Corruption allegations involving Broward Health, Gov. Scott unsealed in whistleblower suit

By Dan Christensen, 

Gov. Rick Scott, left, and Fort Lauderdale lawyer David Di Pietro

New and politically explosive corruption allegations surrounding Broward Health’s no-bid, 25-year contract with 21st Century Oncology – a company financially tied to Gov. Rick Scott – are spilling out publicly with the unsealing of a federal lawsuit in Fort Lauderdale.

Florida Bulldog exclusively reported last year about 21st Century’s unprecedented 2012 contract to provide radiation oncology services at Broward Health, and how it was inked while the governor was an investor in a private-equity firm that owned 21st Century Oncology.

The 53-page whistleblower lawsuit brought by former Broward Health board chairman David Di Pietro against Fort Myers-based 21st Century and 100 “John Does” claims to provide the inside story behind the deal.

“The existence of the 21st Century contract was recently revealed in the media to the public. What hasn’t been revealed is why and how 21st Century received this extraordinary contract from Broward Health,” the lawsuit says. “The answer is kickbacks.”

Along the way, the complaint alleges, Broward Health’s former chief executive officer, Frank Nask, paid hundreds of thousands of taxpayer dollars in “hush money” to grease the deal. To get Nask on board with 21st Century’s plans, Fort Lauderdale lobbyist William “Billly” Rubin, one of the governor’s closest friends, allegedly offered Nask kickbacks of financial security and the governor’s political protection, while applying political pressure in the governor’s name where necessary.

Lobbyist William “Billy” Rubin

Specifically, “Rubin promised Nask that [the governor’s] appointments to the Broward Health Board would protect Nask’s continuing employment salary and pension as CEO,” the suit says. “Rubin also communicated the message to Nask that if he did not support the contract with 21st Century, then the appointments to the board would not be his allies and his employment would be terminated.”

Nask’s annual salary at the time was about $680,000, plus performance bonuses and benefits. At the time, it had been publicly reported that the federal government was investigating the district’s contracts with 27 of its physicians – a probe that led to a $69.5 million settlement in 2015 – and Nask “needed allies … Nask agreed to Rubin’s demands,” the complaint says.

21st Century executives ‘fully aware’

“Executives at 21st Century were fully aware and complicit in this kickback scheme,” the complaint says.

Neither Rubin nor Nask could be reached for comment. A spokeswoman for 21st Century said the company does not comment on pending litigation.

Gov. Scott’s Office released this statement: “(Neither) the Governor’s office nor the Governor are named as a party in this lawsuit, which was filed against a private company four days after Mr. Di Pietro resigned from the board in April 2016.  Governor Scott has acted to make sure that the North Broward Hospital District is accountable to the taxpayers they serve and will continue to do just that.”

Di Pietro declined to comment. His lawsuit seeks to recover tens of millions of dollars it says were wrongfully billed to Medicare, Medicaid and other federal health-care programs. If successful, whistleblowers like Di Pietro can collect huge rewards.

21st Century operates approximately 145 cancer treatment centers in 17 states. According to the lawsuit, 21st Century “orchestrated” the scheme “to control referrals of cancer patients for radiation oncology services,” targeting Broward Health because it is a major regional treatment center for cancer patients. “Thousands of patients insured by Medicare and other federal healthcare programs” provide “a lucrative revenue stream for 21st Century.”

The entrance to 21 Century Oncology’s headquarters in Fort Myers

21st Century has been a reliable contributor to Gov. Scott’s election campaigns. For example, state records show that between May 2012 and January 2014 – the year Scott faced a tough re-election challenge from former Gov. Charlie Crist – 21st Century gave more than $360,000 to Scott’s Let’s Get to work political committee. After Scott was re-elected, the company gave an additional $30,000.

Broward Health, whose legal name is the North Broward Hospital District, has 8,000 employees and operates more than 30 healthcare facilities including Broward Health Medical Center, Broward Health North, Broward Health Imperial Point and Broward Health Coral Springs. It is an independent special district run by an all-Republican board of commissioners appointed by the governor. The district is obliged to treat indigent patients and levies ad valorem taxes of about $170 million a year on property owners in North Broward.

Gov. Scott allegedly involved himself directly in the matter about March 2012 with a phone call to Di Pietro, whom he’d appointed to Broward Health’s board on Rubin’s recommendation in September 2011. Scott’s call came around the time “a colleague of Di Pietro’s” called then-Lt. Gov. Jennifer Carroll “to advise her that Rubin was using undue influence and political patronage to appoint commissioners to the Broward Health Board in order to get his clients’ contracts approved.”

Broward Health CEO Frank Nask Photo: Karla Bowsher

Scott phoned on a day he was interviewing two potential board members. “Di Pietro told Governor Scott that Nask and Rubin were hand-picking ‘candidates’… and that the two interviews he had that day were not independent candidates; rather they would be doing the bidding of Nask and Rubin. Governor Scott acted upset but he ignored Di Pietro’s concerns. Governor Scott continued to follow Rubin’s lead in appointments to the board,” the suit says.

Days later over lunch, March 27, 2012, Rubin “expressed frustration” at Di Pietro, telling the governor about “my appointments” to Broward Health’s board, the complaint says.

Pressure on El Sanadi

Among those who felt pressure from Rubin was Dr. Nabil El Sanadi, who succeeded Nask in December 2014. El Sanadi commited suicide on Jan. 23, 2016.

Shortly after El Sanadi was hired, Rubin set a Jan. 19, 2015 meeting with El Sanadi, lobbyist Jim Eaton, 21st Century boss Dr. Daniel Dosoretz and Di Pietro. The complaint says that at the gathering, Dosoretz is said to have “bragged” about his “close friendship with Governor Scott” and urged El Sanadi “to give more business to 21st Century.” Specifically, Dosoretz allegedly asked El Sanadi to arrange for Broward Health to circumvent eligibility rules of a government drug discount program for hospitals and buy the chemotherapy drugs used by his company to “save 21st Century monies on those drugs.”

Dr. Nabil El Sanadi, Broward Health’s late chief executive

Di Pietro, who operates his own Fort Lauderdale law firm, contends that Rubin continued to meet with El Sanadi “on a weekly basis” until El Sanadi’s abrupt death.

The complaint blames the corrupt 21st Century deal for leading to losses of more than $30 million for taxpayer-supported Broward Health between September 2011 and its filing in April 2016.  “Over the course of the potential 25-year term of the contract, Broward Health is on track to lose over $125 million.”  Potential billings by 21st Century during the 25-year term “will exceed $800 million,” the suit says.

Di Pietro and his attorneys filed the case under seal in April 2016 under the False Claims Act and Qui Tam statute, part of a Latin phrase that means “he who sues in this matter for the king as well as for himself.” The case was ordered unsealed Friday by Fort Lauderdale U.S. District Judge Kathleen M. Williams after the government declined to intervene. No explanation was given for that decision, though it could involve 21st Century’s July filing in bankruptcy court that seeks to reorganize and shed massive debt.

Prosecutors, however, reserved the right to intervene later “for good cause” or seek dismissal. The decision means the case will proceed with Di Pietro’s team of attorneys prosecuting. Lead counsel is Atlanta’s Bryan Vroon, who in 2015 represented whistleblower Dr. Michael Reilly while extracting $69.5 million from Broward Health to settle allegations of health-care fraud.

The death of Dr. El Sanadi marked the beginning of the end of Di Pietro’s chairmanship.

Six days after El Sanadi’s death, the governor’s chief inspector general, Melinda Miguel, informed Di Pietro that with Scott’s support she would be conducting a review of all of Broward Health’s contracts dating from July 1, 2012.

Timing of state probe of Broward Health ‘no coincidence’

“The cutoff date of contracts to be reviewed by the governor’s chief inspector general is no coincidence. Broward Health originally entered the contract with 21st Century in September 2011,” the complaint says. “There would be a public appearance of an investigation by the governor’s office but the 21st Century contract would escape review.”

Melinda Miguel

On March 18, 2016 Miguel sent a letter to Scott accusing Di Pietro and board member Darryl Wright of interfering with her investigation by hiring outside legal counsel for the board. “Within minutes” Scott suspended Di Pietro and Wright for “acts of malfeasance,” the complaint says.

Days later, Di Pietro asked a Broward judge to reinstate him to the board. On April 11, following a hearing, Circuit Judge Carol Lisa Phillips determined that Miguel’s letter and Scott’s executive order suspending Di Pietro were “devoid of any specific acts of malfeasance” and granted Di Pietro’s petition for reinstatement. Three days later, Di Pietro resigned from the board.

According to the lawsuit, the contract was the result of political intrigue initiated by 21st Century and led by lobbyist Rubin. Specifically, it says Rubin was hired in the summer of 2011 to approach Nask about obtaining a lengthy, exclusive contract.

Di Pietro voted to approve the 21st Century deal in January 2012, apparently not knowing of the governor’s indirect ownership interest in the company or Nask’s hush money payments to HealX Oncology. Months later, after learning of the payout from Broward Health’s then-internal auditor, Maria Panyi, Di Pietro began asking questions.

That summer and fall, Rubin told Di Pietro “not to discuss or investigate the HealX payouts because the issue would ‘hurt’ Nask, 21st Century Oncology and Governor Scott.” Rubin allegedly kept up the pressure on Di Pietro, instructing him to be a “team player” and to support the governor.

To obtain the contract for 21st Century, Nask first had to terminate the existing contract with HealX Oncology. To do so, he arranged for the payment of $830,000 in “hush money” intended to “buy silence” of HealX and Dr. Anurag Agarwal, the complaint says.

The complaint says Broward Health cut three checks to HealX without the board’s approval. Two checks were for $250,000, the limit on payments Nask had authority to authorize alone. The third check for $330,000 was justified as “director fees” for three years, and the district paid “without any supporting documentation.”

Nask ‘obscured’ major losses

The lawsuit says Nask didn’t tell the board about the kickbacks that induced the deal or his hush money payments, while leading board members to believe that HealX had quit. Likewise, Nask “obscured” financial information about the deal from the board, including “major losses” from the deal and the fact that the contract let 21st Century “bill, collect and keep all global revenues associated with outpatient radiation oncology services” – a “major change in the billing arrangement” for the district’s oncology services.

Nask also did not obtain a fair market valuation regarding “the economics of the deal with 21st Century.” Di Pietro didn’t learn the truth until years later, the complaint says.

In the summer of 2014, Nask “saw an opportunity to escape the kickback control of 21st Century” by supporting Charlie Crist over Scott in the gubernatorial race, the complaint says. Nask wanted to leak information then about the ongoing federal probe or to settle prior to the election to hurt Scott. But Rubin learned of Nask’s plan and told Di Pietro to “squash Nask like a bug” and “have him fired.”

Nask was gone by the end of the year, and Di Pietro recommended Dr. El Sanadi as his replacement. After apparently being reassured that El Sanadi would back 21st Century, Rubin pushed the governor to appoint to the board Maureen Canada and Sheela Van Hoose, two El Sanadi supporters. After El Sanadi’s appointment, “Rubin communicated to El Sanadi that he was indebted to Rubin,” the complaint says.

Rubin apparently forgave Nask for his political transgression. The complaint says Rubin lobbied Di Pietro to give Nask a ‘generous’ severance package. “Broward Health paid Nask a full-year of compensation after his retirement,” the complaint says.

In late 2014 and early 2015, Di Pietro “discussed with El Sanadi the unfortunate reality of political control at Broward Health” and that he would “face the challenge of working closely with Rubin” and his addressing his demands to protect and favor 21st Century.

“The message to El Sanadi was clear,” according to the lawsuit.

In addition to counts alleging false claims, the lawsuit also accuses 21st Century of making false statements to obtain payments, conspiring to submit false claims, causing claims to be falsely certified, knowingly retaining overpayments and making false records to avoid having to make refunds.

The complaint’s bottom line: “Without any bids or independent fair market valuations, a private company gained control of a major public hospital system’s referral stream of cancer patients, the entire radiation oncology infrastructure of general space, vault space and radiation equipment and ‘global revenues’ from treating such patients.”

Huge debt-relief fraud in Pompano Beach bilks $70 million from thousands of victims

By Joseph A. Mann Jr., 

Jeremy Lee Marcus, accused of bilking thousands of consumers in a $70 million fraud, as pictured in a February 2016 press release by his Helping America Group.

In a debt-relief scheme that affected about 15,000 people across the country, three telemarketing executives headquartered in Pompano Beach and using a branch in Panama bilked victims out of an estimated $70 million, according to the Florida Attorney General’s Office, the Federal Trade Commission (FTC) and the attorney working to retrieve assets in the complex case.

A civil complaint filed recently in federal court in Fort Lauderdale by the Attorney General’s office and the FTC alleged that telemarketers at several of the companies managed from the Pompano Beach office building offered to consolidate personal debts for customers, pay off, settle or obtain dismissals for these obligations and improve their credit ratings.

Customers were allegedly convinced to pay from a few hundred to more than a thousand dollars per month to one of the so-called debt-relief companies that were part of the scheme, according to the complaint.

In most cases, no payments were made to reduce these debts. Moreover, customers ended up becoming victims: They incurred even greater indebtedness thanks to fake loans obtained from the companies, loans that were supposedly being used to pay their pre-existing debt. Some customers were sued by their old creditors or were forced into bankruptcy.

Running since 2013 with a headcount reaching around 150 managers, telemarketers, administrative staff and others, this South Florida-based operation was shut down in May by a federal judge who issued a preliminary injunction and asset freeze order affecting the individuals and companies involved.

The court also appointed a Receiver, Jonathan E. Perlman, a shareholder at the Miami-based law firm Genovese Joblove & Battista and an attorney with extensive experience in receivership roles. His formidable task is to sift through the maze of companies, accounts and financial operations to recover funds for defrauded customers.

Defendants – human and corporate

On May 8, the FTC and the State of Florida filed a complaint seeking an injunction with the U.S. District Court of the Southern District of Florida. (Case No. 17-cv-60907-Altonaga) The defendants in the case were Jeremy Lee Marcus, who was described by the Receiver as the CEO and an owner of the group of companies in the debt relief operation; Craig Davis Smith, the COO and also an owner; and Yisbet Segrea, an executive who ran the office in Panama, plus dozens of corporate defendants controlled by the individual defendants. These included 321Loans Inc., Financial Freedom National Inc., Helping America Group, Marine Career Institute Sea Frontiers Inc., Instahelp America Inc. and Breeze Financial Solutions.

Receiver Perlman believes there could be more than 80 companies involved as corporate and related defendants, but that 23 are currently investigation targets since they offer the best potential for recovery, he told the Florida Bulldog.

The Pompano Beach office building described by authorities as the headquarters for the multi-million dollar fraud. Photo: Joseph A. Mann Jr.

The companies operated as a “common enterprise” through an interrelated network with commingled funds, all allegedly controlled by the three defendants, the complaint says.

According to the FTC and Florida Attorney General’s complaint, these are the basics: The defendants made their money by promising customers large debt consolidation loans at attractive rates, or by telling customers they were taking over the task of servicing consumers’ pre-existing debt relief accounts. In both cases, customers paid the defendants millions of dollars under the false premise that these alleged debt-relief companies would pay off, settle or obtain dismissals of consumers’ debts and improve their credit ratings.

In fact, there were no actual loans. Defendants kept most of the loan payments and paid very little or nothing toward reducing their customers’ debts. Eventually, the victims found out that no one was paying their original debts, their accounts were in default and their credit scores had suffered. In some cases, original creditors filed lawsuits against the consumers and some were forced into bankruptcy.

One scam victim, Derek S. from Vero Beach, told about his experience with the debt-relief group in an April affidavit.

Two years ago, he said, he did a Google search for a debt consolidation firm and found Helping America Group (HAG), one of the corporate defendants. “At that time, I was current on my debts and was making the minimum payments monthly,” he said in the affidavit. “I was looking for a company to consolidate my debt and to make one lower monthly payment.”

A fake loan

After calling HAG and learning about their services, Derek was told that another defendant firm, 321Loans, would be making the loan to him and would pay off his creditors. The loan, a fake, was for a total of $10,835 plus interest at 9.99 percent. He was also told to stop paying his creditors, not to talk to them and that another group firm, Breeze Financial, would help improve his credit score.

He started making monthly payments to Paralegal Support, still another firm in the group, and subsequently called several times to ask for a progress report. He was told “it would take time to negotiate the debt.”

A few months later, he called two of his creditors, who said they never heard of HAG or 321. He tried to cancel his agreement but was not allowed to do so until after he had filed complaints with the Florida Attorney General and the Better Business Bureau. Last December, 321Financial – another element in the scheme — issued a cancellation letter and a refund of $200.13.

“I paid thousands of dollars to HAG/321 and they did not do anything they promised,” he said. “My debt effectively had been doubled.”

The joint state-federal complaint filed last May states that the defendants were in violation of the Federal Trade Commission Act, the FTC’s Telemarketing Act (covering consumer fraud and abuse) and the FTC’s Telemarketing Sales Rule (TSR). The Florida Attorney General brought the action under the state’s Deceptive and Unfair Trade Practices Act and the Telemarketing Act.

The defendants, who are free, have denied any wrongdoing. While the current case against the defendant group is a civil action, a criminal suit could be filed in the future, according to an attorney familiar with fraud actions.

The FTC and the Florida Attorney General’s office declined to comment on the progress of the case, since it is still open.

Finding customers and making the pitch

The scheme attracted potential victims by using Internet advertising and websites, direct mail and unsolicited phone calls. The defendants also bought presumably legitimate debt-relief firms and acquired their clients’ names as well as personal and financial information. Here’s how it allegedly worked:

  • Companies in the group used ads on their websites or sent personal letters to the potential client’s home address. Sometimes falsely identifying themselves as nonprofits, they offered low-interest loans so a consumer could combine all debts and make one payment at a more favorable interest rate. For example, a typical letter sent by one of the group companies, 321Loans, offered up to $35,000 at 4 to 7 percent interest to cover debts from credit cards, private student loans, accounts in collection, medical bills, etc. The letter said the credit was pre-approved.
  • The group supplied its Pompano Beach telemarketing staff with training manuals that taught “The Art of the Sale.” Some nuggets from the manuals: “The more time you spend qualifying (researching) the prospect, the less time you will waste pitching unqualified people for hours only to find they HAVE NO $$$,” and “so remember your ABC’s – Always Be Closing!”
  • When people called a “customer approval center” (or when sales staff made unsolicited phone calls), prospects were told that a loan would be made to cover the full amount of their debt, plus interest. The loan would be used to pay off all indebtedness, and the lucky consumer would only have to make monthly payments that were much less than what they were paying. The companies told consumers they could provide low-interest loans because their nonprofit status allowed them to borrow at favorable rates.
  • While potential clients were still on the phone, telemarketers emailed them a link to a document designed to look like a loan agreement. Consumers clicked on highlighted areas to initial and sign the agreement, which committed them to pay back the loan and fees, wherever applicable. The 50 to 75 page document in fact contradicted the sales pitch made by the telemarketers.
  • Consumers agreed to have their bank accounts debited immediately for their first loan “repayment” or for a processing fee. Then monthly “repayments” were automatically taken from their accounts, ranging from $200 to over $1,000.  Few or no payments were made to creditors, and a consumer with, say, $8,000 in old debts, would owe the pre-existing amount, plus the $8,000 “loan” taken out from a defendant company.
  • When consumers were told by original creditors that none of their bills had been paid, dismissed or settled, the defendant companies strung them along with false explanations, such as more time was needed to validate the consumers’ debts or to confirm payoff amounts. Clients who called to complain were given excuses and treated badly. Sometimes, the only contact number available was disconnected.
  • In another aspect of this scam, the group, using mostly outside legal counsel, worked with some clients who were sued by creditors before the operation was shut down in May, according to the Receiver’s Amended First Interim Report filed in June. In these cases, the group’s attorneys ironically won large claims for clients related to supposed violations of the Telephone Consumer Protection Act or the Florida Consumer Collection Practices Act by credit card companies. But clients only received a small portion of the damages. For example, one client received $1,000 from a law firm working with the group after a credit card company paid a total of $80,000. Many cases followed a similar pattern, and some customers apparently were not aware of the amount of the total settlement.

Recovering assets for victims

“I’m essentially the CEO of this defunct enterprise,” Perlman, the court-appointed Receiver, told the Florida Bulldog. “My main goal is to conserve and protect all the assets of the receivership.”

Assets – cash and a wide range of real estate – include a 50,000 square foot headquarters building at 1410 SW 3rd St., Pompano Beach. Other tenants in the building who were unrelated to the defendant group continue to provide revenue to the receivership.

So far, the receivership has served over 30 banks with orders for records, and continues to look for other financial institutions that might be a source of assets.

Perlman told a Florida Bulldog reporter that the information his office has gathered so far indicated that “the amount taken from customers has been $70 million, and continues to rise.” It will increase as more bank records come in. The estimate in May was $50 million.

“We come in unannounced and serve papers to all the institutions we know about,” he said. “We try to obtain money and other assets voluntarily. If not, you take it to the judge.”

While the receivership is identifying and seizing assets related to the case, reimbursement to victims will come after the asset search is completed and the current civil proceeding resolved.
Perlman’s team has set up a website,, to inform victims and the public about developments in the receivership process. Currently, he is the Temporary Receiver, but has petitioned the court to be named Permanent Receiver.

Overlooked class action against Democratic Party and Wasserman Schultz turns nasty

By Francisco Alvarado, 

Hillary Clinton, Debbie Wasserman Schultz and Bernie Sanders

An ongoing legal battle playing out in Fort Lauderdale federal court over the Democratic National Committee’s presidential nominating process has devolved into accusations of harassment and intimidation conducted by unknown political operatives.

Last month, an attorney representing 150 Democratic voters in a little-noticed class action lawsuit against the DNC and its former chairwoman, U.S. Rep. Debbie Wasserman Schultz, sought court-ordered security guards for himself, his clients, and his co-counsels and their employees following a string of bizarre incidents in June, including strange phone calls and emails by individuals disguising their voices and a mysterious break-in at the home of one of the plaintiffs.

On June 15, Senior U.S. District Judge William Zloch denied Fort Lauderdale lawyer Cullin O’Brien’s motion after determining that his request would overburden the U.S. Marshals Service because the plaintiffs reside in 45 states and Washington, D.C. The judge also noted that O’Brien had not provided any evidence directly linking the incidents to the DNC and Weston-based Wasserman Schultz.

“The undertaking would in all likelihood require the entire U.S. Marshals Service to direct all of its efforts and attention to this specific case,” Zloch wrote in his order.  “The Court notes that plaintiffs’ motion contains absolutely no factual nexus between Defendants and the conduct set forth in the motion.”

O’Brien did not respond to two phone messages and an email request for comment. Mark Caramanica, an attorney for Wasserman Schultz, referred questions to DNC lawyers Bruce Spiva and Marc Elias, who also did not return two phone messages and emails requesting comment.

DNC attorneys Bruce Spiva, left, and Marc Elias.

Elizabeth Beck, an attorney for the plaintiffs, told Florida Bulldog that it was not her legal team’s intent to show that the DNC and Wasserman Schultz were involved in the incidents. “We are not saying the DNC or the congresswoman ordered the harassment against us, the plaintiffs and our staff,” Beck said. “We don’t know who is doing it, but it did happen.”

The stakes are high for the DNC and Wasserman Schultz. The complaint accuses both of fraud, negligent misrepresentation, unjust enrichment, breach of fiduciary duty and negligence by rigging Democratic primaries to favor former Secretary of State Hillary Rodham Clinton over U.S. Sen. Bernie Sanders. More than half of the plaintiffs are Sanders supporters who donated money to his campaign. The lawsuit claims the 150 Democrats are entitled to punitive damages in addition to refunds for their political donations.

Despite the explosive accusations in the lawsuit and the subsequent motion seeking court-ordered protection, there has been no coverage of the case in mainstream media outlets, including South Florida’s newspapers, since it was filed in June 2016.

‘Funny Business’

Beck and her husband, Jared Beck, are Miami-based personal injury lawyers who decided to support Sanders in early 2016. “I was phone banking and also hosted phone banks to teach other people,” Elizabeth Beck said. “I joined a lot of Facebook groups where I was sharing information and political memes. That’s when I started hearing about all this funny business happening during the primaries in various states.”

Attorneys Elizabeth and Jared Beck

She said her suspicions that the DNC was in the tank for Hillary Clinton were confirmed when Russian hackers publicly released internal documents from the committee on the Internet. “The lawsuit was filed based on that information,” Beck said. “Everyone, including the people who hired us, reached the same conclusion that the process was rigged.”

Beck also launched a Facebook page that has grown to more than 57,000 followers and started the political action committee JamPAC. She uses the JamPAC’s website to post updates and documents related to the lawsuit.

According to the 39-page complaint, the DNC and Wasserman Schultz violated DNC’s charter and bylaws that say the party chair “shall exercise impartiality and evenhandedness” and “shall be responsible for ensuring that the officers and staff of the DNC maintain impartiality and evenhandedness.” Further, that while Wasserman repeatedly made public statements between September 2015 and May 2016 that she was committed to running a neutral primary, the congresswoman and the DNC was on team Clinton from the beginning of the 2016 presidential election cycle, the lawsuit claims.

To support their claims, the plaintiffs cited internal DNC documents obtained by Russian hackers and published on the Internet by purported hacker Guccifer 2.0. For example, on May 26, 2015 the DNC issued a memo outlining the party’s goals in providing a contrast between the “GOP field and HRC [Hillary Rodham Clinton].” The memo also added the DNC would use “specific hits to muddy the waters around ethics, transparency and campaign finance attacks on HRC.”

The DNC has confirmed that the emails are legitimate.

During an April 25 motion hearing, DNC lawyer Spiva argued the plaintiffs don’t have standing to bring the lawsuit because the courts don’t have jurisdiction over how political parties decide to pick their candidates. “The Supreme Court and other courts have affirmed the party’s right to make that determination,” Spiva said. “Those are internal issues that the party gets to decide basically without interference from the courts.”

DNC ‘not obligated’ to follow own rules

The DNC is not obligated to follow its charter and its bylaws, Spiva added. “We could have voluntarily decided that we’re gonna go into back rooms like they used to do and smoke cigars and pick the candidate that way,” he said. “That’s not the way it was done. But they could have. And that would also have been their right.”

Beck told Florida Bulldog she was taken aback by Spiva’s legal argument since Wasserman Schultz had always denied the DNC was playing favorites. “It’s a pretty outrageous position to take,” she said. “It was very different from what the congresswoman had been saying on national TV during the primaries.”

A little over a month later, things got even more strange. On June 1, Beck sent an email to DNC attorneys to inform them that her secretary had received a phone call from an unknown individual seeking information about the case. “The caller refused to identify himself/herself,” Beck wrote. “My secretary stated that it sounded like the caller was using a voice changer because the voice sounded robotic and genderless.”

Fort Lauderdale Attorney Cullin O’Brien

Beck also noted that the phone number that showed up on the caller ID was the same one for Wasserman Schultz’s Aventura district office. According to a June 1 reply filed in court by the congresswoman’s lawyers, Wasserman Schultz had no knowledge of the call being made and did not authorize it.

“Further, it is highly unlikely that the call did in fact originate with that office, as no one is currently working in the office associated with the subject number — or has anyone been working there for several months — due to ongoing repairs,” the reply states. “Given that the matter involves congressional phone lines, the incident has been reported to Capitol Police.”

The following day, Fort Lauderdale attorney O’Brien received three phone calls from an unknown number from a person who identified himself only as “Chris” inquiring about the lawsuit, according to the motion requesting protection. During the second phone call, “Chris” allegedly said, “This is bigger than you and your family and your law partners” and made a reference to news about the mysterious death of Assistant U.S. Attorney Beranton Whisenant in Fort Lauderdale. O’Brien also submitted under seal 11 emails allegedly sent by “Chris.”

Whisenant’s body was spotted floating just off Hollywood beach shortly before dawn on May 24. The cause of death has not been released, but the Miami Herald has reported that Hollywood police have said Whisenant suffered some trauma to his head.

On June 3, plaintiff Angela Monson from Dassel, Minn., said she woke up around 5:45 a.m. to use her laptop computer only to find it in a different spot from where she had last left it, which she thought was odd, according to an affidavit she filed as part of the motion for protection. “When I plugged in my laptop, it made a snapping noise and did not turn on,” Monson said. “When I turned it over, the bottom cover of the laptop fell off.  I then noticed that the bottom cover, which is attached to the laptop with 10 screws, had all the screws missing.”

After noticing that two patio doors she had locked the night before were unlocked, Monson called local police to file a report about a possible break-in, her affidavit states. The same day, O’Brien claims he received a call from the far-right militia group Oath Keepers offering him and his clients protection.

Strange case: BSO looking to buy rights to embarrassing lawsuit to quash it

By Dan Christensen, 

Broward Sheriff Scott Israel

The Broward Sheriff’s Office is making a bizarre bid to squelch a disturbing lawsuit brought against it by a former employee – it wants to buy all rights to the lawsuit from a bankruptcy court trustee.

The lawsuit, filed in 2015 by former BSO Human Resources Information Manager Jennifer Bakowski, includes a host of allegations against BSO including false imprisonment, defamation and malicious prosecution.

In federal bankruptcy court Thursday, a lawyer for BSO asked the court to deny the trustee’s plan to allow Bakowski to buy back her own lawsuit at a cost of about $86,000. Instead, he said, the sheriff should be allowed to buy it for $161,000 in public dollars.

“If we can acquire the case, we can dismiss the case,” said Fort Lauderdale attorney Thomas M. Messana.

“It was his client’s misdeeds that caused the bankruptcy,” countered the trustee’s lawyer, Jason S. Rigoli of Boca Raton. Rigoli argued BSO had no standing to object to the trustee’s proposal to sell the lawsuit back to Bakowski, noting her offer was sufficient to pay off all creditors and attorneys’ fees in full with interest.

“They’re trying to cover up and cap the amount of their liability,” Miami attorney Christian Olson told U.S. Bankruptcy Court Judge Raymond B. Ray on behalf of Bakowski.

Ray deferred a ruling, and asked both sides to submit final written arguments by March 31. It was unclear whether another hearing on the matter would be held.

Bankruptcy trustee Marc P. Barmat obtained opinions from independent trial attorneys that valued the case as being worth much as $1.2 million, according to attorneys for Bakowski.

Strange case

The strange case arose out of a reopened bankruptcy court case that Bakowski and her husband, Robert, originally filed in 2013 in the wake of her December 2012 firing by Sheriff Scott Israel.

Bakowski was a 13-year employee with an otherwise spotless record when two sheriffs – Al Lamberti and Israel, his successor – publicly accused her of embezzling approximately $1 million. A year later, however, BSO detectives and the State Attorney’s Office cleared Bakowski of wrongdoing after determining, among other things, that in fact no money was missing, court records say.

Jennifer Bakowski

While under investigation, Bakowski and her husband filed for bankruptcy in Fort Lauderdale as their debts piled up following the loss of what was said in court to be a “six-figure salary.” The court discharged the couple’s debts in August 2013.

More than a year later, on Jan. 31, 2015, Bakowski sued Sheriff Israel and several underlings in Broward Circuit Court alleging a variety of misconduct by BSO arising from her dismissal.

In June 2016, an attorney for BSO contacted the trustee to tell him about the lawsuit, alleging it should have been included in the bankruptcy estate because the claims arose well before the underlying damages case was filed in Broward Circuit Court. The trustee soon moved to reopen the Bakowskis’ bankruptcy case and, as required by law, gave notice to the couple’s debtors to refile any claims.

The trustee and the Bakowskis later agreed to avoid the costs of further litigating whether all the alleged causes of action in the state complaint against BSO are property of the estate. They agreed to give all rights and title to the suit to the trustee.

The trustee then proposed to sell to Jennifer Bakowski those bankruptcy rights. After Thursday’s hearing, Bakowski said she would fund the rights purchase with money she recently inherited from her late mother.

The sale would have gone through, but BSO objected. Specifically, BSO’s lawyers complained in court papers, “The sale ‘process’ was opaque, was not conducted at arms length, and favors the debtor over the estate and its creditors.”

“We’re not a disgruntled bidder,” BSO lawyer Messana told Judge Ray. “We’re saying the process was unfair.”

FBI censored documents to protect privacy of accused 9/11 mastermind, accomplice

By Dan Christensen, 

Khalid Sheikh Mohammed after his capture in Rawalpindi, Pakistan on March 1, 2003

Even as the FBI recently has made public more 9/11 records to satisfy the requirements of the Freedom of Information Act in advance of a possible trial, it continues to withhold untold documents that promise to cast new light on that terrible day in 2001.

Likewise, about 1,000 pages from the secretive 9/11 Review Commission that were declassified are shot through with blanked-out words, sentences, paragraphs, even entire pages – FBI deletions that undermine the act’s purpose as “a means for citizens to know ‘what their government is up to.’”

The FBI made public those pages in response to a Freedom of Information lawsuit filed in June by the corporate parent of Florida Bulldog after the bureau did not properly respond to lawful record requests. The Review Commission, also known as the Meese Commission after its best-known member former Attorney General Edwin Meese, was authorized by Congress to conduct an “external” review of the FBI’s post-9/11 performance and to examine new evidence. Its members were chosen and paid by the FBI. It issued its final report in March 2015.

National security and the need to protect informants were among the reasons the FBI cited to explain why certain information was kept hidden. In other cases, the reasons the FBI has asserted for redactions appeared arbitrary, even bizarre.

Take for example the 53-page FBI PowerPoint presentation titled “Overview of the 9:11 Investigation” that was shown to the commission during a briefing in April 2014. The PowerPoint included the “non-immigrant visa application” filled out by accused 9/11 architect Khalid Sheikh Mohammed, who for the last 10 years has been held at the Guantanamo Bay detention camp.

The FBI withheld Mohammed’s entire visa application. Its reason: disclosure “could reasonably be expected to constitute an unwarranted invasion of personal privacy.”

The FBI further asserted the privacy rights of Mohammed and fellow “high-value” Guantanamo detainee Mustafa al-Hawsawi in its decision to withhold PowerPoint slides about their credit card information. Specifically withheld: al-Hawsawi’s “credit card statement and supplemental card activity” and Mohammed’s “supplemental Visa card application” to the United Kingdom’s Standard Chartered Bank.

Al-Hawsawi, a Saudi charged with war crimes, is an alleged senior al Qaeda member and organizer and financier of 9/11.

Nine other pages from the 9/11 PowerPoint were deleted. Also redacted was all information about these titles: “Funding of the 9/11 Attacks” and “Additional Funding Early to Mid-2001”; “Early to Mid-2000: Pilots/Intended Pilots Arrive U.S.”; “Early to Mid-2001: Non-Pilots Arrive U.S.”; “July-August 2001: Knife Purchases; August 2001: Reserving 9/11 Tickets.”

The FBI withheld each of those records citing exemption b7E to the Freedom of Information Act, which shields from disclosure “techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law.”

In addition, four pages in the PowerPoint titled “Ongoing Investigation” were blanked out. A variety of reasons cited included privacy, inter-agency or intra-agency memorandums, and techniques and procedures – but not national security.

On the other hand, the bureau last month did release one tidbit that’s sure to fire up those who believe the destruction of the Twin Towers was an “inside job” or that the Pentagon was hit by a missile, not an American Airlines Boeing 757.

A partially declassified Memorandum for the Record (MFR) regarding an April 23, 2014 FBI briefing about its 9/11 investigation mentions a startling request for information to the FBI that day:

“The commissioners requested a list of evidence that shows it was actually a plane that crashed into the Pentagon,” the memo says.

Why did the Meese Commission make such a curious request? Did the FBI provide such a list?

The MFR’s declassified pages don’t answer those questions. Still, more than two pages of the six-page document were kept secret citing FOIA exemptions that prevent the disclosure of certain inter-agency or intra-agency memos and sensitive law enforcement techniques.

Lawsuit: Broward Sheriff Scott Israel has tolerated and covered-up the illegal use of force

By Dan Christensen, 

The late Steven Jerold Thompson, left, and suspended BSO Deputy Gerald Wengert

The late Steven Jerold Thompson, left, and suspended BSO Deputy Gerald Wengert

The family of a 26-year-old black man shot and killed by a Broward Sheriff’s deputy has sued the deputy and Sheriff Scott Israel, alleging wrongful death, serious and repeated failures of police oversight, and cover-up.

Steven Jerold Thompson died shortly after midnight on June 6, 2014 – less than two hours after being shot nine times at a Lauderhill apartment building by Deputy Gerald Wengert, a one-time police reality TV star with a history of violent encounters.

“There existed…a de facto policy by defendant Israel of covering up police misconduct by failing to properly investigate alleged misconduct, and/or by conducting investigations that were intentionally deficient,” says the 32-page complaint filed by veteran Fort Lauderdale civil rights lawyer Barbara Heyer.

Further, the complaint says, BSO covered up misconduct “by listing the problem investigations as ‘ongoing’ long after any investigation had ceased, thereby attempting to insulate” BSO from public scrutiny. Florida’s public records law allows police to keep secret information about cases under active investigation.

“This de facto policy enabled some deputy sheriffs to falsify reports, give false testimony, and create and/or destroy evidence, including but not limited to throw down firearms, in order to justify their misconduct,’’ the complaint says.

The lawsuit, pending in U.S. District Court in Miami, comes amid a grueling national debate about killings involving the police and racial unrest. It includes the allegation that Broward’s elected sheriff has “tolerated and caused a pattern and practice of unjustified, unreasonable and illegal use of force” at BSO and that offending deputies were not prosecuted, disciplined or retrained. Some incidents were “covered up with official claims that their acts were justified and proper,” the lawsuit says.

The sheriff’s attorney, Daniel Losey, filed court papers last week that denied any wrongdoing, asserted that BSO’s use of force was necessary and that Thompson’s own conduct was the sole cause of his injuries.

A sheriff’s spokeswoman said BSO makes “it a practice not to comment on pending litigation.”

Wengert has been on suspension with pay since June 12, 2015 regarding an active investigation into the beating of a suspect. BSO declined to facilitate an interview, and Wengert could not be reached for comment.

An awkward time for Israel

The complaint arrives at an awkward time for Sheriff Israel. He is seeking re-election to a second term and his campaign has portrayed him as a sensitive, reform-minded sheriff working “to bring transparency and accountability” to BSO.

Wengert, who turns 38 on July 26, was hired in 2004 when BSO merged with the Cooper City Police Department. He did not, however, undergo a background investigation, psychological evaluation, drug testing or a polygraph examination as required by BSO policy, the lawsuit says.

Gerald Wengert in a publicity photo for "Unleashed: K-9 Broward County"

Gerald Wengert in a publicity photo for “Unleashed: K-9 Broward County”

From the day he was hired until the day he shot Thompson dead, Deputy Wengert had “73 documented use of force incidents, and ten documented complaints, including three shootings,” the lawsuit says, while noting Wengert was never disciplined for any of those incidents. (Wengert, who starred in TLC/ Discovery Channel’s “Unleashed: K-9 Broward County” in 2011, was criminally charged in 2012 with battery, official misconduct and falsifying records involving the beating of Mark Visconti, but was found not guilty in April 2013.)

Local news accounts at the time, relying on information supplied by BSO, described Thompson as a convicted felon and a robbery suspect when he was killed in a “gunfight” with police.

The complaint paints a much different picture of what happened.

The sequence of events that led to Thompson’s death began after K-9 deputies Wengert, Todd Yoder and Emanuel Koutsofios were dispatched to a suspected armed robbery at a Lauderhill condominium. Two cell phones had been stolen, and tracking located one of them four miles away at the Cypress Grove apartments in the 4300 block of NW 18th Ave. The suspects were described as two black men, one heavyset and dressed all in black and the other tall, thin and carrying a gun. Neither was said to have distinguishing features like scars or facial hair, the complaint says.

Lauderhill officers established a perimeter before the deputies arrived. After searching without their dogs, a tracking system “ping” revealed the phone had moved to the center of a parking lot on the south side of the complex, the complaint says.

Walking toward the parking lot at about 11:16 p.m., Wengert, a white man, spotted Thompson walking out of a building and toward the parking lot. Thompson, who had a beard, moustache and tattoos, was leaving a friend’s apartment, but when he saw the deputies he turned to go back to the building, the complaint says.

“Despite the fact that Thompson did not fit the description of the assailant provided by dispatch, and the fact that [he] was exiting the building when the iPhone was already in the parking lot where other people were standing,” Wengert began pursuing Thompson and “immediately drew his firearm and began shooting,” according to the complaint.

The BSO version is that Wengert fired after a fleeing Thompson shot first at him.

“He’s shooting at me”

Thompson, whose back was turned from Wengert, was hit by a bullet traveling from back to front that fractured his thigh bone and caused him to fall forward. Residents reported hearing Thompson scream, “Help…help, he’s shooting at me! I’m shot!”

“Although Thompson posed no risk of harm to defendant Wengert or anyone else, defendant Wengert continued firing at Thompson’s fallen body, hitting him eight more times,” the complaint says. In all, Wengert “discharged 25 rounds, which required that he reload his gun.”

Deputy Yoder called fire rescue at 11:18 p.m. Paramedics arrived in five minutes, but didn’t see Thompson for another 10 minutes because Wengert had instructed other deputies not to let them in right away until they made “sure it was safe in case a second suspect was there.”

During the delay, Wengert went to his car. The complaint indicates he retrieved a 9mm Luger Diamondback DB 9 pistol, planted it in the corridor about 50 feet from Thompson’s body and then “falsely claimed that Thompson had fired twice at him.”

Thompson was pronounced dead at Broward Health Medical Center at 12:57 a.m. During the confusion, the complaint says, the “actual suspect” with the stolen iPhone walked out of the front gate at the apartment complex.

What followed was an “incompetent” BSO investigation that if done correctly, would have shown that “Thompson had no involvement in the armed burglary, that he did not have a firearm, and that he did not shoot” at Wenger, the lawsuit says.

The complaint contends BSO allegedly relied “wholly” on Wengert’s version of events before deciding it was “justifiable homicide.” Evidence that didn’t support Wenger’s story “was either not addressed and/or ignored by defendant Israel.”

According to the complaint, Wengert’s sworn statement wasn’t taken until a week after the shooting. “It was contradicted by the physical evidence and the inconsistent statements of the other deputy sheriffs at the scene,” the complaint says. “Israel’s investigation accepted Wengert’s lies as fact, and then tailored the findings of the investigation to comport with Wengert’s false statements.”

Basic tests not done?

The complaint accuses BSO of failing to conduct “the most rudimentary and obvious evidentiary tests such as gunshot residue tests, fingerprint and DNA analysis which would have determined that Wengert gunned down an unarmed man.

Specifically, the complaint notes that while the dead man’s “hands had allegedly been bagged and swabbed” by the crimescene detective, the test kit for gunshot residue was never actually tested. Such a test would have shown whether Thompson recently had fired a weapon.

Likewise, no blood or Thompson’s fingerprints were found on the recovered pistol. The dead man’s epithelial DNA was found on the weapon, but the complaint says it was in a way “consistent with the Luger Diamondback being swiped across his hand or body as he lay dying.”

No DNA or fingerprint comparison was made to determine whether Wengert or anyone else had handled the gun, the complaint says.

At the time of the shooting, the complaint says, Wengert was “unfit” to be a deputy due to his “known history of violence.” Sheriff Israel knew or should have known that, yet despite Wengert’s conduct – and his “large physique” – he was never tested for steroid use.

“It is common knowledge that steroid use increases a person’s aggressiveness and can lead to violence,” the complaint says.

Even so, BSO does not test its deputies for steroid use, the lawsuit says.

BSO spokeswoman Veda Coleman-Wright confirmed that BSO does not test its deputies for steroids.

“Random drug tests are currently conducted once every quarter,” she said. “A 10-panel drug test is administered in accordance with our policy for pre-employment and random drug tests. Steroids are not included in the 10-panel drug test. However, upon reasonable suspicion, supervisors can order testing for steroids.”

The complaint also contends that BSO has had an “ongoing” investigation of steroid abuses by some deputies since 2008.

Asked about that probe, which involved as many as 26 deputies, BSO released a May 2011 memo by Internal Affairs Lt. Gregory S. Gordon that says IA merely “monitored” two separate federal investigations by the U.S. Food and Drug Administration that ended with no criminal charges against any deputies.

The memo says that instead of investigating to determine whether any BSO policies were violated by the deputies, all of Internal Affairs’ steroid cases were “reclassified to preliminary investigative inquiries…closed and marked ‘confidential.'”

The case has been assigned to U.S. District Court Judge Marcia Cooke.

Jack Nicklaus in hot water with Justice Department over filled wetlands at golf club

By Francisco Alvarado, 

The Bear's Club, co-developed by golf legend Jack Nicklaus.

The Bear’s Club, co-developed by golf legend Jack Nicklaus.

Golf legend Jack Nicklaus is in legal hot water with the U.S. Department of Justice over construction work his companies performed on environmentally protected wetlands at The Bear’s Club, a 369-acre private golf course community in Jupiter which the six-time Masters champion co-developed in 1999.

In a federal lawsuit filed to little notice in October, government attorneys allege four Nicklaus-owned entities filled close to an acre of wetlands in 2010 without permission from the U.S. Army Corps of Engineers in order to relocate a tee box, improve golfing conditions on the club’s 15th hole and make room for the development of five residential lots.

The lawsuit claims The Bear’s Club developers ignored the Corps’ denial to modify the original building permit, which included an easement agreement to set aside several acres as protected wetlands.

The Corps found out The Bear’s Club had filled the wetlands from the South Florida Water Management District on Oct. 27, 2010, the complaint states.

Federal prosecutors contend The Bear’s Club and its owners had “economic motive for seeking the modification.” The initiation fee for a golf membership at The Bear’s Club is $90,000 and the annual fee is $25,000, according to the complaint, which also named Nicklaus’ development partner Clarendon Properties Group and its owners, Ivan Charles Frederickson and Robert Whitley.

The government has asked the court to order the defendants to undertake, at their own expense and at the direction of the Army Corps, measures to mitigate the damages caused by their violations of the permit and the Clean Water Act.

Wyn Hornbuckle, a Justice spokesman, said the department doesn’t comment on pending litigation. Eugene Stearns, the Miami attorney for The Bear’s Club and its partners, said his clients deny the allegations.

Lawsuit ‘Puzzling’

“The lawsuit is puzzling for a number of reasons,” Stearns told “We believe it is a tempest in a teapot. We don’t believe we violated the agreement with the Corps.”

Last month Stearns filed a motion to dismiss the government’s complaint, alleging the Corps doesn’t have jurisdiction over the wetlands in dispute.

“The easement expressly provides that it can be altered or amended,” Stearns’ motion states. “It also expressly provides that the state and only the state and the South Florida Water Management District possesses the power to grant amendments. The appropriate state agency authorized the very work the Corps alleges was unlawfully undertaken.”

Nicklaus’ attorney also disputed the negative impact of filling the wetlands.

“The tee box required building a pad on a relatively small piece of wetlands,” Stearns said in an interview. “The change near the 15th hole was a result of people hitting balls into area that would get really muddy when it rained. If you go out there, you’ll see the wetland area is still very beautiful.”

In a response to Stearns’ motion, Justice Department lawyer Andrew James Doyle asserts the Corps does have jurisdiction over the wetlands under the Clean Water Act. The Bear’s Club violated the easement agreement by filling wetlands that were “not to be disturbed by any dredging, filling, land clearing, agricultural activities, or any other construction whatsoever,” Doyle wrote.

He added that wetlands “were to be preserved in perpetuity as a purely natural area.”

“Defendants filled the wetlands for the purpose of making the golf course easily playable for weaker players,” Doyle wrote.

Broward Health’s $70 million settlement leaves risk of criminal charges

By Dan Christensen, WhistleblowingDoctor

Court documents describe the massive healthcare fraud that led Broward Health to pay $69.5 million to settle a whistleblower’s lawsuit last week as an illegal “scheme of mutual enrichment” between the hospital system and its physicians.

Was it a criminal scheme?

Justice Department attorneys who handled the case aren’t talking. “As a general policy, the Justice Department does not confirm or deny the existence of an investigation,” said Nicole A. Navas, a department spokeswoman in Washington.

Still, the settlement agreement between the North Broward Hospital District, Broward Health’s legal name, and the government leaves open the possibility that the district and some of its past and present officers, commissioners, attorneys and physicians are the focus of a behind-the-scenes criminal probe.

For example, after releasing them all from civil liability the Justice Department specifically reserved its right to prosecute “any criminal liability” arising from the case. And Broward Health and its affiliates agreed to waive “any defenses they may have to any criminal prosecution” under the double jeopardy clause or the excessive fines clause” in the Constitution’s Bill of Rights.

Similarly, the settlement agreement left Broward Health on the hook for any tax liability under the Internal Revenue Service code. That could be a considerable sum given both the large dollar amounts involved and the duration of the fraud scheme, 14 years.

The chairman of Broward Health’s governing board, David Di Pietro, and the whistleblower’s Atlanta attorney, Bryan Vroon, both said they don’t know if a criminal investigation is underway. Vroon added that such a probe would be “rare, historically.”


Earlier this month, however, the Justice Department announced new rules for fighting corporate wrongdoing that emphasize holding individuals, not just companies, criminally accountable.

“One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing,” says a Sept. 9 memo to top-level prosecutors by Deputy Attorney General Sally Quillian Yates.

Dr. Michael Reilly, an orthopedic surgeon who blew the whistle on fraud at Broward Health

Dr. Michael Reilly, an orthopedic surgeon who blew the whistle on fraud at Broward Health

Should a criminal investigation be initiated, court records reveal an abundance of evidence describing how Broward Health and its individual administrators and physicians profited personally from the enormous fraud.

The $69.5 million settlement ended a five-year-old federal investigation that began with a 2010 federal False Claims Act lawsuit filed by whistleblower Dr. Michael Reilly, a Fort Lauderdale orthopedic surgeon. The government paid Reilly $12 million as a reward, or a bit more than 17 percent of the settlement amount.

Broward Health must pay Reilly an additional $860,000 for his attorney’s fees and costs, bringing the district’s immediate outlay in the deal to $70.4 million. That doesn’t include more than $10 million the district has already paid to an out-of-state law firm for legal advice in the matter.

Broward Health Chairman Di Pietro said the payout, while huge, wouldn’t require the district to cut services or hike taxes. He said that’s because the money will come from the district’s approximately $800 million in reserve funds.

Nevertheless, Broward Health’s proposed operating budget expenditures for 2015-2016 are 6.8 percent more than last year, or $1.27 billion.

In addition to the penalties, Broward Health Chief Executive Dr. Nabil El Sanadi signed a 46-page Corporate Integrity Agreement with the Department of Health and Human Services (HHS) that requires the district to establish a compliance program. Among other things, the agreement imposes new duties on both commissioners and staff to monitor, report and certify that its financial arrangements with physicians and vendors meet federal requirements.

Dr. Reilly, who court papers say rejected an employment offer that would have required him to join Broward Health’s illegal scheme, blew the whistle in April 2010 when he sued the district on behalf of the U.S. alleging fraud under the False Claims Act. The case was filed under seal as provided by law.

Two years later, Reilly filed a third, highly detailed complaint under seal that was the basis for last week’s settlement.

The 118-page complaint contends that numerous doctors were paid in excess of $1 million even though collections for their personal work were much less. It also says Reilly alerted Broward Health’s leadership to the law breaking in 2003, 2004 and 2009, but was ignored.

U.S. District Judge Jose E. Martinez unsealed the complaint on Sept. 15.

The government’s investigation of Reilly’s claims, led by HHS agents, focused on what turned out to be numerous apparent violations of federal laws enacted to address abuses that occur when doctors have financial relationships with entities to which they refer patients.


The federal Stark Law, for example, generally bars physicians employed by hospitals from referring patients to their employers and prevents hospitals from presenting healthcare claims that flow from prohibited referrals. Exceptions exist for “bona fide employment relationships” in which a doctor’s remuneration takes no account of referrals, is “commercially reasonable” and consistent with fair market value.

Another law, the Anti-Kickback Statute, prohibits hospitals from paying and doctors from accepting “anything of value” as a reward for referrals. The law includes civil assessments of up to three times the amount of the kickbacks. 

Violators can also be barred from participation in federal healthcare programs and face up to five years in prison per violation.

Reilly’s third complaint says that instead of complying with the law “Broward Health has done the exact opposite.”

“In compensating its employed physicians from 2004 through the present, Broward Health has deliberately and repeatedly violated all three of these requirements,” the complaint says.

Assistant U.S. Attorney Mark Lavine

Assistant U.S. Attorney Mark Lavine

While Broward Health admitted no wrongdoing, it settled without challenge serious and embarrassing allegations about a long-hidden scheme involving the payment of kickbacks to doctors who referred their patients to Broward Health’s four hospitals and other facilities for expensive testing and treatment.

“I think paying $70 million without litigation says something,” said attorney Vroon.

Representing the government were Justice Department Senior Trial Counsel David T. Cohen and West Palm Beach Assistant U.S. Attorney Mark Lavine.

The settlement agreement, signed by Dr. El Sanadi and lawyers for the district, says the illegal scheme went on from 2000 until last year.

Nine staff doctors are identified in the settlement as having had “improper” contracts that the government contends violated the federal Physician Self-Referral Law. Specifically, it was alleged that Broward Health grossly overpaid those doctors to obtain larger referral profits in return.

The physician who benefited the longest from such overcompensation was cardiologist Michael Chizner, medical director of Broward Health’s Heart Center of Excellence. His contract was in effect from April 1, 2000 until May 31, 2014, the settlement says.

PHYSICIANS TAKE PAY CUTS reported in January that Chizner accepted a pay cut from $1.2 million to a maximum of $867,000, and a requirement that he treat poor people after the district threatened him with termination. Broward Health acted to impose those terms after declaring Chizner’s contract illegal in the wake of pressure from federal authorities.

Broward Health cardiologist Michael Chizner Photo: WPLG-Channel 10

Broward Health cardiologist Michael Chizner Photo: WPLG-Channel 10

Many other doctors also accepted pay cuts and contracts modified to comply with federal law.

The other Broward Health physicians on the list are cardiologists Violeta McCormack, John Rozanski and Ashok Sharma; orthopedic surgeons George Caldwell and Erol Yoldas, team physicians for the Florida Marlins; Rudolph Roskos, chairman of the department of pediatrics at Chris Evert Children’s Hospital, and pediatrician Hector Rodriguez-Cortes; and Shazia Zafar, a hematologist now with Memorial Healthcare.

More than a half-dozen other doctors are mentioned elsewhere in the third amended complaint as having been paid excessively as part of Broward Health’s scheme to generate lucrative referrals.

Court documents estimate that from 2004 to 2011 Medicare and Medicaid suffered $147.5 million in damages due to improper claims filed as a result of “tainted” referrals by Broward Health physicians. If the case had gone to trial, Broward Health faced the possibility of being found liable for more than $700 million in actual and punitive damages.

The estimates did not include damages prior to 2004 or damages suffered by Tricare, the military’s health system, or other federal health insurance programs for federal employees.

Dr. Reilly’s complaint says Broward Health, a medical safety net that’s obliged to treat patients regardless of their ability to pay, used a secret accounting system to turn up the heat on doctors whose referrals lagged “even when patient care was compromised.”

“When employed orthopedic surgeons had significant concerns regarding the quality of Broward Health’s radiology and MRI imaging services and chose to refer patients to other facilities for such services, Broward Health’s financial strategists pressured the orthopedic surgeons to continue to make referrals of all radiology services to Broward Health,” the papers says.

Broward Health chairman Di Pietro denied that patient care was compromised in a statement released last week. He said the investigation was “focused solely on highly complicated contracts with physicians. This investigation was never about patient care.”

Broward Health Commission chairman David Di Pietro Photo: WPLG-Channel 10

Broward Health Commission chairman David Di Pietro Photo: WPLG-Channel 10

Vroon, however, said the probe “has everything to do with quality of care.” He said that if the case had not settled, government lawyers would have scoured physicians’ medical charts looking for unnecessary patient testing or procedures. “But Broward Health settled way before it got to that point,” Vroon said.

To obtain referrals, the district grossly overpaid doctors in each of its five physician practice groups – primary care, cardiology, hematology/oncology, orthopedics and “other,” the complaint says.

That excessive compensation generated approximately $160 million in losses for Broward Health from 2004 to 2012 alone, the complaint says.

In an interview, lawyer Vroon, said the estimated losses rise to $200 million for conduct dating back to the start of the scheme in 2000.

Thousands of Medicare and Medicaid patients referred to Broward Health for testing and treatment by its staff physicians more than erased those losses.


In 2009, for example, excessive compensation paid to employed physicians across the Broward health system was cited as the primary factor in a net operating loss of $17.5 million. But $28 million in doctors’ referral profits transformed that loss into an $11.4 million profit, the complaint says.

Doctors went along with the scheme because their pay was “more than fair market value and more than they can ever hope to collect for their personal services,” the complaint says.

Broward Health’s focus on bottom-line profit was part of a “deliberate” scheme in which administrators used what amounted to a second set of books to secretly track and conceal the fraud from Broward taxpayers and federal regulators.

“Broward Health’s physician compensation strategy has been a scheme of mutual enrichment in which Broward Health has paid its employed physicians far in excess of the value of their personal services while Broward Health has received massive profit in inpatient and outpatient referral from such physicians,” the complaint says.

Much of those profits came via federal healthcare programs. Since 2004, Broward Health was paid more than $2 billion by Medicare and Medicaid.

“A significant portion” of those dollars “derived from inpatient and outpatient referrals by employed physicians receiving excessive compensation,” the complaint says.

Broward Health and its doctors weren’t the only ones to make money in the fraud scheme. The complaint cites district “financial strategists” who “personally profited from their scheme under a bonus compensation program based in part on revenues from inpatient admissions and outpatient visits to Broward Health hospitals and clinics.”

Broward Health’s first management incentive plan for executives was approved in 2003. Bonuses were as high as 20 percent of annual salary based on financial performance.

Besides the hospital district, the complaint lists 100 “John Doe” defendants identified only as “contractors, agents, partners and/or representatives” that were part of the conspiracy to submit false healthcare claims.

“The Broward Health defendants have knowingly and repeatedly violated federal Stark and Anti-Kickback laws (and) have knowingly submitted thousands of false claims to federal healthcare programs which arose through tainted referrals from employed physicians receiving excessive compensation,” the complaint says.

The case surfaced in May 2011 when HHS agents served a subpoena on Broward Health seeking records of its business dealings with 27 physicians, including information about compensation, hospital admissions and referrals dating to 2000.

Federal agents went on to build a case based on “extensive evidence” supplied by Dr. Reilly, including information that court papers say was derived from “secretive internal reports kept and concealed by Broward Health and from private communications and private admissions of Broward Health officers.”


The complaint says that before hiring a physician, Broward Health projected the value and volume of their anticipated referrals and used it to calculate compensation. After a doctor was hired, the district tracked their referrals in secret “Contribution Margin Reports,” Broward Health lingo for referral profits, the complaint says.

The complaint notes that those “CMR” reports and other evidence of Stark law violations were “deliberately concealed” from the public even though the hospital district is subject to Florida’s Sunshine and public records laws.

The CMR reports were also used to track physicians’ uncompensated referrals – that is, referred patients whose care is subsidized mostly by Broward tax dollars. Broward Health forced doctors who referred those patients to pay the balance due out of their income, the complaint says.

Similarly, the district tracked charity case referrals and “used such data to discourage employed physicians from making significant charity referrals” that would reduce Broward Health’s profits.

Indeed, the idea of giving back to the community appears to have been foreign to many of Broward Health’s staff doctors.

“The overall charity care numbers for employed physicians are extremely low,” the complaint says. For example, in 2009 25 employed physicians practicing at Broward General produced total revenue from compensated care of just over $13 million, but their total charity care was “a minuscule $88.”

The complaint cites former Broward Health Vice President of Physician Services Brian Ulery as having “touted” CMRs in private meetings and confirming they’d been “concealed and ‘not listed in our financials.’” Ulery resigned four months after the subpoena was served in 2011.

Likewise, the complaint refers to a similar admission by then-Broward Health Chief Executive Frank Nask during a private conversation with Dr. Reilly in May 2009. Reilly had asked Nask why sports medicine orthopedic surgeons were being paid at such high levels to cause operating losses each year.

“We are making money off these guys,” the complaint says Nask replied. “These numbers don’t include what they’re bringing in with labs, P.T. (physical therapy) diagnostics etc.”

Nask was pushed out last fall by the district’s board of commissioners, all appointees of Gov. Rick Scott, amid the pressure of the federal investigation. To get him to step down quietly, one knowledgeable source said, Nask was given a lucrative one-year consulting deal at his CEO salary of $617,000, plus benefits.

“These payments and benefits shall be provided to Nask regardless of whether a request is made for consulting services by the district,” his contract says.

In search of referrals, Broward Health boosted compensation to some cardiologists by awarding them what the complaint calls “sham” contracts as medical directors that required little or no work.

“One medical director does his personal exercise workout and counts such hours as his ‘medical director’ hours. One ‘medical director does not know how to read studies in the laboratory for which he is the director. Yet another ‘medical director’ counts hours doing procedures as ‘director’ hours,” says the complaint, which labeled the practice a “boondoggle.”

The cardiologists identified in the complaint as having gotten those sham medical directorships were Drs. Chizner, Sharma, McCormack, Rozanski and David Perloff.

Federal judge tosses out town’s RICO suit against residents seeking public records

By Dan Moffett, The Coastal Star 

Martin O'Boyle, left, and Christopher O'Hare

Martin O’Boyle, left, and Christopher O’Hare

Gulf Stream’s legal offensive against residents Martin O’Boyle and Chris O’Hare suffered a huge setback late last month when a federal judge in West Palm Beach threw out the town’s federal racketeering suit against the two men.

U.S. District Court Judge Kenneth Marra said that, while he was sympathetic with the town’s “very difficult situation” because of the hundreds of public records requests O’Boyle and O’Hare had filed, their actions did not meet the legal standards for suing under the RICO statute. (more…)

Sexual affair between Miami judge, witness alleged amid tainted U.S. court proceedings

By Dan Christensen, 

Former Royal Canadian Mounted Police investigator William Majcher and Miami federal judge Ursula Ungaro

Former Royal Canadian Mounted Police investigator William Majcher and Miami federal judge Ursula Ungaro

A dozen years ago, Miami U.S. District Judge Ursula Ungaro sentenced Martin Chambers to 15 years in prison after a two-week trial at which a jury found him guilty in a scheme to launder millions of dollars for a Colombian drug cartel. Chambers, a Canadian, remains imprisoned today.

For years, hushed allegations have swirled that Judge Ungaro slept with the government’s key witness in the case – a dashing Royal Canadian Mounted Police undercover agent

Ungaro’s ex-husband, who claims the affair ruined his marriage, first made the scandalous allegations along with related assertions about alleged misconduct by an FBI agent and a federal prosecutor.

Later, the alleged affair was cited as evidence of judicial bias in Canadian court proceedings that sought to win Chambers’ release. The allegations also were briefly a focus of the FBI in Miami, which appears to have done little to investigate them despite a referral from then-U.S. Attorney Alex Acosta.

The allegations, too, were the subject of tainted U.S. court proceedings before Judge Ungaro herself.

Records show that Chambers, acting as his own lawyer, sought a hearing in March 2012 after learning of Ungaro’s alleged “sexual affair” with William “Bill” Majcher, an important investigator in the case against him.

Judge Ungaro, however, dismissed the case without a hearing less than a month later. She did so even though Chambers’ petition was all about her alleged misconduct, and how her actions may have corrupted the trial or sentencing.

Further, Ungaro ruled after having twice before disqualified herself from hearing matters involving Chambers. Five months later, she would recuse herself a third time after Chambers raised the matter again.


Ungaro’s orders do not say why she recused herself, and she did not respond to detailed requests for comment by Federal judicial canons, however, require judges to disqualify themselves in any proceeding in which their “impartiality might reasonably be questioned.”

Asked about the matter, Chief Judge K. Michael Moore declined to comment.

Martin Chambers  Photo: CBCNews

Martin Chambers
Photo: CBCNews

The story of the relationship between the federal judge and the Royal Canadian Mountie, and its possible impact on justice in the case of Martin Chambers, got limited media attention in Canada in 2012, but has remained largely under wraps in South Florida where Chambers was convicted in a high-profile FBI-led sting operation, “Bermuda Short,” that targeted money laundering and securities fraud.

While Ungaro would not comment, Majcher, who lives in Hong Kong and states on his Linkedin profile that he retired from the RCMP in 2007, denied any impropriety.

“I will be very clear…there was zero relationship between myself and Judge Ungaro during trial, or before sentencing,” Majcher said in an email. “For the record, I became friends with Judge Ungaro the year after the Chambers trial when I was in Miami for trial preparation on an unrelated accused in front of a different judge.”

FBI agents twice interviewed Judge Ungaro’s ex-husband, former Miami lobbyist Michael Benages, in July 2008. Among those agents was then Miami Special Agent-in-Charge Jonathan I. Solomon.

FBI 302 reports of those interviews, with some redactions, were released later to Benages in response to his Freedom of Information request. Benages provided copies to and other news organizations.

In an interview, former Miami U.S. Attorney Alex Acosta said Benages first came to him. “He did bring this to my attention and I referred him to the FBI to make sure it got seriously vetted,” said Acosta, who served from 2006 to 2009.

The trial of Martin Chambers on five counts of money laundering began on Aug. 21, 2003 and a jury found him guilty on all counts two weeks later. Judge Ungaro sentenced Chambers to 188 months in jail on December 5, 2003.

In an interview, Benages said he does not know precisely when the affair occurred, but believes it happened after the trial, but before sentencing. “But the courting started before,” he said.


Benages told the FBI agents that around Christmas 2003, shortly before she moved out of their home, Ungaro admitted to an affair with a Mountie, who was a witness in a money laundering trial, calling it a “mistake.” Ungaro later told Benages the Mountie had informed her that an Assistant U.S. Attorney (AUSA) and an FBI agent said Benages “was about to be indicted,” the report says.

Benages did not recall the Mountie’s last name. But he said Ungaro soon filed for divorce even though the story about his impending indictment proved to be untrue.

Michael Benages

Michael Benages

“Approximately three or four months later, [Name Redacted] told Benages that the [Redacted] admitted to her that the FBI and the AUSA had told him that it was all a joke and Benages was not really going to be indicted. [Redacted] stated that she knew who the FBI agent was, however, did not provide Benages with the name,” according to a July 30, 2008 FBI report.

Benages filled in the blanks in a recent interview. He said he told the FBI that it was Ungaro who told him that Mountie Majcher had informed her that talk of an indictment was a “joke.”

At the time, Benages didn’t know the names of either Majcher or Chambers and he wanted the FBI to investigate. The reports make clear, however, that the FBI was more interested in asking Benages about any corruption he might have witnessed during his work as a lobbyist.

“Why wasn’t this investigated more seriously?” asked Benages’ attorney Joseph Carballo.

Miami FBI spokesman Jim Marshall said, “We have no further comment/information on this matter.”

The FBI reports say Benages offered the “theory” that he was specifically targeted by the false story of his imminent indictment. Benages speculated to agents that it was Marcos Jimenez, Miami U.S. Attorney from 2002-2005, who was responsible.

Benages explained to the FBI that Jimenez had had trouble getting confirmed as U.S. Attorney because of an incident between Jimenez and his wife, and Jimenez knew that Benages was privy to an FBI background report about that incident.

“Benages stated that [Redacted] lied twice on his FBI report. Benages explained that the FBI report had been provided to his wife and that she had told him about the report in bed. Benages stated that he had not seen the FBI report, however, that Ursula told him that [Redacted] had denied in the report that he had beat his wife with a hammer, which had caused her to admit herself into the hospital under a false name,” the report says.


“The FBI agent and assistant U.S. attorney knew about the inappropriate relationship and exploited it to cause a rift between my wife and myself and intimidate me into staying quiet about what I knew about their boss, Marcos Jimenez,” Benages said in related paperwork filed later with the Department of Justice.

Former Miami U.S. Attorney Marcos Jimenez

Former Miami U.S. Attorney Marcos Jimenez

Ungaro and Benages divorced in 2004. In August of that year, after Chambers appealed his conviction, Ungaro signed an “order of recusal as to Martin G. Chambers.” The case was reassigned to Miami U.S. District Judge Jose Martinez.

Court records show that Ungaro’s recusal didn’t keep her from ruling against Chambers three years later, on Aug. 27, 2007, after his Miami attorney, Gerald Houlihan, asked the court to vacate Chambers’ sentence.

Ungaro disqualified herself again six months later, Feb. 4, 2008, a few days after Houlihan asked the court for “compassion” and support for Chambers’ application to be transferred to a Canadian prison so he could “serve the remainder of his sentence close to his family.”

Ungaro again gave no reason for her recusal, but it caused the clerk’s office to reassign the case again, this time to Judge Cecilia Altonaga.

The twin recusals meant that two federal judges, Altonaga and Martinez, were now assigned to Chambers’ case. The unusual result: two separate judicial rulings on the same motion. Martinez denied the motion seeking support for a mercy transfer on Feb. 5, 2008. Altonaga denied it again on March 28, court records show.

Four years later, on March 26, 2012, Chambers went back to court as his own attorney after learning of Benages’ accusation that Judge Ungaro had had a “sexual affair” with Majcher “during the pendency of my criminal case.”

“The validity of the entire investigation was based on the credibility of RCMP Officer William Majcher, the individual who had this alleged relationship with the judge,” wrote Chambers. “It is absolutely essential that the petitioner be given a hearing to be able to establish the nature of the relationship between the trial court and the chief RCMP investigator, and the time-frame within which that relationship occurred.”

Like the prior motion to vacate sentence, Chamber’s motion citing newly discovered evidence was immediately given a new case number by the clerk’s office and assigned to Judge Ungaro.

Two days later Magistrate Patrick White recommended the motion be denied on technical grounds. On April 19, 2012, Ungaro adopted White’s recommendation and signed an order closing the case without a hearing. It was the second time she ruled against Chambers after disqualifying herself.


Ungaro’s ruling was upheld a week later by the 11th Circuit Court of Appeals. A three-judge panel held that even if true “the newly discovered evidence” of a sexual affair between the trial judge and a government witness “has no bearing on Chambers’ actual guilt or innocence in the money-laundering offenses.”

The court did not address whether it was proper, or legal, for Judge Ungaro to rule in the case after having disqualified herself.

On May 29, 2012, again from his prison cell, Chambers petitioned the district court for what’s known as a writ of error coram nobis, claiming Ungaro was biased against him, the government failed to disclose its knowledge of the alleged affair and that he was denied due process.The clerk’s office again assigned the case to Ungaro despite her prior recusals.

Ungaro dated her third unexplained recusal order on Aug. 1, 2012, though it was not docketed until two days later. In between, Miami Assistant U.S. Attorney Eric Morales filed court papers opposing a hearing and calling the matter “a delayed regurgitation of gossip”.

Chambers’ “claim only rises to the level of hearsay that, even if true, would merely establish an appearance of bias or impropriety,” Morales wrote.

Magistrate White again recommended the case be dismissed. Judge Martinez adopted the recommendation and closed the case on Sept. 28, 2012.

While Chambers attempted to litigate in court, Benages pursued an unsuccessful $5.5 million damages claim at the Justice Department starting in 2009. The alleged damages included the cost of his divorce, the loss of marital assets and related health ills that led to “the demise of my lucrative lobbying business and consulting law practice.”

The complaints contain additional details, including Benages’ assertion that “in the second half of 2003” he and his wife dined with Majcher and another Mountie at a local restaurant. Before the dinner, he said, “Ursula received a gift of an authentic Royal Canadian Mounted Police hat.”

In other interviews, Benages narrowed the time of the dinner as in September or October of that year.


Benages also accused the FBI in a July 2012 complaint of twice conducting “black bag operations” against him during the previous year “in preparation for what they expected would be litigation on my part.”

Benages claimed to have spotted an FBI car parked near his home in Coral Gables, then discovered that supporting documentation for his claim “had disappeared.” He said a similar incident occurred after he moved to Wilton Manors.

Benages’ lawyer said in a recent interview that about the same time documents relating to Benages that he kept stored on his computer also went missing.

“It could have been that they were wiped clean by mistake, but I doubt it,” said Joseph Carballo, who at the time had an office at 717 Ponce de Leon Boulevard in Coral Gables. “I didn’t realize it had happened until months later when Michael Benages asked me for a copy of the file and I went to look for it and it wasn’t there.”

“I recall seeing emails from his ex-wife where they were smoking gun type emails…that suggested, that kind of corroborated that she was having an affair with someone in the time frame that he’s talking about,” said Carballo.

Meanwhile, 75-year-old Martin Chambers remains at a low-security Federal Correctional Institution in Forrest City, Arkansas. His scheduled release date is Sept. 7, 2016.

Chambers’ attorney is John W. Conroy of Abbotsford, British Columbia. Conroy said recent efforts on Chambers’ behalf have focused on getting him transferred back to Canada rather than building a case for judicial bias.

“We were trying to find out what happened from the RCMP. We believe Majcher was disciplined in some way, but we were unable to get to the truth,” said Conroy.

Conroy said that both the U.S. and Canada have now agreed to transfer Chambers to Canada, where he would be eligible for immediate release under Canadian law. Chambers could be returned to Canada as soon as next month.

Page 1 of 512345»


Notify me by email when new stories are published.