Medical Mafia Story Hits the National News

Fortune magazine (link available here) has scooped up the medical mafia story. And once again, Vegas looks like the most corrupt legal and medical jurisdiction in the country. Well done boys.

Fortune does an excellent job of laying out all the details of the sordid tale of [allegedly] crooked Vegas doctors and lawyers colluding to pad their pockets/settlements. For those of you that haven't been following the reporting on the trial and now appeal of Noel Gage and Howard Awand [pictured left] (older posts available here), the piece offers a great primer on the [allegedly] criminal scheme.

The piece explains how the [alleged] conspiracy only came to light when medical consultant Howard Awand drove up medical bills for a plaintiff (represented by Bob Vannah) suing a driver who happened to be a U.S. Attorney on government business at the time of the accident. Here's a few of the more interesting pgphs:

Prosecutors charge that a group of top Las Vegas plaintiffs lawyers and doctors,
with the 64-year-old [medical consultant Howard] Awand at its center, conspired
in an audacious fraud. The participants appeared to act independently but
instead colluded. Unwitting accident victims were recruited as plaintiffs and
then persuaded to undergo serious, sometimes needless, surgeries. The
procedures, in turn, helped inflate the size of personal-injury claims. The
result was multimillion-dollar insurance settlements, even for dubious cases,
and lucrative fees for the doctors, the lawyers, and, of course, Howard Awand.

Predictably, Awand's attorney paints the medical consultant as a champion of the people:

What the government paints as "collusion," Harland Braun says, was nothing more
than cooperation among professionals. Because Awand was beating the insurance
industry in court, the government concluded "it must be a conspiracy," says
Braun. "What Awand did is level the playing field."

But don't think the government's case only implicates Gage and Awand (and Vannah on the sidelines). This is Nevada, after all. Why not throw some Nevada District Court judges into the mix along with other members of the bar:

One month after Cynthia Johnson's accident [the plaintiff in the case that broke
open the alleged conspiracy], Howard Awand threw open his sprawling lakefront
home in Big Bear, Calif., to Las Vegas' A-list professionals. Kabins and Vannah,
the doctor and the lawyer in the Johnson case, were there, along with 200 other
top doctors, lawyers, judges, and their spouses and kids. The event, including a
buffet dinner of filet mignon and lobster, was a fundraiser for two Las Vegas
judges who faced reelection; some $30,000 in checks piled up in two crystal
bowls, several partygoers recall.

How influential was Awand in Vegas personal injury law:

By 2002, insurance defense lawyers were so concerned they held an unusual
meeting. More than a dozen attorneys for competing insurers met to compare
notes. Some who had subpoenaed Awand described getting threatening calls from
his associates warning that their business would dry up if they didn't back
down, William Turner of Farmers Insurance recalls. The lawyers, he says,
recounted tales of strange behavior or even intimidation. Expert witnesses, for
example, suddenly and inexplicably changed their testimony; some doctors who
refused to cooperate with Awand had been threatened with frivolous malpractice
lawsuits. By meeting's end, the lawyers felt certain they were facing something
bigger and more sinister than garden-variety fraud.

The piece also lays out how pervasive the scheme was to have personal injury plaintiffs have unnecessary surgeries. Mark Kabins (being prosecuted in a separate trial) started taking referrals from Howard Awand and started making $750,000 a month.

By 2000, Kabins's practice had become a factory producing multimillion-dollar
insurance settlements, according to witness statements and interviews. The
volume was so great that Awand himself couldn't keep track. In June 2002 he
wrote to Kabins, asking him to create a list of all the clients he'd sent: "We
are reaching critical mass and both of us are losing money by my failure to keep
up with the referrals" . . . Kabins became so infamous that insurance
investigators coined a term -- a "Kabinsectomy" -- for a needless surgery in Vegas.

[story continued in next post]