Fata whistle-blower settles suit; new allegations arise
The whistle-blower who helped crack the criminal case against Farid Fata has settled his lawsuit against the former oncologist for about $1.7 million, but the case is far from over, with new allegations surfacing.
Attorney David Haron, who represents former Fata employee George Karadsheh in the whistle-blower lawsuit, confirmed to the Free Press Monday that an amended complaint was filed in late December with allegations against new, unnamed defendants. The allegations and names of the new defendants will remain sealed for the next several months, according to federal court documents, while the U.S. Attorney's Office investigates the claims.
Fata, a once-prominent Oakland County doctor, pleaded guilty in September 2014 to intentionally poisoning hundreds of patients through unnecessary treatment and raking in more than $17 million from fraudulent billings. He was sentenced to 45 years in prison.
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The whistle-blower lawsuit was initially filed in 2013 by Karadsheh, who worked as a business manager for Fata's practice. The lawsuit named Fata; Fata's wife, Samar; the Swan For Life Cancer Foundation; Vital Pharmacare; and several others as defendants.
According to the federal documents, the U.S. Attorney's Office had reached an agreement with Karadsheh that would have permitted "several defendants" to be dismissed from the initial lawsuit. But the documents show the action was halted, pending the review of the new allegations.
"Part of it (the lawsuit) was unsealed to let people know that George Karadsheh was the person who started the investigation and not anyone else," Haron said Monday. "The part against Fata is done. George agreed to take less than he was entitled so the victims would get more, we’re just waiting for the payment. The payments have to come from the amounts that were forfeited."
Whistle-blowers typically receive 15% to 25% of the money, but Haron said Karadsheh agreed to take 10% so the victims could receive more.
Haron said there are no new allegations in the amended complaint against Fata or any of the other original defendants.
Gina Balaya, spokeswoman for the U.S. Attorney's Office, said, in a brief statement to the Free Press on Monday that she's "not able to confirm nor deny whether we are looking into any new allegations or individuals at this time."
The U.S. Attorney's Office filed a motion Dec. 28 to enlarge the seal on the lawsuit and allow attorneys in the case a six-month period to investigate the new claims. U.S. District Judge Denise Hood granted the motion Dec. 30, according to federal court documents.
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"The United States had reached an agreement with the private party (Karadsheh) in this case that would have permitted the case to be dismissed as to several defendants in this action," the U.S. Attorney's Office wrote in the motion. "After the agreement was reached, however, the private party relator (Haron) filed a second amended complaint, under seal, which contains new allegations and new defendants. The United States respectfully requests an additional six-month investigative period to investigate the new claims and to make an intervention decision in the case, during which time the second amended complaint would remain under seal."
Haron didn't object to the motion, which gives the U.S. Attorney's Office until July 15 to "determine whether to intervene." The U.S. Attorney's Office said the amended complaint contains new "factual allegations."
"The United States has a responsibility to investigate the case and make a determination that it will either elect to intervene in the action and prosecute it or decline to intervene, in which case the private plaintiff may prosecute the action on his or her own," the U.S. Attorney's Office wrote in the filing.
Karadsheh filed the suit under the qui tam provisions of the federal False Claims Act and the Michigan Medicaid False Claims Act, which assist the government in recovering millions of dollars fraudulently obtained through Medicare and Medicaid reimbursement programs, according to a statement issued by Haron last year. The acts also allow private individuals with knowledge of fraud against the government to file lawsuits on the government’s behalf.
Fata's Rochester Hills clinic was raided on Aug. 6, 2013, as a result of information provided by Karadsheh that alleged Fata was engaged in Medicare fraud, according to Haron. Karadsheh, a non-physician, was employed at Fata’s Michigan Hematology-Oncology P.C.
According to Haron, Karadsheh first learned of defendants’ fraudulent conduct when several of Fata’s employees approached him with their fears. After Karadsheh realized no one planned to report Fata, he notified the government. He was subsequently terminated from MHO on Aug. 7, 2013, according to Haron, because he believed the Fatas suspected his involvement with authorities.
Between August 2007 and July 2013, Fata submitted nearly $225 million in claims to Medicare and also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care, according to Haron.
Toward the end of July, U.S. Assistant Prosecutor Catherine Dick said about $13 million to $14 million of the agreed-upon $17.6 million Fata owes had been recovered. She said the office was continuing to work to close the gap with his assets and that patient-victims and their families were first priority for compensation, then private insurers, then Medicare.
Fata is appealing his 45-year prison sentence.
"Besides what Fata did and what he did to the poor patients he imposed his evil ways on, George is really the hero," Haron said. "He stepped forward and shut Fata down. I've been handling these cases since 1993 and we’ve had a lot of whistle-blowers. ... I don’t think there's ever been a more horrific person than Dr. Fata. He is pure evil."
Contact Katrease Stafford: kstafford@freepress.com