Chris Riedel on The Writers Hour - Creative Conversations with Janine Bolon

Chris Riedel – Blood Money24 min read

Janine: Hello, and welcome to The Writers’ Hour: Creative Conversations with Janine Bolon. Today’s guest is Chris Riedel, who has spent the past 40 years in the healthcare industry, and more recently as one of the leading Healthcare Fraud Fighters. He founded and served as the CEO of 5 healthcare companies: Hunter Heart, Hunter Laboratories, Meris Laboratories, MicroScan, and Micro Media Systems. In May of 1992, Meris was ranked as Business Week’s 40th best small company in America. Chris has also served as the Managing Director for Providence Capital, a boutique kind of New York investment bank. And, he is also the Chairman of Chi Laboratory Systems, the pre-eminent hospital and commercial laboratory consulting firm in the US, and as a member of the Board of Directors of Boston Heart Lab. Currently, he is a member of the Business Executives for National Security. Now, that is a very interesting bio, right? This is a guy who knows his way around. But, let me just tell you. The next paragraph of his introduction is where Mr. Riedel gets super cool in my book. For the past decade, Chris has concentrated his effort on fraud-fighting against medical laboratories that are defrauding American taxpayers and the medical industry. This is the subject of his latest book, “Blood Money.” One of his proudest accomplishments came when he received the Taxpayers Against Fraud Whistleblower of the Year Award in 2011. Why? It was because he assisted in the recovery of $286 million from Quest and LabCorp, which he undertook on the behalf of the California taxpayers. Another accomplishment, because he needed to add yet another accomplishment to this man’s amazing career, he had developed and received FDA new drug approval for a more precise way to identify bacteria-causing disease in which antibiotics and dosage levels would be most effective in treatment. This is a product that has saved many lives around the world. He is a longtime resident of Silicon Valley. Chris makes his home there with his wife, Marcia, and 4 sons for whom he served as soccer and basketball coach for years. He enjoys international travel. So yeah, you want this guy to come to speak at your gig. I definitely want you to do that. And, he is also an avid Bay Area sports fan. Chris, thanks so much for being with us today.

Chris: Thank you, Jane. Let me make one correction though. My wife pronounces her name Marcia.

Janine: Marcia, thank you. Hey, I love it when people correct me on names because that needs to happen. Thank you. Okay. Starting off with today, what I wanted to talk a little bit about was, not only has Chris had an amazing career but you also wrote this book called Blood Money, which by the way, you gave me a PDF file. I read through it. I am like, “Oh, my gosh! This is a real-life, adventure, mystery story.” And, he also has a “How To” section in it on “How to be Your Own Whistleblower in your Own Fields.” So, talk to us a little bit about, number 1, why? Why write this book when you are naming names on this thing?

Chris: Jane, I wanted to. There were 3 reasons I wanted to write this book. First, I wanted to write a true thriller of what I went through. So, that people would understand that whistleblowers, it is a hard, hard road. Generally, they are destroyed by the companies they are suing when the companies find out who they are. Most of them end up unemployed, bankrupt, and divorced. We certainly were attacked, or I certainly was attacked when Quest and LabCorp found out that I was behind the fiasco. And I thought it would just make for a good thriller. Secondly, I wanted to write the rule for whistleblowers. If anybody’s contemplating doing this, I layout the chances of success are less than those who do this by lightning, your life will never be the same. You are going to be attacked. But, there are things you can do to prepare yourself. Almost all the whistleblower, in fact, every significant whistleblower I have met did not do for the money. They found it wrong. They found the fraud that was costing taxpayers a lot of money, and they just could not stand it. In my case, what I found was a fraud in the medical laboratory industry, where these companies were stealing hundreds of millions of dollars from the California Medicaid program. And as a new laboratory, we could not compete with the way they did the fraud. They were getting below-cost pricing for a small amount of business to doctors so they could pull through the higher Medicare and Medicaid insurance. But in California, and other states, the Medicaid program is entitled to the lowest charge, and that is where the fraud occurred. They did not pass it along to those states. And the fraud also occurred, because giving below-cost pricing to use the pull-through, is a kickback. My choice for my company was either knowingly violate State and Federal law, which I am not going to do, lay off a hundred and fifty great employees, close our business and write off most of our life savings. Or lastly, try to do something to stop the fraudulent behavior, and level the playing field around this laboratory. The only way to do that, it turned out was to follow a whistleblower lawsuit.

Janine: And that is when your life truly got interesting. First of all, you find a problem, you find this challenge where things are being sold at below cost. That is basically not fighting fair, to begin with. I know people say that “all is fair in love and war,” but when it comes to a capitalistic society, we kind of have this rose-colored glasses of an ideal of, “Hey, at least do not sell us below-cost because then how do we have healthy competition?” Which you were seeing going right down the tubes that not happening. And, the other thing that I found very significant was just the hundreds of millions of dollars that this was involving for taxpayers. As somebody who works hard for their money, I want to make sure that my government or the systems are at least helping the people I think they are trying to help. So, what are some of the steps that you took? What were some of the first steps of “Okay, my company cannot compete? Oh, my gosh! I have stumbled upon this fraud.” What were your next steps after that?

Chris: The first thing I did was call on Regulatory Commission to find out if that is legal? They answer with no, they are not. Then, I contacted my longtime personal attorney [inaudible]. And I said, “What am I going to do to stop it?” After a couple of months, he was probably in his office. He said, “I never heard of a [inaudible] whistleblower in action.” And he explained it to me. What that is, is it was started during Civil War, with the Lincoln, because there is so much fraud against the civilian[?] army. With the culture under Reagan, and again, with Obama under [inaudible]. And it allows a private individual to sue a company on behalf of the government for the fraud. We drafted a complaint, and we filed it in the State of California. And then, we are already set for a few months. Eventually, the government contacts you and interviews you, and the whole thing is understood. But the defendants do not know that there is a lawsuit filed and we did not talk about it to anybody. The government generally spends years investigating whether they think the fraud is worthwhile or not. In our case, it took 4 years before the government decided, “Yes, this is great.” And then, they quote interview, they finally see it, and they prosecute. And then, it took about over a year or so. But, in many of the other cases I have, the government decided not to do [inaudible]. We are actually delighted when they do not. And the reason is, now we are going to have really good lawyers prosecuting this case for the State that is understandable. And we know what is going on because in the government… In California, they work with [inaudible] that was a wonderful experience. But in many other States and with the federal government they have no clue what is going on.

Janine: And that is one of the things. It is when it is literally cloak and dagger. When I was reading through some of the stuff I am like, “Oh my god! This is almost like a Spy Novel.” Because there was so much that you did not know. And then, as you said, “Once you were able to move it into the private sector and you moved it out from underneath the auspices of the government, then you could really get some action plans going. Then, things became clear as far as the next steps.” That sort of thing. With all that, and I do not want to spoil it. I do not want to spoil the ending for people with this amazing book “Blood Money.” But, what changes do you feel need to happen in the medical lab space? I mean, in the 2020s, for fraud to be reduced, the taxpayer, we do not want to be ripped off. So, what are some of the quality tests that rise to level say Hunter was providing? I mean, what kind of perfect day do you have in your eyes for what the medical lab space needs to do?

Chris: I think it is quite [inaudible]. Medical lab, another health care company need to know, if they are going to steal money from taxpayers, they are going to go to jail. That has not been the case. Unfortunately, the Department of Justice is all looking. Nobody’s going to jail. Nobody’s lost their dollars. Nobody got fired. The shareholders end up paying fine, at anywhere from 5 to 20 [inaudible] dollars. So, fraud is [inaudible]. It is a great risk-reward for fraudsters. Until DOJ changes their attitude about affordable civil settlements [inaudible]. And my last chapter in the book, I give nine simple suggestions for what DOJ can do that would changes stuff from using pistols to fighting fraud with tanks.

Janine: Right? We would all like to have that because a lot of times people just do not know how profitable fraud is for some of the large corporations that are involved in it. When you do have whistleblowers come through, they almost have to defend their life to a picture-perfect level before anybody will listen to them and bring it home to RooStuff[?]. Do you want to know why health care is so expensive? Look at where this fraud is. In your case, it is in the health care industry. We have seen it in other industries, but we will focus on healthcare for right now. And one of those things is when you see just how much money is being made or is being transferred through hands based on different types of, I say, genres of books, but in disease classes that are being filtered and work through. So, for you, personally speaking, we talked about how fraud is now profitable. People can engage in it if you are in a big corporation and you are not worried about going to jail. For you, personally speaking, how fulfilling has this work been for you?

Chris: On the one hand, [inaudible]. I enjoyed playing the role of a private eye.

Janine: [laughter]

Chris: You have to dig up nonpublic information. I had to learn some new skills and I really, really enjoyed them. On the other hand, with the Federalists, that DOJ and the [inaudible] and there is nothing I could do about it.

Janine: And that is incredibly infuriating. When you see injustice being done, innocent people being harmed without even their knowledge of it, really. And yet, there is not a thing you can do. I have been in situations like that. It is just like, sometimes you just have to walk away. But you had two attorneys who were more than willing to help you go to bat and do you want to talk a little bit about them, and what you were able to accomplish through their work and service?

Chris: Niall McCarthy and Justin Berger are with a [inaudible] with Cotchett, Pitre & McCarthy. They are wit, smart. They are [inaudible] and they will leave no stone unturned. And as I said, most whistleblower attorneys if the government decides not to do with you, then walk away. Not real[?] justice. That is when they really get excited because now they are free. Their hands were untied, then we can prosecute the [inaudible].

Janine: And that is where it is almost like you could see them start salivating of, “Okay, it is time for us to go after this group.” It was kind of fun to read about that in the book. Not fun for you because as a mom, I have 4 kids, and all that I was thinking, “Wow. This is something that you really have to go toe-to-toe.” And, you were talking about looking up nonpublic information having to literally be your own PI. Do you want to talk a little bit about that?

Chris: Yeah, I found it kind of fascinating. We had to have evidence, direct evidence that companies do not pass on those charges to the Medicaid program, but I did not get that. I happen to be early on in the industry conference and I ran into 2 sales representatives[?] from one of the companies. I have known [inaudible] introductory and the [inaudible] talk to it, and by the way, it is very cheap, like a very cheap charge. Are they passed on Medicaid programs? [inaudible]. I said, “Of course they are not passed on Medicaid program.” They make pay sales commissions on.

Janine: Oh my God! Why thank you very much.

Chris: That is one example.

Janine: [laughter]

Chris: Another one was just family. Despite[?] of from Stanford University, got up at that same conference and presented the [inaudible] from Standford on that operation auditory drafting in which he gave slide, by slide, by slide describing that exact boy[?] which he did not know [inaudible]. So, that was exhibit one.

Janine: Wow.

Chris: Because that was serendipity.

Janine: Yes, when you start looking from what you need, and it starts presenting itself to you like you said serendipity. So, we talked about the one when that you were able to get. I know there have been a lot of disappointments as well, do you want to talk a little bit about some of the big disappointments you had when you were in Blood Money?

Chris: Sure. One of them is with a company called [inaudible]. And they were money laundering. They were paying cash doctors for ordering. They never go to a patient. And by never going to patients, they work into the insurance fraud and there was no reason that doctors really ordered these outrageously large panels with unnecessary debt with the patient was never going to pay a bill. So, the government spent 4 years investigating this, and then said, “If we do not like it, we are not going to intervene.” And I am going, “You just prosecuted 4 companies I sued that did exactly the same thing without the money laundering.” “Well, we are not gonna prosecute.” So, we immediately started taking depositions, and after about 4 months, the DOJ calls us and says, “We have a settlement in place.” We go, “What? You do this behind our backs?

Janine: [laughter]

Chris: Without even talking to us?” And the settlement was literally 20 cents and a dollar.

Janine: Wow.

Chris: And, it is crazy, because the statute is so strong. It is treble damages looking [inaudible] plus $20,000 per $50 claim. Your work is humungous. But, the closer you get to trial, the closer that board of directors will authorize any amount of money. Because if they lose, it affects the company thing, and then the shareholders are going to go after the board for allowing it to happen. It is a nightmare. No one’s going to do that. We only have 1 trial, in all my cases.

Janine: And so, how many cases have you gone through?

Chris: It is been about 30 separate cases.

Janine: Wow.

Chris: Many of them were with the same defenders. Like for example, we sued Quest and LabCorp by 8 States. So that counts for 2 separate. That is 16 pieces right here.

Janine: Because you have to go State by State, according to the health care model that we currently have.

Chris: If you are going after Medicaid, you have to go State by State.

Janine: Yeah.

Chris: However, we had such poor experiences in other States, other than California, that we will never file a State case again. We do not want to have to deal with the vagaries of the judges, the State judges, as well as the lack of respect of the State’s Attorney General’s Offices. So, we are going to file Federal cases and made mistakes as additional apprentice[?].

Janine: I understand. So, those were some of the disappointments for you were like, things happen behind your back, you had no control over them, having to go State by State on several of these cases. So, let us wrap things up with some of the big wins that you have had since 2011.

Chris: Sure. The next stage is with a company called Health Diagnostic Lab. These guys, 2 enterprises, and a salesman[?] came up with this great idea. We are going to offer this huge panel of cardiovascular tests. But just before Boston Heart company, are gonna pay doctors a lot of money. Some doctors got half a million dollars a year to order tests. They did not do anything for that money and minority with the patients. They went from nothing to 400 million in 4 years.

Janine: Wow.

Chris: Yeah, exactly. We had a cardiovascular program too, which is why we filed. After 4 years, the company’s entered into settlements with DOJ and properly declared bankruptcy after the settlement in which [inaudible] got nothing.

Janine: [laughter]

Chris: But, they did not sell with 3 of the individuals and they took those individuals to trial. It was fascinating to set through a two-week trial. The government had 17 lawyers there, as many as they had in the Enron case and they won a $114 million judgment. But of course, all individuals pleaded bankruptcy.

Janine: It is crazy. What is crazy it’s better. I often say and this is no offense to my fiction writers that are listening. I love you guys. You keep writing your fiction novels, please because, for me, that is brain candy. But, when they talk about truth is stranger than fiction or reality is stranger than fiction. This is one of those things where you are like, “Honest, I cannot make this stuff up.” That is what I tell people when I am writing my nonfiction. It is like, literally, I could never make up storylines like this in a million years. So, let us talk a little bit about you actually writing the book. When did you decide enough’s enough with all these cases and everything? I need to write this down. Can you kind of talk to us about that process?

Chris: I retired. I sold my last company in 2016. It was then I get thinking about writing a book. I started writing [inaudible]. I write it 3 times. The first time I wrote it took about a year, I sent it out for review in the UK back. This is an excellent investigative journalism story, but it is not a thriller. And, I wanted to write a thriller. Then, hired a ghostwriter and together, we rewrote it. We rewrote it and turned it into a thriller. And then, I sent it to [inaudible] for his review. And he said, “Chris if you publish this book the way it did, the Department of Justice is going to drop every one of our cases. You cannot say these things about individuals within the DOJ, or DOJ itself.”

Janine: [laughter]

Chris: So, I had to rewrite it for the third time.

Janine: [laughter]

Chris: I left in the facts and let the reader draw their own conclusions about the Department of Justice.

Janine: Right, I did notice a lot of DOJ this, DOJ that and you were not naming names at that point. I did notice that change, but at the same time, it did not detract from the quality of the message or the quality of the writing. I just wanted to say thank you for writing your story. Because there are so many people like myself, who absolutely love a good mystery, and even more so, when you have a real-life adventure like this, that is actuality, you have good, you have bad, you have won, you have losses. But in the end, we are making progress. Things are coming to light because of people like you. And so first of all, I just want to say thank you for going toe-to-toe with things that I was an Analytical Biochemist in the pharmaceutical industry. I worked for Glaxo Pharmaceuticals. I worked for Merck Sharp and Dohme. And, I was watching these huge organizations, mitigating risk by becoming larger and larger through a synthesis where they just started buying each other out. What was a competitor, they cut the risk by buying each other, and I saw these huge mega corporations happening, and at the same time, I was just a little chemist trying to make the world a better place one better pill at a time, right? But, I also knew how much money was involved in the healthcare system. It is quite the little juggernaut. So, to see a little David and Goliath story like this, you are always rooting for the underdog on stories like this, so thank you for writing it. You had to write it 3 times, and each time it was because you had to protect the innocent or protect yourself yet again. But you have the chapters on how to be a whistleblower. So, I really would like you to talk about what led you to write that aspect of it because it is almost like at the end where you patch it up on the end.

Chris: Sure. I want people to know, just thinking about this, what they are going to go through. It is not easy and life will never be the same. But there are things you can do to protect yourself. The first one, get another job. Because you cannot be blackballed if you have another job. The second one is to go seek. There is this cottage industry with native funders. They will pay you anywhere from 1 to $5 million. As a non-recourse, basically invested in exchange, they will take a percentage of anything that you make with. But if you do not win, you keep the money. This gives you a financial cushion when the attack starts.

Janine: Right.

Chris: And secondly, if the litigation funder does not think your case has enough merit, you are probably should not go forward. It is going to be too hard of a road hole[?].

Janine: So those are 3 quality pieces of advice. And then, you also talk about some of the attorneys that helped you. So there is always that road that you can walk down and there are people now in place. You were just telling me before we got on to record the show how you were on a Zoom call where you were talking to a bunch of other whistleblowers. So, now there are communities set up to help give you guidance so that you are not walking in blind, like a lot of you folks had to?

Chris: Yes, yes. And they all wish that they had a place to go during the process. I often say to any potential whistleblower or current whistleblower, “You can call me and I will give you the best guidance I can.” You cannot tell me if you could actually file big companies. But, we can talk about the process, and also taxpayers who did fraud would be an excellent source or any current or future whistleblower.

Janine: So to kind of wrap up today’s interview, tell us if you do not mind, say on somebody that is contemplating this, or I have already been through the process, maybe I am one of the whistleblowers that lost? Are there ways or avenues that they can write their story without necessarily naming name because you have a lot of gag suits and gag orders that happen with situations like that? Do you have any recommendations on the healing process that happens when you write your story, how you can almost put it to bed at that point?

Chris: It was tremendously rewarding for me to write the book. It was like unloading so many frustrations and at the same time, sharing information is really going to help people. And, I am a big reader. I love thrillers, you know. I hope people view this as a thriller. Mostly that I talked to so far have just loved it.

Janine: Yeah. I love mysteries. I love thrillers. And so, the fact that I was actually being able to interview the main character of this thriller was very exciting for me as I was running through it. And then, of course, I used to do a lot of work with AIDS, back in the 90s. I was one of those people that was involved in laboratories that were testing samples and stuff like that. Anyhow, you were playing in my backyard, so to speak. Well, Chris, are there any options, or is there any glimmer of hope in the future for you writing yet another, not necessarily a thriller, but writing yet another book after Blood Money?

Chris: Yes, I actually started 1. About a very wealthy physician in Florida who just move and he is actually withholding COVID treatments that work. Because he is trying to get control of his company. So he is trying to drive the price down to a public company. And then, once he gets 50% control, he is continuing to buy it. But then, he is gonna release this life-saving medicine. But as I was doing their research, it quickly became apparent. Anybody that writes a negative press article about him is going to be sued and spend a lot of money.

Janine: [laughter]

Chris: I’d better just [inaudible]. He told me to go down that road.

Janine: [laughter]

Chris: Well, it was a great story.

Janine: Right, so that is one of those that you become a fiction author and you take the pieces of reality and start talking to your ghostwriters again about, “Okay, how do we keep ourselves out of trouble? And we will make this a fiction piece.”

Chris: Well, we were going to do a [crosstalk]

Janine: Nonfiction. Yeah.

Chris: A true story about a very prominent person.

Janine: Yeah. Okay. No, I understand. I understand that. Well, I hope since that one did not pan out. I hope you are open and available and receptive to writing another book on this because this is the area that our country needs a spotlight put on. Our country needs as we move forward with questions regarding health care, and that we keep the spotlight on the shadows. They cannot run and hide if there is a spotlight shining on them. So, thank you for being one of those beacons of hope for us. We really appreciate it.

Chris: My pleasure. I enjoyed our conversation.

Janine: So, this is Janine Bolon with The Writers Hour Creative Conversations, and we were talking to Chris Riedel about his latest book, Blood Money. If you have any interest in thrillers, this is a real-life situation, and in the back of it, and in other sections of it, actually how to be your own whistleblower if you feel that you were in a situation that deserves that kind of attention. So thank you so much for listening to the show. We will see you next week.