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Tuesday, August 11, 2009

Alabama Fraud Case Shows The Value of Friends in High Places

Is justice in America blind? Hah!

Anyone who still subscribes to that canard should consider the case of William and Marie King, who operated a health-care consulting company called King & Associates in Shelby County, Alabama.

Mr. and Mrs. King will pay $1.44 million to settle a whistleblower case against them, and they will serve 24- and 18-month prison sentences, respectively. They were charged with submitting fraudulent documents to Medicare for reimbursement.

Now, compare the Kings' punishment to that meted out in two other Alabama health-care fraud cases.

One, which we've written about extensively here at Legal Schnauzer, involves the University of Alabama at Birmingham (UAB). One of that case's whistleblowers, a forensic accountant, estimated the fraud at about $600 million over 10 years. What kind of punishment did UAB receive? It settled the case for about $3.4 million, way less than 1 percent of the alleged total. Did anyone from UAB go to prison? Not even close.

In the Kings' case, they caused Medicare to lose $740,000, and they paid almost $1.44 million, roughly twice the total.

Hmmm, is it possible that UAB received favorable treatment because it is governed by the University of Alabama Board of Trustees, which includes some of the state's most prominent corporate titans? Nah! Could the presence of trustees such as Paul Bryant Jr., son of the late iconic football coach, have resulted in UAB's wrist slap from the Department of Justice? Nah!

Two, consider the case of Performance Group LLC, a company partly owned by Homewood attorney Rob Riley, the son of Governor Bob Riley. A whistleblower complaint alleges that Riley's company has practiced extensive health-care fraud, very similar to what the Kings were found to have done. Two of Riley's partners in the company just happen to be affiliated with UAB.

So what consequences have Riley & Company faced? So far, not a thing. The Justice Department, when Alice Martin led the Northern District of Alabama, declined to intervene, leaving the whistleblower to fend for herself. The case wound up being dismissed without prejudice, meaning it could be brought again. But would new U.S. Attorney Joyce White Vance handle it differently than Alice Martin did?

We wrote about the King case several months back and noted that it was a classic illustration of Alice Martin's hypocrisy on health-care fraud.

Will Joyce Vance, with her deep ties to Birmingham's legal and business community, be any better? That remains an intriguing question. Vance announced the King settlement last Friday. Patrick Maley, FBI special agent in charge, made a statement that captured the importance of such cases:

"This is not a victimless crime--every person who struggles to pay for health care benefits; every older person who worries about Medicare's ability to cover them; every taxpayer who helps fund these programs--these are all victims."

Well stated by Maley. But what about the bigger, more well-connected fish in the health-care fraud pond? Does the Justice Department have the spine to go after them?

This could be an interesting early test for Joyce White Vance. The settlement with UAB allows her office to reopen the investigation, pretty much at any point, for any reason. And certainly she has the authority to intervene in the Rob Riley/Performance Group case.

Joyce Vance has shown that she is willing to flex her prosecutorial muscle against the William and Marie Kings of the world. What about people near the heart of Alabama's power structure? Is she willing to unmask the frauds that they commit?

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