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.”

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Latest comments

  • How did the General Counsel- Lynn Barrett and Interim President- Beverly Capasso and Chief Compliance Officer Nick Hatfield permit an 8/31/17 certification of compliance by all executives go to the Feds when they knew about this and BH continues to accept lease payments from 21 Century even though it filed chapter 11 and didn’t pay for a period of time.

    Speaks to the possible corruption of Lynn, Bev and Nick in looking the other way or just further evidence of their incompetence to be in such roles.

    The feds should force the sale of BH and remove the Board and the new 450K per year inexperienced COO and CFO all they do is dress nicely and have nothing between their ears.

  • Unfortunately, the graft and corruption that has surrounded Broward Health (and previously North Broward Hospital District) speaks volumes of why political appointees that know little about healthcare, but a lot about their own wallets – should not be on the board of a public entity. This hospital system is the 2nd largest employer in Broward county, the second most populous county in the state. This hospital system should be sold. Good doctors have watched the manipulation of the district for personal gain for years. Complaints ignored and the general public hurt by greedy board members and money motivated political structure. The phrase “drain the swamp” is most appropriate with this hospital system and it’s cronies.

  • Lynn, Bev, and the two boys are true rejects from Jackson, Lynn was fired, Bev was fired the CFO had so many positions and no one wanted him, and the CEO of Jackson North, now the system COO was not the best employee of our public health trust, both about to be fired, So Broward Health we are pleased they have gone and wish them luck and the people of Broward Heath luck in their new “leaders” GOD HELP YOU ALL, I really mean GOD HELP YOU ALL

  • Working for the district for over 25 years the corruption is unbelievable, complaints are ignored, compliance and ethics issues are ignored, the work environment is hostile, intimidating and abusive. There is bullying and disrespect, our previous chief of staff has it right, however what did he do to help correct it? I agree drain the swamp but be careful what critters will come out to bite you hidden in the dirt and mud, one day the whole truth will come out and it will not be nice. Oh I don’t think the cronies are left but are replaced by new ones !

  • Wake up and smell the coffee folks, so many positive changes, come on where is the positive “can do” attitude? What was was and what is is

  • RAM, your joking right, can do attitude? What more CAN the beat up employees DO? Been here more than 20 yrs, have never seen morale this low or working environment this bad. The “new Guys” have mandated more cuts, which again comes on the backs of the workers. Why not on the big bloated bureaucratic management staff. No, they want to squeeze our nuts to get their bonuses. Why the f should anyone in this shit sandwich get bonuses. My workplace is running to the bone. We are tired, abused by medical staff, and unsupported by management I like many of my colleagues come to work and give outstanding HEALTHCARE. Only to have it undermined by the bloodsucking purveyors of WEALTHCARE, to line their pockets. Drain the Swamp? we work in the swamp. Yes so please drain it and all the POS THAT RESIDE THERE!

  • Oh yeah, and those two new leaders CEO and CFO, especially a big F YOU.why does the district keep making the same mistakes and hiring shit sticks to run things. Worked at Jackson. Really? Before or after they were $285 million in the red? The new CEO was called out for her fake online degree. Still got hired. Try that bullshit with Human Resources at the working level, never get a job. So we’re f—ed again. Please just sell us, trade us, merge us, help us. But mostly just get the f— away from us.

  • I agree with you RickyBobby- look at how the new COO, CFO and Human Resources Guy are Executive Vice Presidents..we know that means more money than those in the role before them who were just 300K per year plus regular VPs, now the new EVPs are in the 400s! Trump tax break for them!
    Also now former Director roles at corporate are now Associate VPs and Corporate is hiring a ‘Chief Experience Officer’ Newsflash! The experience sucks because unhappy staff equals unhappy patients and poor care. They make more and we make less and get our hours cut. TIME FOR ANOTHER UNION VOTE AND THIS TIME WE NEED TO WIN!

  • SEIU is the answer but I think even they would not be willing t take on this corrupt bag of nonsense

    So many in this district hard to tell which is the worst shit stick but we all know shit sticks and stinks that is why we have so many problems

  • yesterday my boss told me about the SAD loss of Robert Bugg a good man focused on staff and patients, and doing the right thing …..he was told (according to my boss) that they had found an outside person the replacement would be in 2 weeks and it would be an outside person BUT my boss just called me and told me it would be Alice Taylor, WHAT ………. BIG BIG BIG MISTAKE, This is so BAD having worked at Imperial it was so nice to transfer to BHN and now this, are you kidding? Who are these people who make these choices and what happened to the outside person ? Perhaps they got wise as to what it would be like, NEXT we will see the over bearing wife of my boss promoted to COO and that is not conflict of interest? I guess not, BUT wait it all ready is ……BH is so messed up so messed up……

  • Yes, Handy Guy you are right, it is a sad day for BHN, and the District in general. To lose a Guy like Robert Bugg, so unceremoniously and replace him with a POS like Alice Taylor is a crime against humanity. These f-need to be dragged in front of the World Court at Hague. But it’s more of the same from these cretinous ftards. So, Bobby Bugg, We that stand on the deck of this Titanic like disaster and sing”Nearer My God to Thee”, We salute you and Thank You, for a job well done.

  • To take Robert away like this is criminal
    The swamp is filling up with more slimy snakes
    To have Alice here, are you going kidding , and of course all the sick managers are saying how nice she is and how nice to have a change, you are all sick
    as For the new COO let’s hope it is from the outside because no one here has the qualities to take the position
    Oh add yes bring back the SEIU vote UNION NOW

  • I am a hospital recruiter, recruiting many staff from Broward Health, I am stunned at why a system would replace someone very popular with someone not at all popular, of course I do not work there and I can not believe everything written but it seems you really have a perfect storm brewing and you have some very upset and angry staff
    As for nepotism this is strictly monitored by our corporate compliance and is not allowed at all, we found it causes too many problems, I am so surprised at Broward health, on many levels, and it seems you have some very unhappy angry staff, Also asking for the union, these are warning signals of a toxic culture

  • Alice Taylor is NOT a formal employee at Broward Health – how can she be the CEO of a medical center?

    Bev Capasso is under the mission of ruining the good employees at BH. Please go away! No ethics! Everything will come back to you for all that you did to the good people, you watch!

  • I have worked at north and medical center BOTH are so corrupt. Anyone recruited new with new ideas are immediately isolated the whole work environment is truly toxic, I would keep my head down and just work with little conversation to anyone. Yet the irony of this was in my self preservation I was destroying myself, my manager used humiliation to dominate, misinformation gossip and rumors made it impossible to work effectively. The poison creeps behind the walls the physicians are more like a mafia, looking after their own and as they would say feed each other consults, sometimes 10 people on a case, all unnecessary, that is a federal violation and yet nothing is done about it. I would mentally rehearse specific ways to take positive action, mental and physically I would think I would be able to overcome this but unfortunately it was like working with the stepford wives, new staff with new ideas would be isolated out, and made examples of by humiliation. There is definite bullying and lies and corruption in essence working at Broward was truly toxic, I did not leave my job I left a toxic organization,

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