Mitt Romney Supervised Medical Testing Company Guilty Of Massive Medicare Fraud
In 1989, Bain Capital purchased controlling interest in Damon Corp., a medical testing company located in Needham, Massachusetts.
During the time that Bain held its ownership of the company, Mitt Romney personally sat on the Board of Directors. And during that same period, Damon Corp. was busy submitting fraudulent reimbursement claims to Medicare to the tune of millions of dollars charged for unnecessary blood tests.
According to federal government prosecutors, Damon was misleading physicians into ordering unnecessary blood tests, assuring the doctors that the testing would be covered by Medicare.
By the time Damon Corp. pleaded guilty to defrauding the United States Government of $25 million—and paid a total of $119 million in what was, at that time, the largest penalty of its kind in Massachusetts history—Bain was long gone having sold the company in 1993 to Corning, Inc.
Inasmuch as neither Romney nor Bain was ever implicated in the fraud, it would be reasonable to conclude that while the illegal activity was going on under Mr. Romney’s nose, Romney would, himself, bear only some responsibility for perhaps not being as on top of things as one might hope for a company’s director to be.
But, according to Romney, such a conclusion would be wrong.
When Mitt Romney was confronted with the matter during his campaign to become the Governor of Massachusetts, Romney acknowledged that he did have some awareness of the funky things going on at Damon.
According to The Deseret News–
More than a decade later, when Romney was in pursuit of the Massachusetts governorship, his Democratic opponent Shannon O’Brien accused him of lax oversight at Damon and failing to report the fraud.
Romney replied that he had helped uncover the illegal activity at Damon, asking the board’s lawyers to investigate. As a result, he said, the board took “corrective action” before selling the company in 1993 to Corning Inc.
So, then, the future Governor and candidate for his party’s nomination to run for the presidency, did fulfill his obligation as a great American and did report the fraud to the proper authorities, right?
According to the court records, “…the Damon executives’ scheme continued throughout Bain’s ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation.”
But there is an explanation – it turns out that the Damon experience was a foreshadowing of the Mitt Romney to come as he engaged in one of his now infamous episodes of flip-flopping.
You see, before Romney indicated that he was involved in conducting an investigation while he was on the board of directors, he said that he was completely unaware of any investigation.
Here’s another shocker. While the company eventually went bankrupt, with thousands losing their jobs, Bain Capital walked away with a $12 million profit—a little over $400,000 of that money ending up in Mitt’s pocket.
Expect to hear a lot more about this in the coming days as AFSCME has spent close to one million dollars in advertising buys throughout the state of Florida to highlight this misadventure.
By: Rick Ungar, Contributing Writer, Forbes, (Originally published, January 21, 2012).
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