CEO SUMMARY: Without much fanfare, two individuals who had been sales representatives at Berkeley HeartLab as late as 2009, took distributions of $58 million each between 2010 and 2014 for their sales consulting services at BlueWave Healthcare Consultants, according to allegations in the federal lawsuit that was filed against BlueWave and three heart testing lab companies on August 7. If true, that makes Floyd Dent, III, and Robert Johnson the richest sales reps in the lab business.
IT’S TIME TO MEET THE TWO RICHEST SALES REPS in the clinical laboratory industry. The estimate of their wealth does not come from the list of Forbes Richest 400. Rather, it comes from the U.S. Department of Justice.
The two individuals are Floyd Calhoun Dent, III, of Columbia, South Carolina, and Robert Bradford Johnson of Hanceville, Alabama. They are the cofounders of BlueWave Healthcare Consulting, Inc., based in Hanceville.
Dent, Johnson, and BlueWave also are defendants in the federal qui tam (whistleblower) lawsuit that is continuing in Richmond, Virginia. Other defendants are Health Diagnostic Laboratory and its CEO, Tonya Mallory, Singulex, and Berkeley Heart Lab (no longer in business). (See related article for details of lawsuit.)
Dent and Johnson contracted with HDL and Singulex to provide laboratory sales services through BlueWave. In the federal lawsuit, prosecutors claim that the defendants paid illegal inducements to encourage physicians to order medically unnecessary tests. The lawsuit said that during the years 2010 through 2014, HDL and Singulex paid BlueWave $242.8 million. ($223 million from HDL and $18.6
million from Singulex).
The court documents also say that, during this same period, BlueWave distributed “at least” $116 million to Dent and Johnson. Each individual received $58 million for the 60-month period ending in 2014!
Fast-track To riches
What makes this story intriguing is that, at the end of 2009, both Dent and Johnson were simply journeyman sales reps at Berkeley Heart Lab (a defendant in the federal lawsuit, but no longer in existence). Thus, the tale of how these two generated a quarter of a billion dollars in revenue at BlueWave Healthcare-and kept half for themselves-hints at the unimagined size of the fraud that is alleged in the federal whistleblower lawsuit.
Not much is known about Dent and Johnson. They and BlueWave have been under federal investigation for at least two years and there is not much personal information about them that exists in the public domain or on the Internet.
THE DARK REPORT has learned some facts about the careers of Dent and Johnson, however. Dent is a graduate of the U.S. Naval Academy. He worked in sales at Pfizer, Aventis, and SanofiSynthelabo. Around 2005, he joined Berkeley HeartLab as a sales representative. He worked there until the end of
2009, when he left to found BlueWave with Johnson.
Johnson is a graduate of Auburn University. He held sales positions at Merck and Takeda Pharmaceuticals through the 1990s. In 2001, he began working as a sales representative for Berkeley HeartLab, a position he held until leaving at the end of 2009. That’s when Johnson and Dent cofounded BlueWave.
Biggest Lab Fraud ever?
The magnitude of the fraud described in the whistleblower lawsuit has no precedent in the clinical laboratory industry. Federal prosecutors say that HDL, Singulex, and Berkeley were paid $500 million by the Medicare and Tricare health programs, most of it coming between 2009 and 2014.
There is another significant point to emphasize about the $116 million that went to Dent and Johnson. Even the aftertax amount that remains gives them ample financial capability to finance their own way back into the lab business. With such big profits to be made from their sales schemes, why wouldn’t they?
This is also why there are ongoing rumors that individuals associated with BlueWave Healthcare Consultants are the source of the funding that launched True Health Diagnostics during the past 18 months. These rumors are unconfirmed, but the Richmond newspaper has published information that identifies Johnson as some type of marketing agent for True Health. Also, onetime employee of BlueWave, Jeffrey “Boomer” Cornwell, has been identified as “an agent and officer of True Health.”
BlueWave Paid $242 M, Owners Took $116 M
DOCUMENTS FILED ON AUGUST 7 as part of the federal whistleblower lawsuit have specific details about remuneration paid to the defendants. For the years 2010 through< 2014, the U.S. attorneys claim the following about the payments to BlueWave Healthcare Consultants and its two owners, Floyd Calhoun Dent, III, and Robert Bradford Johnson:
Furthermore, BlueWave, Johnson, and Dent knowingly and willfully solicited and received remuneration, totaling more than $223 million, that was meant to induce them to arrange for or to recommend the purchasing or ordering of HDL’s tests that might be paid for in full or in part by federal health care programs.
From 2009 through July 2014, HDL collected approximately $333 million from Medicare and Tricare related to claims that were tainted by the processing and handling fees. Mallory’s salary and bonuses were directly tied to HDL’s profits, and she personally collected at least $26 million in salaries, bonuses, and stock distributions between 2009 and 2014. Between 2010 and 2014, BlueWave received commission payments from HDL totaling more than $223 million. Between 2010 and 2013, BlueWave received commission payments from Singulex totaling more than $18.8 million. [Boldface by THE DARK REPORT.]
As joint owners of BlueWave, Johnson and Dent each received 50% of all net profits generated from BlueWave’s improper contracts with HDL and Singulex. Upon information and belief, the government estimates that Johnson and Dent each received at least $58 million from BlueWave distributions.