming Canyon, Mr. Julis directed a group of professionals responsible for a portfolio of distressed and special situation securities at Drexel Burnham Lambert. Prior to working at Drexel, he was a bankruptcy and creditors’ rights attorney at Wachtell, Lipton, Rosen & Katz in New York. Mr. Julis has authored a number of articles published in law journals and other periodicals on the subject of bankruptcy and distressed credit investing.

Notice the Canyon (posted above), Drexel (junk bonds) ties...

http://www.deseretnews.com/m/article/680195957

In one 1988 deal, known as Specialty Retailers Inc., Bain Capital used junk bonds from Drexel Burnham Lambert to finance the purchase of two Texas retailers. Junk bonds have low credit ratings and are therefore considered high risk, but also usually have high yields. A few months earlier, in connection with insider trading scandals, the Securities and Exchange Commission had sued Drexel and the man who built its junk bond business, Michael Milken.

Bain Capital went ahead anyway. Romney had kicked off the road show for potential investors, appearing at Milken’s Beverly Hills headquarters. When Bain Capital was through with the deal, it had converted its $10 million investment into a payout that exceeded $180 million.

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