Monday, August 20, 2012

Romney and Bain profited from MASSIVE Medicare Fraud

From the delightful gift that is John McCain’s opposition research on Mitt Romney (courtesy of namelessgenxer) comes the sordid tale of Mitt Romney's tenure on the board of Damon Clinical Laboratories, which plead guilty to charges of defrauding Medicare and agreed to pay what was at the time the largest health care criminal fraud fine in history – $35,300,000.00 They also agreed to larger civil fines which totaled $83,700,000.00.

The time line goes as follows.
1988: Damon begins a systemic practice of fraud. The government estimates later that the total cost to taxpayers of this fraud is around $40,000,000

1990: Bain Capital (CEO Mitt Romney) buys a minority stake in Damon. Mitt takes a seat on the board of directors

1990 to 1993: Mitt serves on the board of directors, earning ~$10,000 per year for doing so. He is on the company’s “Strategic Planning” committee

1992: Romney said that Rosen told the board in about 1992 ‘that all current practices at the company were now in conformity with government regulations and that in the past there may have been practices which would not be deemed appropriate.

1993: Damon is taken over by Corning, with Mitt Romney voting in favor of the acquisition

1993: Corning immediately closes Damon’s Massachusetts plant and lays off 115 workers

1993: Corning uncovers the fraud and alerts authorities. The SEC filings made by Damon prior to the acquisition make no mention of any potential earnings write-downs or legal problems

1993: Mitt Romney’s share of Bain’s profit from the Damon investment: $473,000

1993: Bain’s profit from its investment in Damon: $7,400,000, which represented a tripling of the initial investment

1994: Running for Senator, Mitt Romney says:

I’m proud of the small part I played in the growth of Damon,’ Romney said yesterday. ‘It’s something that Ted Kennedy doesn’t have a clue about – creating real jobs in the private sector.

2002: While running for governor, Romney claims that he helped uncover the fraud by starting an investigation. This version of events is disputed by Corning and by the Federal Prosecutors. Romney also says he never alerted the authorities, which no one disputes.

(read the rest)

1 comment:

  1. Nice posting on the timeline and the facts concerning this story. Thanks. Enjoyed it.