Violence. Verbal abuse. Embarrassing rumors.
They're not hallmarks of most healthcare fraud cases, but were among the allegations in an Arizona case in which a federal jury recently awarded a former healthcare staffing company co-owner $27.6 million.
Marc Wichansky, a former president of healthcare staffing company Zoel Holding Co. of Phoenix, alleged in the suit that his former co-owner, David Zowine, led a campaign to oust him after he alleged the company's medical billings led to false claims.
Attempts to reach Zowine and his attorneys for comment were not immediately successful Thursday. But in court documents, Zowine disputed Wichansky's allegations and said Wichansky alleged fraud only after Zowine decided to buy his partner's interest in the company.
In the case, each man essentially said the other was out to get him.
Wichansky alleged that a Zoel subsidiary, MGA Home Healthcare, illegally billed the government and government payers. MGA Home Healthcare ultimately self-reported the issue to the Arizona Medicaid agency and settled for $1.25 million in 2013.
As part of that agreement, MGA admitted to making billing errors but not to the extent alleged by the agency. The settlement also said that the state agency found no evidence of fraud or wrongdoing. Wichansky disagreed with that contention.
Wichansky alleged that Zowine tried to suppress an internal investigation over the billing questions and push him out of the company. He said Zowine grabbed him by the neck at one point, threw him across a room and punched him. Wichansky alleged that Zowine told employees that he was engaged in tax fraud and had a drug problem.
He also alleged that Zowine and others stole and accessed Zoel's server and computers and set up a secret satellite office.
Zowine, however, said it was Wichansky who tried to fire him. When an Arizona state court said Wichansky lacked the authority to do that, Wichansky then filed a petition to dissolve the company, Zowine said. The state court allowed Zowine to purchase Wichansky's shares in the company rather than see it dissolved.
Wichansky claimed in this latest federal lawsuit that he sustained damages as a result of that sale and that Zowine misrepresented financial information to the court.
The federal jury found this month that Zowine breached his fiduciary duty as an officer and shareholder to Wichansky. The jury also found that Zowine assaulted and battered Wichansky.
Prior to the jury verdict, the judge dismissed Wichansky's claims that Zowine retaliated against him as a False Claims Act whistle-blower, committed computer fraud and abuse by accessing the company's computers without authorization and committed securities fraud.
“When someone comes forward and attempts to blow the whistle, it's easy to make that person look bad,” said Sean Callagy, an attorney for Wichansky.
Callagy said that the Arizona Medicaid agency's investigation into the fraud Wichansky alleged wasn't thorough and that the previous settlement didn't go far enough.
Had the investigation been more thorough, Wichansky “wouldn't have had to go through a lot of the things he's gone through,” Callagy said.
“I think this speaks largely about how easy it is to get away with things related to medical billing in terms of state and federal payers,” Callagy said.
The company has since been renamed Zoe Holding Co. Before the dispute erupted in 2011, it had gross revenues of more than $40 million, offices in five states and hundreds of hospital clients, Callagy said.