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In the swirl of international publicity attending the sentencing of oncologist Dr. Farid Fata on insurance fraud, one key player in the corrupt doctor’s downfall remained off camera.

Even as U.S. Attorney Barbara McQuade publicly thanked the government’s two whistle-blowers, Dr. Soe Maunglay and George Karadsheh, few understood the role Karadsheh played — or how perfectly he was cast.

As the practice manager at Michigan Hematology Oncology Inc., Fata’s network of clinics, Karadsheh was the staff go-to guy, doing everything from coordinating physician recruitment to ordering supplies.

But he also possessed an extraordinary expertise that ultimately saved lives: George Karadsheh had been a federal whistle-blower before.

In the panic-stricken, last days of Michigan Hematology Oncology, after Maunglay, an oncologist in the practice, discovered that one of Fata’s patients was receiving chemotherapy but didn’t have cancer, he reported his findings to Karadsheh. And Karadsheh knew exactly whom to call.

The 55-year-old former journalist already had a client relationship with David Haron, a Franklin attorney who specializes in whistle-blower law. On Aug. 2, 2013, Karadsheh called the FBI. By Aug. 6, Fata was in jail.

But for almost two years, the former practice manager was essentially gagged, unable to speak about the investigation or his part in it without risking his financial stake in the outcome. When he filed a lawsuit under the False Claims Act on Aug. 5, 2013, the so-called qui tam civil lawsuit joining Karadsheh and the government as co-plaintiffs — he triggered a legal process. As obscure as it is to lawyers and laypeople alike, Karadsheh understood precisely how useful it could be, when he needed it to be.

That step — secret, technical, requiring a knowledgeable lawyer — entitles Karadsheh to a significant financial reward that could amount to $3 million or more. It almost surely enabled the government to act swiftly, even as it silenced Karadsheh.

The 16-page lawsuit was immediately sealed and kept off the court website until June 10. And Karadsheh kept quiet, feigning indifference when former employees approached him or, later, when reporters did. Maunglay, the oncologist at the clinic whose story was told on June 11 in The Detroit News, was frantically trying to prove Fata’s deceit and fraud when he reported some of his findings to Karadsheh in two meetings. But Karadsheh never confirmed to any of his co-workers at the clinic that he had filed the whistle-blower suit.

“While everything in my being wanted to tell this story and there was a story to be told and lessons learned, my hands were tied ... because of a court order,” he explained in a follow-up email to an interview with The News.

Government whistle-blower laws, including the False Claims Act used in this case, create a path for private citizens to help the government. The law requires secrecy for two reasons: to protect the government’s investigation, and to protect the whistle-blower from retaliation and from contest to a financial stake in the outcome.

“Whoever gives the government the information first is entitled to a large financial reward,” said Stephen M. Kohn, a Washington, D.C.-based lawyer and author of “The Whistleblower’s Handbook.” “But you have to have strong proof of wrongdoing.”

Other doctors and nurses had likely left Fata’s practice when they questioned his practices. Angela Swantek, a well-intentioned oncology nurse who walked out of a 2010 job interview at Fata’s clinic, tried to alert state officials — but her complaint fell through the cracks. She had never heard of the False Claims Act, she says.

In the Fata case, where the convicted doctor has surrendered more than $10 million to the government, Karadsheh’s share of 15-30 percent is at least $1.5 million.

The reward system gives employees a powerful incentive to report fraud. But partly because few have more than a hazy understanding of the law and its requirements, it’s still rarely used. The reward is rarely the sole motivation, experts say. The reward is taxable; lawyers typically get 20 to 30 percent; and whistle-blowers typically lose their jobs.

In a bizarre coincidence, Karadsheh had once before used the law to stop Medicare fraud. As a technician at Harper Hospital’s sleep clinic in 1991, he was asked by a supervisor to bill patients for unnecessary testing, using a process that cost insurers as much as 10 times what it should have. Karadsheh quit his job (he worked there only two weeks, he says) and reported the billing fraud to Blue Cross Blue Shield of Michigan.

Nothing happened.

Ignorant of whistle-blower laws, he moved on with his life. Almost two years passed before he was contacted by the FBI, and encouraged to file a whistle-blower lawsuit to protect himself.

Worried about his then-current job, he researched the False Claims Act in the Detroit Public Library, and learned about Haron, the qui tam lawyer. He saw the process work: It stopped the fraud and paid him about $30,000 and court and other costs. More important than the money, he says, was taking pride in his action. “I learned that some things are just more important than a job.”

Oncologist Maunglay was trying to prove Fata’s deceit and fraud when he reported his findings to Karadsheh in two July 2013 meetings. Although he and Karadsheh dispute some details of their meetings, they agree that Karadsheh called in the FBI.

After a nurse told Karadsheh that massive overuse of some therapies were “the tip of the iceberg,” Karadsheh says, “I realized this is a bigger fire than I usually put out.”

“Fortunately,” says Haron, the attorney who specializes in whistle-blower law, “George knew what to do.”

Regulators are overwhelmed by the sheer volume of wrongdoing, but don’t necessarily know what to do when they’re called by an employee, either.

“Usually the government doesn’t have a clue,” said Patrick Burns, co-executive director of Taxpayers Against Fraud, a Washington, D.C.-based nonprofit. “It wouldn’t know fraud if it walked in the door standing up. What the government needs is a Yoda to guide (it) into the strange world. That guide is the whistle-blower.”

“I can give you the numbing numbers behind being a False Claims Act plaintiff,” said Burns. “There’s an 80 percent chance your case will crash and burn. There’s a 1 in 2 chance your case will be settled for $3 million or less. And a 100 percent chance you’ll be fired from your job.”

But he says — and Karadsheh concurs — that using this legal tool is the best way to report fraud in regulated industries, including banking, securities and medicine.

“I knew I was doing the right thing,” Karadsheh says. “But that didn’t mean there weren’t huge risks.” He believes others must have known of Fata’s fraud but likely left the practice, uncertain how to proceed. If they’d understood how to file a whistle-blower lawsuit, “it would have stopped Fata in his tracks long ago. ”

Over two years, he couldn’t share his situation. When he recognized a store cashier as a former patient, he was delighted to see her looking healthy, even rosy-cheeked. She returned his smile with a contemptuous stare, a look he won’t forget. Even so, he said in an email, “I left with the feeling of pride in my accomplishment that she was alive and well.”

In the Fata case, Burns credits the lawsuit and the credibility of Karadsheh’s lawyer with enabling U.S. Attorney Barbara McQuade to accelerate the case “with the speed of a war powers act.” Fata was arrested and jailed only five days after Karadsheh’s call to the FBI.

“Barbara McQuade is the real hero,” says Karadsheh.

Both Maunglay and Karadsheh say that Karadsheh’s past experience reporting health care fraud was invaluable. “He did a great service,” says Maunglay, who warned a patient, Monica Flagg, to find another doctor, then worked with nurses to uncover the extent of Fata’s fraud, before meeting with Karadsheh and, later, the FBI. Maunglay, who didn’t file a lawsuit, is not eligible for any financial reward.

Fata, the cancer doctor who employed both men, was sentenced to 45 years in prison after 22 patient victims described their suffering in emotional, sometimes horrifying, detail. Survivors, victims and their families will likely never fully recover from the psychological and physical scars of their experience.

But the court case won’t end until Fata’s assets, some still being sold and tallied, are divided and parsed, a process that will continue at a future restitution hearing. Until then, Karadsheh, the whistle-blower of record, takes satisfaction in having taken action. Like someone who knows how to perform CPR in a life-threatening emergency, he saved lives by reporting fraud — and knowing how.

lberman@detroitnews.com

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