AHF Seeks Expedited Discovery in Suit Against Whistleblowers

May 11, 2015 3:23 PM PST

MIAMI — The AIDS Healthcare Foundation on Friday filed a motion to permit expedited discovery in a suit against three former executives who charged in a federal whistleblower claim that the organization defrauded public programs in California and Florida of at least $20 million a year in false claims.

Shortly after the former execs filed their whistleblower lawsuit last month, the AHF waged a suit of its own, charging that the execs used wrongfully obtained “highly-sensitive, confidential and HIPAA-protected information” as leverage to commence litigation.

The AHF is seeking a restraining order over the former execs’ continued possession of the data, saying that it represents "significant harm to the AHF an its patients," and now has asked a federal court in Miami to expedite the discovery phase of the suit.

“Time is of the essence, in light of the highly-sensitive nature of the documents and information currently in the hands of defendants and third parties unknown to AHF,” AHF attorneys said in a brief to the court on Friday.

“Because defendants have largely rebuffed AHF’s repeated efforts to resolve this issue informally, and refuse to identify what confidential documents and information they possess or when and by what means it has been disseminated (among other topics), AHF respectfully requests that the court issue an order permitting limited expedited discovery so that AHF may explore these topics and thereby assess what remedial measures may be taken to prevent further harm to AHF and its patients."

The former execs’ whistleblower suit alleged that the AHF defrauded federal healthcare programs such as Medicare, Medicaid and Health and Human Services HIV/AIDS grant programs by unlawfully paying referral incentives to employees and patients in violation of an anti-kickback statute.

AHF President Michael Weinstein was alleged to have directed the group’s staff to put in play a nationwide patient financial incentive of $50 for them to take part in medical care, according to the whistleblower suit. Employees, the suit said, received $100.

Former managers Jack Carrel of Louisiana, Mauricio Ferrer of Florida and Shawn Loftis of New York allege that the scam began in California in 2010 and spread east to Florida.

The AHF’s suit against the former executives also fingers and names as defendants three law firms handling their end of the litigation — Cohen Milstein Sellers & Toll, Salpeter Gitkin and the Kaiser Law Firm, and Theodore Leopold, an attorney with Cohen Milstein.  

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