WHISTLEBLOWING HAS ITS REWARDS. During 2011, one laboratory whistleblower not only harvested tens of millions of dollars in settlement awards, but he was recently honored by a national group for these same efforts.
Chris Riedel, President of Hunter Laboratories, Inc., in Campbell, California, was recognized last month for his actions associated with the whistleblower lawsuit he filed in California that resulted in sizeable settlements with the defendant laboratory companies. Earlier this month, at a dinner in Washington, D.C., the Taxpayers Against Fraud Education Fund (TAF) gave Riedel its Whistleblower of the Year Award.
The case began in November 2005, when Reidel and Hunter Laboratories filed a qui tam action (or whistleblower suit) in San Mateo County Superior Court. The law suit alleged that seven California labs, including Quest Diagnostics Incorporated and Laboratory Corporation of America, had charged the state’s Medi-Cal program more for laboratory tests than they charged other purchasers of comparable services in violation of state laws. Three years later, the state of California intervened in the case.
Discounted Lab Test Prices
In its lawsuit, Hunter Laboratories stated that it could not compete in a market in which major medical laboratories offered doctors, hospitals, and clinics far lower rates than they were charging Medi-Cal. It also alleged that such discounted prices for clinical lab tests given to certain providers, when not also extended to Medi-Cal, violated state law.
At the award ceremony, the fund’s previous whistleblower of the year, Harry Markopolos, introduced Riedel. An accountant and financial fraud investigator in Boston, Markopolos worked for more than 10 years to bring the $60 billion Bernie Madoff fraud to the SEC’s attention. Markopolos also co-authored the best seller, No One Would Listen: A True Financial Thriller, published by Wiley & Sons. It is the basis for a film, Chasing Madoff.
‘Unique and Inspirational’
“Mr. Riedel’s story is unique and inspirational, not just on a human level, but also from the perspective of all of us who want to see a new ethical center develop in corporate America,” Markopolos said.
After starting Hunter Labs, “what Chris Riedel found, when he looked at the laboratory testing market in California, was nothing less than profiteering by the greedy at the expense of the needy,” continued Markopolos. “When Chris Riedel and Hunter Labs tried to enter this market, they had two obvious choices: suit up and join the kickback and price-gouging operation that had already been in full swing for 15 years—or go home.
“What’s unique about Chris Riedel and why he is TAF’s Whistleblower of the Year for 2011, is that he did not do the obvious thing. Instead, he chose a third way. He chose integrity,” Markopolos said.
THE DARK REPORT notes that the successful outcomes in the whistleblower lawsuit filed by Riedel and Hunter Laboratories are likely to encourage other lab industry whistleblowers to step forward.