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GHOST PATIENT, PHANTOM DOCTOR
A railroad defendant alleges massive fraud in Trial Lawyers, Inc.'s asbestos business in West Virginia.
The chicanery that Judge Jack uncovered was just the tip of the iceberg. Emboldened
by her efforts, others began to seriously challenge the asbestos business model.
Stephen King could make a great horror novel out of a case unfolding in West
Virginia. It would feature allegations of employees who received healthy settlements
before their employer, railroad CSX Transportation, realized that the employees’
lawyers had paid union officials to recruit victims.[127]
CSX claimed that cases against it were built with, among other things, a ghost
patient,[128] a phantom doctor,[129] and a certifiably
“immoral” and unlicensed X-ray screener.[130]
Clients were given scripted testimony,[131] it was alleged,
plus canned medical diagnoses for their doctors to sign,[132]
based on X-ray analyses by a screener who was licensed. He later surrendered
his Texas medical license and promised never to try to get it back.[133]
King’s imagination wouldn’t be taxed in writing the tale—it’s
all laid out in smoking-gun documents.[134]
Railroad Defendant Plays Hardball
For over two years, CSX Transportation has been hammering Pittsburgh’s
law powerhouse Peirce, Raimond & Coulter, in a court in West Virginia.[135]
In a case before U.S. District Judge Frederick P. Stamp, Jr., CSX filed a 37-page
complaint in July 2007[136] that proved to be a bombshell:
with 676 pages of careful documentation, CSX alleged that the Peirce firm and
an allied doctor, Ray Harron, had conspired to file fraudulent asbestosis claims
against the company.[137] CSX’s complaint was based
on common-law claims of fraud and negligence as well as federal violations of
the Racketeer Influenced and Corrupt Organizations (RICO) Act.[138]
PULLING NO PUNCHES
In its complaint against the Peirce law firm and Dr. Ray Harron, asbestos
defendant CSX made the following startling accusations:
“Beginning in the early 1990s, the lawyer defendants, collectively
and in concert, embarked upon a calculated and deliberate
strategy to participate in and to conduct the affairs of the Peirce firm
through a pattern and practice of unlawful conduct including bribery,
fraud, conspiracy and racketeering. . . .
“The lawyer defendants actively solicited the clients’ attendance
at the screenings, deliberately hired unreliable technicians and doctors
to produce the diagnoses on which the claims were based, coached testimony,
provided the clients with pre-printed, boiler plate forms to be signed
by their personal physicians confirming their diagnoses and, lastly, handled
the prosecution of the claims with virtually no guidance or direction
from the clients, all the while intending to profit from their illegal
conduct to the detriment of [CSX]. In short, the filing and prosecution
of these nine claims constituted a deliberate effort by the lawyer defendants
to defraud [CSX].”[162]
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The mail and wire fraud allegations that underlay the RICO charges grew out
of nine specific cases[139] involving the claims of individuals
whom Dr. Harron had found, on the basis of an initial set of X-rays, to be unimpaired,
i.e., not suffering from asbestos injury. Each individual had then undergone
a second round of X-rays, which Dr. Harron read as showing asbestosis “despite
the objectively unchanged condition of the patient’s lungs,”[140]
in the words of the amended complaint.
Clients had been sent a letter advising them to say that “you never suspected
you had asbestosis and/or silicosis” until results came back from the sponsored
screenings, because otherwise “the statute of limitations will preclude
you…[from] being compensated.”[141] According
to the complaint, the letters coached clients and “evidence a deliberate
scheme” to encourage testimony “without regard to the true state of
the facts.”[142]
In other words, the lawsuit contended that all the elements of mail fraud[143]
and wire fraud[144] were present, as well as a foundation
for a federal racketeering charge.[145] Not Your Average
Family Clinic Dr. Harron, a longtime kingpin in the asbestosis diagnosis game,
was an obvious candidate for Trial Lawyers, Inc.’s screenings: according
to the complaint, the good doctor “identified asbestosis in approximately
97.5 percent of the X-rays he read for the Peirce firm since 2000.”[146]
Moreover, Dr. Harron may not be the most credible witness, for himself or for
the lawyer defendants.[147] He gave up his Texas license
under a Texas Medical Board order that devotes 11 paragraphs to his misconduct
in asbestos and silicosis cases.[148]
Radiologic technologist James Corbitt performed the lion’s share of screenings
for the Peirce law firm for about a decade, until 2004. According to CSX’s
complaint, “Corbitt’s reckless and unlawful conduct resulted in chronically
underexposed X-rays … [that] gave partial cover to Dr. Harron and aided
in the process of producing false positive asbestosis diagnoses.”[149]
Corbitt is also unlikely to impress a jury. A convicted felon, Corbitt served
18 months in federal prison on charges of theft of government property, fraud,
and making false statements, and paid almost $193,000 in restitution.[150]
Twice he was denied a license in Ohio, not because of his 1993 felony conviction
but because his failure to disclose it showed a lack of “good moral character.”[151]
When Corbitt was fined $10,000 by Texas regulators in 2001 under an emergency
order, defendant attorney Robert Peirce, Jr., paid half that fine. Peirce explained
in a deposition that he did so “to keep the relationship and so we could
use him for the screenings.”[152] Corbitt took the
Fifth Amendment when asked under oath whether he knew about and/or complied
with various licensing requirements.[153]
Harron and Corbitt aren’t the only medical professionals in this sordid
tale. CSX alleges that the doctor who signed the diagnosis form for the plaintiff
in a West Virginia state case had an invented name and simply did not
exist.[154] Neither did the address, in an area of fraternity
and sorority houses zoned residential, that was given for his office.[155]
Most damning of all, the small part of the diagnosis form that wasn’t legal
boilerplate had been filled out in the victim’s own handwriting.[156]
Ghost Patient Brings Scheme to Light
Perhaps even more incredible, one of Peirce’s clients actually sued CSX
and won a settlement using another patient’s X-ray.
CODE OF SILENCE
Drs. Ray Harron (left), Andrew Harron(center), and James Ballard were
sworn in on March 8, 2006, by a House panel investigating mass screening
abuses in asbestos and silica litigation. All three asserted their Fifth
Amendment rights against self-incrimination rather than answer a single
question from congressmen.[163]
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Ricky May, Daniel Jayne, and Robert Gilkison had been railroad buddies for
years, working at CSX in the same areas and as members of the same union local.[157]
Sometime before June 2000, which was when the Peirce law firm had scheduled
an asbestosis screening, May tested negative for asbestosis and Jayne tested
positive. So, according to May, Gilkison, who had left the railroad and was
working part-time for the Peirce law firm, helping it arrange screenings, suggested
a simple plan: Jayne would show up at the screening, pass himself off as May,
and produce a positive X-ray.[158] It worked. Both May
and Jayne sued the railroad and both walked away with settlements—$7,000
in the Jayne case and $8,000 in the May case.[159] How
much might have gone to the Peirce firm and whether Gilkison received any of
the settlement money is not reported.
When CSX discovered the ruse, it sued May and Jayne, then reached settlements
requiring both men to repay the money they had received from the company.[160]
CSX did not make a deal with Gilkison.161
CSX said the ghost claim had been effectively hidden from it because the Peirce
firm had inundated it with “thousands of asbestos claims including Mr.
May’s group of more than 900 claimants and Mr. Jayne’s group of over
2,000 plaintiffs…. [I]t would have been impossible for plaintiff CSX to
investigate each claim on an individual basis.”[164]
One of Peirce's clients actually sued CSX and won a settlement using
another patient's X-ray.
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But Mr. May isn’t the only ghost CSX has resurrected. The lawsuit dug
up a bribery scandal that the asbestos bar would love to forget. Peirce and
his then-partner Louis Raimond admitted in answers to interrogatories that they
made a combined total of $20,000 in cash payments to Charles Little, then president
of the United Transportation Union.[165] Little and three
other UTU leaders pled guilty to federal racketeering charges in a case involving
attorneys paying bribes in return for being named the “union designated
attorneys” of workers claiming injury due to asbestos exposure.[166]
The judge in that case had denied a request to disclose the names of the 40
or more attorneys allegedly involved, thereby protecting them from professional
disciplinary action,[167] although Peirce—who had
decades ago served as Allegheny County commissioner and clerk of courts—was
identified as one of the 40 in a 2003 newspaper story.[168]
The issue, dead for almost four years, arose for a whole new audience.
Off the Hook—Or Not?
Notwithstanding his reported connection to the Little bribery scandal, Peirce
has escaped criminal prosecution for the affair.[169] It
now appears that the Peirce firm and Harron may also escape major civil liability
for the fraudulent schemes alleged by CSX, many of which seem to fall outside
statutes of limitation.
CORRUPT JUDGE SOLICITS PLAINTIFFS’ LAWYERS
When Judge Joseph Jaffe inherited the 2,200-case asbestos docket in Pittsburgh,
in 2002, he saw in it a quick way to maintain a lifestyle beyond his $121,225
salary: extract payments from the two attorneys who between them were
handling the vast majority of the pending cases and then throw the cases
in their favor.[181] Prosecutors say the only reason
he isn’t still doing it in Allegheny County’s Court of Common
Pleas is that one of the lawyers agreed to cooperate with the FBI and
get both the payment and the terms of the solicitation on tape.[182]
Jaffe apparently hatched the scheme while on vacation in Hilton Head, South
Carolina.[183] It was simplicity itself—he drew up
a list of almost $13,000 in personal bills and provided a copy to each of the
lawyers. The list included the $4,200 vacation, $1,323 to cover bounced checks,
$950 in country-club fees, and a $500 birthday party for his teenage daughter.[184]
The money, he assured them, would buy influence in his courtroom.[185]
Both paid: a total of $25,500.[186]
 When
the story broke, there was public outrage in Pittsburgh but little coverage
anywhere else. The judge was in tears when he pled guilty to extortion
under the Hobbs Act, which is sometimes used to prosecute public corruption,
and again when he was ordered to pay $5,100 in fines and costs and sentenced
to 27 months’ incarceration plus three years of supervised probation.[187]
“Your actions have left a stain on the fabric of the judicial system which
will require years to cleanse,” the sentencing judge said.[188]
Jaffe told the court, “I broke the law and violated the trust of my public
of-fice. I made a very serious mistake and take full responsibility for my actions.
I will never let myself be in this position again and I am filled with remorse.”[189]
Thirteen months later, he changed his tune and filed the first of eight challenges
to the length of his sentence, leading prosecutors to assert that he had “failed
to recognize the severity of his crime.”[190] In his
most recent court filing, in which he sought early release from supervised probation,
he described himself as being “on a path of rehabilitation and redemption.”[191]
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Statutes of limitation are typical time bars on civil claims that require a
plaintiff to seek legal redress during a specific time window after an injury
is or should have been discovered. Such limitations are important: without statutes
of limitation, individuals and corporations become excessively risk-averse because
of a lack of certainty about their possible legal exposure. In addition, fairly
resolving claims about long-ago injuries can be exceedingly difficult, as asbestos
litigation has made all too clear.
Civil claims brought under the federal RICO Act have a four-year statute of
limitations.[170] On March 28, 2008, Judge Stamp ruled
that all but one of the claims cited by CSX in its federal racketeering and
conspiracy claim occurred on or before May 2003, over four years before CSX
had submitted its relevant complaint.[171] Because a RICO
claim requires showing a “pattern of racketeering”[172]
and CSX’s lone fraud claim filed within the statute of limitations was
insufficient to establish a “pattern,” the judge dismissed the RICO
causes of action against the Peirce firm.[173] He followed
suit and dismissed the RICO claim against Harron on April 2.[174]
Significantly, Judge Stamp did not dismiss the state common-law case for the lone
fraud claim that fell within the statute of limitations.[175]
Whether that claim will proceed, or whether the judge will delay action until
after the underlying and still-pending asbestos case is resolved on the merits,
as requested by Peirce, remains unclear.[176]
Despite the statute-of-limitations dismissal, Judge Stamp made no ruling on
the factual veracity of CSX’s allegations. The judge also explicitly rejected
Peirce’s motion under Federal Rule of Civil Procedure 12(f) that he strike
CSX’s primary allegations from the record because they contain allegedly
“immaterial, impertinent, or scandalous matter.”[177]
Also, even though the civil RICO claim is barred by the statute of limitations,
a criminal RICO claim would not be: criminal RICO claims have a five-year
statute of limitations, and “RICO’s criminal statute of limitations
runs from the last, i.e., the most recent, predicate act.”[178]
Thus, if CSX’s allegations are true, the defendants could be subject to
federal criminal charges filed up until 2011.[179]
In any event, Peirce, used to calling the shots with little interference, has
been feeling the heat. “[CSX] and other railroads are now refusing to deal
with the Peirce law firm in the processing of any claims,” said Peirce’s
outside legal counsel, complaining that CSX is intent on “driving the firm
out of business.”[180] One can only hope.
ADVISOR RIPPED OFF MILLIONS
Unsurprisingly, some lawyers’ advisors have also tried to milk dollars
from the asbestos cash cow. One such case surfaced in August 2007. It
involved a financial consultant who had overbilled millions of dollars
for work he did in asbestos bankruptcy proceedings.[192]
Loreto Tersigni was the sole owner of financial advisor L. Tersigni Consulting,
P.C., known primarily in tort reform circles for offering data used in
a Public Citizen report in May 2005. That report blasted Senator Arlen
Specter’s asbestos legislation (S.B. 852)(see pages 20–21).[193]
Tersigni, a certified public accountant and (ironically) a certified
fraud examiner, worked almost exclusively for two law firms: Washington,
D.C., tax specialists Caplin & Drysdale; and the Texas firm Stutzman,
Bromberg, Esserman & Plifka. Those firms hired Tersigni Consulting
to represent creditors’ committees in 24 asbestos-related Chapter
11 bankruptcy cases.[194] Tersigni billed by the
hour plus expenses and submitted to the law firms his bills for the creditors’
committees; the bankruptcy estates of the 24 companies actually paid the
bills.
It turns out that Tersigni, starting in 2002, had padded his bills by
inflating the number of hours his firm worked.[195]
A whistleblower notified the U.S. Attorney’s office of the abuse
in April 2006. But the federal prosecutor handling the case ordered the
whistleblower and the U.S. Trustee not to tell the court, the committees,
or the companies ultimately paying the bills as long as an FBI investigation
remained in progress. Inflated billing was thus allowed to continue for
another 13 months.[196]
Tersigni’s death, in May 2007, ended the criminal investigation
of the firm, because he had apparently acted without the knowledge of
its professional staff. With his death, the gag order expired as well,
and with it the inflated billing.
“[W]e’ve been paying fees for a year … [not] knowing they
were padded,” said bankruptcy judge Judith K. Fitzgerald in exasperation.[197]
In demanding that it never happen again, she added, “No one, not
the U.S. Trustee, not the U.S. Attorney, not a prosecutor, no one is to
prohibit that contact and that information being transmitted to this Court
forthwith and immediately. It has potentially cost [the asbestos compan
bankruptcy] estate millions of dollars, and I don’t have any idea
how the government intends to reimburse the estate for it.”[198]
The Tersigni firm itself filed for bankruptcy a few months after the
judge spoke, and an examiner was appointed to sort out the mess. His first
report said that Tersigni’s firm had collected $45 million in fees,
of which Tersigni took $29 million in salary, distributions, and 401(k)
contributions. An examination of a sampling of bills suggests that fees
may have been inflated by as much as 23 percent, or $10 million.[199]
In order to ensure that the available assets are fairly distributed to
those harmed but that something remains for Tersigni’s widow, the
court ordered mediation of the respective claims.[200]
Except for dispositions requiring court approval, the mediation process
and any documents it produces will be kept secret.
One thing that can’t be hidden is the cost to the estates of the
bankrupt asbestos companies in the form of capital they could have used
to rebuild their businesses. The scam also deprived injured workers of
money they could have used to rebuild their lives.
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<<previous section | next section>>
127. CSX Transportation v. Gilkison, No. 05-cv-202 (N.D.
W. Va. July 5, 2007) (Pacer Accession Doc. No. 208 plus exhibits A-HH, Am. Compl.
¶¶ 22-29).
128. No. 05-cv-202 (Dec. 22, 2005) (Compl. ¶ 26).
129. In Re: FELA Asbestosis cases, No. 02-C-9500 (Cir. Ct. W. Va.) (Mot.
to Dismiss Plaintiff Rodney Chambers ¶¶ 15-18).
130. No. 05-cv-202 (Am. Compl. ¶¶ 41-45, 52).
131. Id. at ¶¶ 65-67.
132. Id. at ¶ 68.
133. In the Matter of the License of Raymond Anthony Harron, M.D., Texas
Medical Board, No. C-9439 (April 13, 2007) (Agreed Order); 05-cv-202 (Am.
Compl. ¶ 58).
134. The case is not yet to the summary judgment motion stage despite more than
two years in court, and the defendants have only recently submitted formal answers.
The defendants have generally denied the allegations, said they were isolated
incidents, or challenged the legitimacy of the case on procedural, statute of
limitation, and other grounds. Although the pleadings are filled with references
to alleged criminal activity as predicate acts for the now-dismissed civil RICO
action, no criminal charges have been filed. The case and any remedies that
a court might award are strictly civil.
135. No. 05-cv-202; No. 02-C-9500.
136. No. 05-cv-202 (Doc. 208).
137. No. 05-cv-202 (Am. Compl. ¶ 3).
138. See id.
139. See id. at ¶¶ 59-60.
140. Id. at ¶ 70.
141. Id. at ¶ 65.
142. Id. at ¶ 66.
143. See id. at ¶ 83 (citing 18 U.S.C. § 1341).
144. See id. (citing 18 U.S.C. § 1343).
145. See id. (citing 18 U.S.C. § 1961(1)).
146. Id. at ¶ 36.
147. Dr. Harron is himself a defendant in the Gilkison suit, as are current
and former members of the Peirce law firm. Harron denies any wrongdoing in the
Peirce cases he worked on, and strongly objects to references to his exercise
of his Fifth Amendment rights in unrelated proceedings. No. 05-cv-202 (Jan.
30, 2008 ) (Doc. 263, Reply Mem.).
148. In the Matter of the License of Raymond Anthony Harron, M.D., Texas Medical
Board, No. C-9439 (April 13, 2007) (Agreed Order). Under the deal which produced
an agreed to order, Dr. Harron was allowed to neither admit nor deny the allegations
against him and to deny that he violated the state’s medical practice act.
His history and the action against him, however, remain on the medical board’s
website in both the formal sections and the news release archives.
149. No. 05-cv-202 (Am. Compl. ¶ 53).
150. See id. at exh. G. (U.S. v. Corbitt, No. 93CR133A (N.D. Ohio) (Plea
Agmt.)).
151. See id. at exh. K (journal entry dated Feb. 1, 2002, Ohio Department
of Health, James Corbitt license application for a radiographer).
152. See id. at exh. J (Robert N. Peirce, Jr. Dep., May 8, 2007, at 147).
153. See id. at exh. F (James Corbitt Dep., Nov. 17, 2006, at 117-119).
154. See No. 02-C-9500 (Mot. to Dismiss Plaintiff Rodney Chambers ¶¶
15-18). The obscure West Virginia case would not be widely available except
for a Motion to Limit Discovery filed by the Peirce defendants. CSX appended
the documentation of the ghost doctor to a response filed Dec. 13, 2006 (Document
146-8).
155. See id.
156. See id.
157. See No. 05-cv-202 (Document 146-2, Ricky May Dep., at 6-11).
158. See id.
159. See No. 05-cv-202, (Dec. 22, 2005) (Compl. ¶¶ 21, 42).
160. See No. 05-cv-202 (June 14, 2006) (Br. Mot. Part. J. 7) (citing
CSX Transportation v. May, No. 5:04-cv-83 (N.D. W. Va.) and CSX Transportation
v. Jayne, No. 04-C-168-K (Cir. Ct. W. Va.)).
161. Court papers show that subsequent to the May-Jayne incident, Gilkison suffered
a major stroke and his participation in the case has been limited.
162. No. 05-cv-202 (Am. Compl. ¶¶ 20, 74-75).
163. The Silicosis Story: Mass Tort Screening and the Public Health, Hearings
before the Subcommittee on Oversight and Investigations of the Committee on
Energy and Commerce, House of Representatives, Serial No. 109-124.
164. No. 05-cv-202 (Am. Compl. ¶¶ 169-70).
165. See id. at exh. C (Supplemental Ans. of Defendant Peirce, Raimond
& Coulter, P.C. to Plaintiff CSX Transportation Inc.’s First Set of
Interrogatories (Doc. 208-4)).
166. USA v. Byron Alfred Boyd, H-03-362 (S.D. Tex.); renumbered for electronic
accession as 4:03-cr-00362.
167. See id. (Doc. 306, Mem. Op. and Order, U.S District Judge Sim Lake
(Sept. 13, 2005)).
168. See Chris Osher, Testimony Implicates Ex-official, Trib.-Rev.
(Pittsburgh, Pa.), Dec. 13, 2003.
169. There is no evidence that Peirce or other attorneys who may have been involved
with Little committed any criminal act. Due to the sealed records, see supra
note 167, independent inquiry into the underlying facts is not possible. Defendant
Peirce and defendant Raimond admit giving $15,000 and $5,184. Chris Osher, Tearful
Jaffe Sentenced to Federal Prison, Fined $5,000, Trib.-Rev. (Pittsburgh, Pa.),
June 6, 2003.139. See id. at ¶¶ 59-60.
170. See Agency Holding Corp. v. Malley-Duff & Assoc., 483 U.S. 143,
156 (1987).
171. No. 05-cv-202 (Mem. Op. and Order, at 6).
172. Id. at 9 (citing 18 U.S.C. § 1961(5)).
173. See id. at 10, 14.
174. No. 05-cv-202 (Mem. Op. and Order, at 9).
175. See id.; No. 05-cv-202 (Mar. 28, 2008) (Mem. Op. and Order, at 14).
176. Cf. No. 05-cv-202 (Apr. 11, 2008) (Def.’s Ans., Aff. Def. ¶ 6).
177. No. 05-cv-202 (Mar. 28, 2008) (Mem. Op. and Order, at 13-14).
178. Agency Holding Corp., 483 U.S. at 155.
179. The only claim not time barred by Judge Stamp’s order involved a lawsuit
filed by the Peirce firm on behalf of Earl Baylor on February 21, 2006.
180. Letter dated Feb. 22, 2006 from Robert L. Potter to Marc E. Williams and
J. David Bolen of Huddleston Bolen, filed Dec. 13, 2006. No. 05-cv-202 (Doc.
146-12). Huddleston Bolen, of Huntington, WV, is outside counsel for CSX.
181. See generally USA v. Jaffe, No. 02-cr-188 (W.D. Pa.) (PACER accession
no. 2:02-cr-188).
182. See id. (Aug. 21, 2007) (Doc. 56A, at 3-4).
183. See id. at 3.
184. Osher, supra note 10.
185. Marylynne Pitz, Teary Judge Jaffe Admits Guilt to Extortion, Post-Gazette
(Pittsburg, Pa.), Feb. 11, 2003.
186. Osher, supra note 184.
187. See 02-cr-188 (June 6, 2003).
188. Osher, supra note 184.
189. Id.
190. USA v. Jaffe (Doc. 56, at 2 & n.1).
191. USA v. Jaffe (Doc. 55, at 3).
192. In re: L. Tersigni Consulting, CPA, P.C., a/k/a/ L. Tersigni Consulting,
P.C., debtor, No.
07-50702 (Bankr. D.C., March 26, 2008) (Doc. 245, First Report of Hugh M. Ray,
courtappointed examiner).
193. Chris Schmitt and Frank Clemente, Federal Asbestos Legislation: The Winners
Are…, Public Citizen’s Congress Watch, Washington, D.C., May 2005,
at 3, 6 fig. 1. To date, the Tersigni investigations have focused on billing,
not the validity of the firm’s data or results. Public Citizen did not
respond to a request for comment on whether it stands by its report, whether
it paid Tersigni directly or verified his data from other sources, and whether
it, too, believes itself to have been overbilled.
194. No. 07-50702 (Doc. 245). The complete list is in Exhibit 1: Armstrong,
Combustion Engineering, Federal Mogul, Kaiser Aluminum, Owens Corning, U.S.
Gypsum, U.S. Mineral, W. R. Grace, A C & S Inc., and Flintkote in Delaware;
Artra Group in the Northern District of Illinois, Eastern Division; Babcock
& Wilcox in the Eastern District of Louisiana; G-I Holdings, Burns &
Roe and Congoleum in New Jersey; GIT, NARCO and Pittsburgh Corning Corp. in
the Western District of Pennsylvania; J.T. Thorpe and Lac D’Amiante Du
Quebec Lee in the Southern District of Texas; Porter Hayden Co. in Maryland;
A.P.I. Inc. in Minnesota; Thurston & Sons, Inc., in the Eastern District
of Virginia; and Quigley Co. in the Southern District of New York.
195. Id. (Doc. 245, at 1, 6, 11).
196. The trustee—an employee of the U.S. Department of Justice—told
U.S. Bankruptcy Judge Judith K. Fitzgerald that department policy required the
trustee’s office to defer to criminal prosecutors and that the whistleblower—who
now heads the new financial advisory firm in the W.R. Grace bankruptcy—was
innocent of any wrongdoing and could not have told anyone while the criminal
probe was in progress.
197. No. 01-01139 (Hr’g Tr., at 14-15). The Grace case was among the first
where information on the Tersigni overbilling surfaced.
198. Id. at 22. The examiner notes that the FBI has been uncooperative in providing
access to information that may be crucial to determining what claims the Tersigni
firm’s bankruptcy estate may be successful in pursuing against the Mr.
Tersigni’s personal probate estate. That continues the trend that triggered
Judge Fitzgerald’s strong words.
199. No. 07-50702 (Apr. 8, 2008 ) (Doc. 257, Order Directing Mediation).
200. No. 07-50702 (First Report of Hugh Ray, at 7-8).
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