Date to be Published: 10/13/20
Publisher: Acorn Publishing
BLOOD MONEY is the true legal thriller of a terrifying David vs. Goliath fight against massive healthcare fraud by a brave Whistleblower. It includes attempted murder, extortion, money-laundering, fraudsters hiding money in the Cayman Islands, gold buried in a storage container in a CEO’s backyard, an Assistant Attorney General sabotaging her state’s case, and a corrupt Governor torpedoing litigation by his own Attorney General. From Silicon Valley to the Sunshine State, in a showdown that reads like a Hollywood movie, Chris Riedel survives to share it all. His actions have resulted in more than $550 million in settlements and a court verdict… and counting.
Finally, in January 2018, I received my wish when I heard the bailiff’s words to a packed courtroom: “All rise, Richard M. Gergel presiding.”
With that, the trial against Tanya Mallory, Brad Johnson, Cal Dent, and BlueWave began.
Five years after filing our lawsuit, our day in court had arrived in a nondescript four-story brick building in Charleston, South Carolina. Only a small sign outside the door identified it as a U.S. District Court. Inside, it was beautiful, classically Southern and ornate with rich mahogany columns and a plush deep blue carpet adorned with gold stars. The jury box had a terminal in front of each seat for easy viewing of evidence.
Fittingly, Judge Gergel was a very polite southern gentleman with silver hair and a ready smile. We heard many “y’alls” and “we alls” throughout the trial. We soon learned he was very intelligent, could recite case facts at will when motions were argued by the lawyers, treated both sides very fairly, and was quick to rule. That alone was a relief, given how much foot-dragging we’d experienced in more than a decade of Qui-tam lawsuits. This federal judge was a big step up from the state judges we had faced.
The government prosecution team consisted of Jim Leventis, Jim’s boss in the South Carolina office, nine attorneys from Main Justice in D.C., two FBI agents, two OIG agents, and others I was never able to identify. In all, the team totaled seventeen, as large as the Enron team in the early 2000s, according to Su Kim, the OIG Agent who wore a gun and had interviewed me at the start of the case in 2013. Enron rocked Wall Street with $74 billion in shareholder losses and led to the fall of the giant Arthur Anderson accounting firm — and jail time for Enron executives Kenneth Lay and Jeffrey Skilling.
This looked like it would be a trial with the BlueWave lawyers making all sorts of attempts to change focus and direction while obfuscating the facts. As we proceeded, I realized that in this judge’s court, the prosecution would be allowed to roll out every bit of its case. Within it lay all the twists, obstructions, obstacles, backroom deals, sleights of hand, promises made and not kept, intimidation, kickbacks and other tools of the fraud trade when millions and billions of dollars are involved.
Even before the jury was seated, two of BlueWave’s independent sales contractors advised government lawyers they intended to plead their Fifth Amendment rights on the stand, so as not to incriminate themselves. The first, Leonard Blasko, had signed a Proffer with the DOJ to offer specific testimony in exchange for not being prosecuted. After discussion, Judge Gergel stated that he would talk with Mr. Blasko. He was called to the witness stand. After Judge Gergel told him that he could only refuse to answer questions that would directly implicate him in a crime, he excused Blasko from the witness stand.
The second contractor rep, Kyle Martel, had pled the Fifth to every question during his deposition. DOJ could not get him to Charleston from Florida; he’d conveniently scheduled knee surgery the next day. Judge Gergel didn’t bat an eye. He immediately ordered a bench warrant for Kyle’s arrest and instructed the U.S. Marshal’s service “To go get him.” Two hours later, DOJ lawyers told the judge that Kyle had agreed to fly up that evening.
Finally, a U.S. Marshal escorted the jury of nine women and three men into the courtroom. All appeared to be older than thirty. The judge explained that the government burden was to show that a preponderance of evidence supported the government’s case. Civil trials did not require the prosecution to establish “Beyond reasonable doubt.” He added that the government alleged unlawful marketing practices that violated the Anti-Kickback Statute and the False Claims Act, while the defense alleged that the defendants acted lawfully, not knowing they did anything unlawful.
Jim Leventis rose for the opening prosecution statement and faced the jury. “This case is about blood money and greed. What the defendants were willing to do for the love of money,”
About the Author
CHRIS RIEDEL is a Silicon Valley entrepreneur who has founded five healthcare companies and served as the Chairman and CEO of all. Chris achieved the Silicon Valley dream when he took his third company public in 1991. A few months later, it was ranked by Business Week as the 40th best small company in America. Soon after founding a fourth company, his battle against healthcare fraud began. In 2011, he received the Taxpayers Against Fraud Whistleblower of the Year award.