Qui Tam

Whistleblower is accused of masterminding fraudulent scheme

By Brian F. LaBovick

One whistleblower and his lawyers are fighting for a $2.8 million share of a $10.5 million quitam settlement by Cell Therapeutics. According to the government, James Marchese, the whistleblower, was the "initiator or planner of the fraudulent scheme, according to Barry Meir's article in the New York Times. 

I would like to pose a question:  If you help create a fraudulent scheme for a company that allows them to make money under false pretenses, should you be allowed to receive an award for turning the company in?

Personally,  I think the answer should be a simple one. However, in this case with James  Marchese, there are a lot of circumstances that make the answer questionable. According to James Marchese, the government, would never have been able to build a case, without him. He provided detailed documentation that only an insider could have given the government. However, we can't ignore the little detail, of when Mr. Marchese reported the fraud.  According to reports in the New York Times, Cell Therapeutics fired Mr. Marchese in 2002 for allegedly arranging kickbacks to drug wholesalers, which happens to be the same year, he informed the FDA about the promotion of a drug for unapproved therapies. It is important to note that Mr. Marchese denies any wrongdoing. Could this be a smear tactic by the company to discredit the whistleblower? We will never know.

I can see this case being the foundation story for a best selling legal novel, by one of my favorite authors, John Grisham.  Here is my take on what a legal best selling story bases on this case would sound like. Whistleblower comes forward, reports fraud of large company. Whistleblower, conveniently leaves out details of any wrong doing, goes on to destroy any incriminating documents with the help of a lover. Shares all of the dirty little secrets with lover as to their part in the scheme that was not divulged to the authorities. In an effort to try their hand at writing fiction, pens a manuscript loosely based on the events of their case. Shares manuscript with lover to edit and give feedback.  As time passes, whistleblower and lover have a dispute, which leads to a nasty breakup. Lover marches into the authorities with detailed accounts of this fictional script and pours out all of the whistleblowers dirty little secrets.  Authorities have a change of heart about the whistleblower and decides that they deserve no parts of the reward, because they hid important information, their involvement of masterminding a larger scheme, they conveniently left out when they turned their employer in for fraud.  After authorities settle case against corporate giant, they tell the whistleblower that they will not receive the multi-million dollar reward. They fight it out in court.   You have to buy the book to see how the ending turns out.

Now we turn back to the events of the real case at hand, James Marchese and the Government fighting over how much money he should receive, if any at all for his contribution in the quitam case against Cell Therapeutics. The case go to court later this month. 

All eyes will be on Seattle to see how the case is resolved.  Maybe this will give a glimpse on the ending of the above mentioned legal novel.  Stay tuned... 

Full post as published by Whistleblower Law Blog on November 08, 2007 (boomark / email).