Seeing Red

After years of taking it on the chin, Bob Goeggel struck back at his competitor. Thanks to his accusations of fraud, the state's largest ambulance company is on the operating table and the feds are doing the cutting.

At both meetings, Salvati apparently was an unwitting source — never knowing that he was providing information that would help solidify a federal case against his former employer. Though Salvati, who now runs a Clayton-based company called High Performance Solutions Inc., had a lot to tell Hubbard about Abbott Ambulance three years ago, he doesn't have much to say about the subject these days. "I'm not interested in talking about that," Salvati told us, before hanging up the telephone.

For Goeggel's legal team, Salvati was a huge break. "He basically walked through Abbott's fraudulent scheme with the investigator," Sprung says. "That was really compelling evidence for us, so we went into overdrive and tried to put together the information as quickly and as carefully as we could for the government."

Salvati provided two key elements to help make Goeggel's case: confirmation of the types of Medicare fraud that Goeggel had gathered evidence of and, more important, evidence that Abbott officials knew what they were doing. "When you have an insider come forward, especially a senior officer, and say, "Yes, we did this all deliberately,' that is really important evidence," Sprung says.

"Mr. Salvati stated that the hospitals and Abbott knew that billing Medicare for this transportation was against the law, discussed that it was against the law, and 'did not ... care.'" - from Bob Goeggel's lawsuit
"Mr. Salvati stated that the hospitals and Abbott knew that billing Medicare for this transportation was against the law, discussed that it was against the law, and 'did not ... care.'" - from Bob Goeggel's lawsuit

Sprung insists that Salvati's evidence — outlined in an affidavit Hubbard provided the U.S. attorney's office and also on tape from the second meeting — is credible because of its specificity: "He gave us so much specific information, it was unlikely he was just making it up."

Dougherty describes Salvati as a disgruntled employee who "threatened to ruin me when Abbott terminated him four years ago."

"Until his termination in 1995, Mr. Salvati was a key Abbott executive with primary responsibility for establishing Abbott's compliance with Medicare regulations. I relied totally on Mr. Salvati to guide Abbott through the complex maze of confusing Medicare regulations," Dougherty says in his written responses to us.

Sprung, however, says Salvati "didn't try to denigrate or badmouth Abbott, and he didn't express a desire to grind an ax."

Nov. 8, 1996, was a typical day in St. Louis. The city mayor, under political pressure, fired a top aide. Authorities recovered a body from the Missouri River. Attorney-activist Eric Vickers called on the government to block NationsBank's takeover of Boatmen's.

And Bob Goeggel's St. Louis lawyer, John J. Carey, went to federal court.

Under the False Claims Act, the whistle-blower's lawsuit is initially sealed — hidden from public view — for 60 days so that the federal government has an opportunity to investigate the allegations. Typically, the U.S. attorney's office gets the federal judge to extend the seal as the investigation proceeds, and the defendants don't learn about the whistle-blower action until the federal prosecutors decide whether to join the action.

In this case, Abbott first found out something was going on after the company was served in May 1998 with subpoenas seeking records.

Things began to happen within months of Abbott's learning of the investigation and while the case was still under seal. In August, Terry Dougherty announced his retirement — something he says he had planned "for several years." And the U.S. attorney's office began settlement talks with Abbott.

The settlement talks did not include Goeggel or his attorneys, and when they learned of the discussions this spring, they asked Chief U.S. District Judge Jean C. Hamilton to unseal their client's complaint and order that the government allow Goeggel and his attorneys to be present during any settlement discussions.

Federal prosecutors opposed making the complaint public. A May 3 filing, prepared by Assistant U.S. Attorney Claire M. Schenk, described the settlement talks with the corporate defendants — Abbott, Barnes-Jewish and SLU — as "active and virtually continuous." Additional meetings, Schenk advised Hamilton, would "determine whether or not it will be necessary for the United States to undertake further document production as well as a more detailed and extensive review of the documents which have been produced."

Schenk tells us that it's "not unusual" for the government to pursue a settlement before a lawsuit is ever filed. "If litigation can be avoided and the parties can come to agreement on the terms and a monetary amount, that's the goal," Schenk says. "If one can avoid committing the time and expense that goes along with the litigation, and if the parties can come to a mutually satisfactory resolution, that's what we hope to do."

The government, Schenk says, planned to bring Goeggel and his lawyers into the discussions before reaching any agreement. "I think it's a strategy call as to who is in the room at what point in time," Schenk says. "But certainly (Goeggel) would be included at a critical juncture, or critical point, where he needed to be included."

Schenk's boss, U.S. Attorney Edward L. Dowd Jr., couldn't talk about the case, according to spokeswoman Jan Diltz, because he wasn't involved in it. "Ed can't really talk to you about this case; he's recused from it. He's completely recused," Diltz says. "We never really say particularly why. He may have represented somebody when he was in private practice, or just somebody in the company. If there's any indication that there could be a conflict, he has to be recused.... It's an internal thing within the department, where he says, "I really, because of a possible conflict of interest, can't be involved in this case.'"

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