“Legal.”
“This is Cecil Edgington from out in Salt Lake City. I am a practicing pharmacist who works closely with the Mastcakil program. I think I may be going to have a legal problem with the IRS, and I am probably going to need some help.”
“Sure thing, Mr. Edgington. We appreciate everything you guys out there in the pharmacies around the country are doing. We will be only too happy to help. I’ll get one of our lawyers.”
To his surprise, the man who answers next is none other than the department head, Carl Midgely.
“What’s going out there in the West, Cecil? I’m hearing the initials ‘IRS.’ I never like to hear them, but we are getting quite a few such calls in the last few days.”
“Do I need legal representation when I meet with them?”
“I guess from your tone that you have had a preliminary meeting, that right?”
“Yes.”
“What kind of information did you share with them?”
“It was one agent, and I only talked for about fifteen minutes and kept it very general and very bland.”
“Good man. That’s exactly what you should have done. This is what we should do: don’t say another word to the IRS until we have an attorney and one of our accountants with you. Let us know when they schedule a meeting at their offices, and we’ll be there with you. We want to deal with their questions decisively right off the bat; so, they don’t think they have to push too hard, if you get my meaning.”
“I do, and thanks. I’ll let you know. Do you think there is something to worry about?”
“No, Cecil. I think they’re fishing, and—in their little bureaucratic minds—you are a little fish that they might be able to use as bait to catch the big fish here in Florida. I mean no offense to you by that.”
“It’s okay. I want to be a little fish.”
“But not so very little, Cecil. I presume you are enjoying your newly increased income and want it to continue. We are all going to have to work together as a team. As we do that, their suspicions will be shown to be groundless, and we will be able to keep on doing business as usual. It is imperative that we are all on the same page. There are details they don’t have to know, and our people will help you to know just what to say and what not to say. So, don’t worry too much over this.”
“Thanks, I’ll try. But this will be my first audit, and I admit that it makes me nervous.”
“Understandable. Well, if you don’t have any more problems, let me ask you about a more pleasant subject. Are you and…,” there is a pause, “Andrea … going to join us in Hawaii week after next? It should be loads of fun.”
“We are. My wife would have my head if I let anything or anyone interfere with that trip. Maybe we’ll be able to talk a bit while we’re there.”
“I’ll look forward to it.”
Midgely thinks that the likelihood of him talking to Cecil Edgington and his frumpy wife from out in the wild west while they are in Hawaii with 4,500 other invitees is the statistical equivalent of a lightning strike, but he does not suggest anything like that opinion to Edgington. After they hang up, Midgely punches in the number of his attorney who is next on the list to deal with the mounting IRS issue. He gives Crandall Fisher the particulars of Cecil Edgington and then forgets about him.
Cecil does not hear back from IRS agent, Henry Lloyd Evans, before he and Andrea leave for Hawaii.
Chapter Four
The Hilton Waikoloa Village is a tropical paradise where the ambient temperature varies little year-round from 73 to 83 degrees and breezes interspersed with winds up to seven miles an hour. Every day is very nearly the same as it was yesterday and will be tomorrow. It rains occasionally and briefly, but for the first two days of the Edgingtons’ stay, the weather has been sunny to partly cloudy with no precipitation. It is a glorious time and place.
Every late afternoon there is a mandatory continuing education lecture for the professionals who will obtain thirty-five hours of credit they need to keep up their licenses. Otherwise, no one makes any demands on Cecil. He and Andrea spend most of the days lolling around the adults-only pool. Cecil is the more adventuresome. He slides down the 175-foot twisting waterslide while Andrea takes Aqua Hula lessons and a daily aqua aerobics class in this water and sun-lovers’ paradise. She attends lectures on the history and the fauna and flora of Hawaii, while Cecil discovers the main saltwater lagoon. The consortium provides him with a cabana rental purchase, including personal concierge service, cold Oshibori towels, fruit baskets, and lunch service. He rents snorkels and swims with the green sea turtles who are plentiful and active enough to bump into him as he lazily watches them and the angel fish, groupers, banded pipe fish, Banggai cardinalfish—now rare because of overfishing for home aquariums—and several dozen other fish whose names he does not know. The experience is refreshing and clears his mind about his life, his expectations, and his potential for trouble.
On the morning of the third day of the vacation, he signs up to play squash—a game he has never played and which is more an opportunity to demonstrate his lack of athletic prowess than it is to have any fun. However, there is a very positive outcome from having signed on for the activity. He is paired up with consortium CFO Chick Sorenson. After their three games—which only make Chick laugh at Cecil’s expense and is hilarious to Cecil, himself—the two men sit in a sauna and talk. As different as the two men are, they strike up an early friendship and share confidences that neither man would have been likely to share with other men.
Chick tells Cecil about his growing concerns for what is going on in the consortium.
“You know, Cecil, I shouldn’t be talking to you or to anyone about this, but I have the feeling that I just cannot hold it in any longer. I don’t really know why, but I feel like I can trust you. And, I like you; so, I want to help you.”
“You can trust me, Chick. I won’t interrupt, and I certainly won’t talk about anything you have to say to me. When you’re done, I want to share some concerns of my own.”
“Look, Cecil. Some of what I am going to tell you comes from the secret closed executive meetings I attend, and some of it comes from what I have been observing on my own. You know that my position gives me complete access to the financial records of the four companies and of the governing consortium management executives.”
“Chick, you don’t have to tell me anything. I am a good listener, but I wouldn’t want you to get into trouble.”
“Cecil, I think we are all headed for trouble, and that is why I want to unburden myself to you and hopefully to help you get through a bad patch that is going to come. So, here goes. If you let any of this get back to the other execs, my career is toast … maybe worse. Frankly, I’m getting a little scared.
“I’ll give you the short version in all of its ugliness. There are twelve in consortium, including me, who are party to the keeping of two sets of books. One set is for public consumption—the IRS and state auditors, Wall Street, the FDA, and our independent accounting firm, Danforth, Highcroft, and Wang. The other is a record of significant differences which are highly beneficial to the twelve execs. If the SEC, the FDA, the Justice Department, or any state’s attorney general where we are licensed, got wind of what is in that other set of records, it would be disastrous. In a day, a team of forensic accounts would be able to prove that we have been skimming profits, double billing, overcharging, submitting fraudulent improper and incorrect bills to the government, charging for unnecessary services, and accepting kickbacks from a lot of big and little pharmaceutical and medical device companies. This goes way back, well before we got going on Mastcakil. Now, all of that past crooked bookkeeping seems like only the tip of the iceberg.
“Our income reported for the last six quarters was just over $14 billion. The real income was more like $19 billion. The reported costs were $11 billion for the first year—the start-up year—and $4 billion for the last two years. The actual costs were more like $8 billion total. The books have been c
ooked by expert chefs. The money has been moved around in a maze so complex it would make your head spin. The money gets to offshore accounts which are all but untraceable, and it gets there by a money-laundering scheme that corrupts FBI agents, investigators from state auditing offices, and about seven big city fraud investigation units. Just one whistleblower and the whole house of cards will topple.”
“Why don’t you do something about it, Chick? That much criminal activity is likely to land you and the other executives in prison for a long time, and us little guys will have the roof cave in on us. We’ll all go to jail.”
Chick sits silently for several minutes before answering.
“You know, Cecil, I think we—I mean our lives—are a lot the same. I grew up in a little place in Utah. You probably didn’t know that. It’s called Heber. You heard of it?”
“Sure, it’s a beautiful valley. Mt. Timpanogos is really magnificent. My wife and I go up there during the heat of summer and have a little overnighter at the Homestead resort or the Blue Boar Inn every now and again. Nice people.”
“They were when I was growing up. My family wasn’t really poor, but we never had much extra. I wanted more. I went the U and got a degree in accounting. I got a boring job in Salt Lake and made more than my dad, but it was a dead end. At least I thought so. I went on and got my CPA and landed a better job. My wife was okay with it, but when I went to the continuing education seminars and annual meetings, I saw guys who were only a little older than me with gorgeous girls on their arms.”
“I know exactly what you mean. My wife, Andrea, calls them the guys’ nieces.”
Chick smiled his agreement.
“They had great tailor made custom suits, fancy shoes, shirts, and ties. I wanted more. I was not envious exactly. I mean, I didn’t begrudge them any of their wealth, but I wanted to have a seat at the table. I wanted to be one of the big guys. You know what I mean?”
“Perfectly. You could substitute ‘pharmacist’ for ‘CPA,’ and you are describing my life to date.”
“I make good money, but I work too hard, don’t have enough time for vacations or just to talk to my wife and kids.”
“Right outta my playbook, Chick.”
“Not entirely. My first marriage could not last. She left me for a shoe salesman, a steady guy who talked to her. I found what I wanted, and my next wife found what she wanted. I got a job as the CFO of a small-time drug distribution company, and when the chance came to make a vertical move, I got on with PharmaPerfect and did well for five years. She got a rich husband; worked all right for both of us, I guess. Then a headhunter from ZyterBrothersTechnologies made me an offer I couldn’t refuse. They’re a much bigger company, and I came on as the CFO at the age of thirty-seven. Four years later when the consortium was formed, I ended up as the CFO of the whole shebang. At Zyter Brothers I made three hundred k a year. I started at the consortium for twice that. Last year I took home five million dollars after taxes, and I was by no means the best paid of the executives.
“So, why am I complaining? It’s not that I don’t like the money, but I am a student of healthcare fraud and all of its cousins. I hear some murmurings from the feds and from the State of Florida. I’m beginning to think I am sitting in a house of cards—a king looking out across the approaches to his castle and thinks he sees an army advancing. ‘Uneasy lies the head that wears a crown’ [Shakespeare, Henry IV, Part II] is an old adage that is beginning to seem appropriate to my condition.”
“I can see how worried you are, Chick. I also respect your judgment, experience, and intuition. I have to ask: do you have any concrete evidence that the house of cards is about to topple?”
“Good question. Maybe I’m just being an old lady about all of this. But, there are definitely hints. I have an appointment with the IRS on Thursday, and they want me to bring my staff and all of our records for the past four years. They told me to expect an audit that will involve me for at least four or five days. Otherwise, they were mum about what they have in mind. I got a head’s up call from an old friend of mine in the FBI. He’s the SAC of the FBI’s East Coast securities fraud division. He warned me that an investigation of the consortium was in the offing, and maybe I should come into his office and have a chat about what’s been going on. Some investigator from the SEC OCIE [Office of Compliance Inspections and Examinations] gave Carl Midgely, the head of the legal division—I think you know him, right?—a subpoena.”
“I’ve met him. Seems like a nice enough guy.”
Chick nods.
“I guess I interrupted myself. I was about to say that Carl and I got a ‘friendly’ call suggesting that we drop by his office for a chat about some things he has been hearing from floor officials at the NYSE [New York Stock Exchange]. Carl told Martin Dilworth. Carl told me that the CEO just said, ‘We have to circle the wagons.’ Martin called for an off-the-record meeting of the executives tomorrow morning in the adults-only pool; so, no one can record what gets said. I have a scuba diving waterproof case where I can hide my recorder. No one will suspect me. This will be one meeting I have to record.”
“Chick, maybe you ought to get on the record as being opposed to the questionable practices going on in the consortium. That would give you either some leverage or an excuse if the feds really do come down hard.”
“I understand what you’re saying, Cecil, but you know as well as I do that it is not that simple. One such utterance and I would be out on my can. Maybe worse. From way out there in little unimportant Utah, maybe you could look into what happened to two people in corporate during the last two months. The names are Owen Singleton and Patricia Ann Bethers. Owen used to work on the R&D for Mastcakil at ZyterBrothersTechnologies, and Patricia was Dilworth’s executive secretary. The two of them were suddenly gone from the consortium about a week apart. I poked around very, very cautiously. Owen was a thirty-two-year-old health nut who did triathlons four or five times a year. Patricia was a twenty-eight-year-old divorced mother of two little girls. Other than for obstetrical care, she never saw a healthcare provider in her entire life. Owen had a heart attack according to his death certificate, and Patricia was killed in a hit-and-run accident. No investigation ever took place in either case.”
“Man, Chick, that’s beginning to sound pretty ominous. Maybe there’s a perfectly innocent explanation. Maybe it’s just coincidental that the deaths happened right about the time that the federal agents began to suggest that maybe the consortium’s practices are being scrutinized, and there is some suspicion.”
“I want to think that, too, Cecil. But, as I have lived in the corporate world most of my adult life, I have come to believe that there is no such thing as a coincidence. I’m going to go out on a limb and presume on our friendship. I really think we are friends, and I need one right now.”
“I’m your friend, Chick. I presume that you are going to ask me to do something to watch your back. That goes both ways. You’re making me pretty nervous, and it is beginning to sound like I need to take measures to protect myself and Andrea.”
Chick is now completely serious.
“We have to trust each other. Cecil, I am going to place my life in your hands. I could possibly be just melodramatic, but I don’t think so. I have taken out a kind of insurance policy against legal problems. I told you that I recorded the secret executive staff meetings. Well, I also made flash drive copies of everything in my computer—that’s enough to put every member of the executive elite in prison, including me. I have pretty much free access around the top floor at the consortium building. I took an extreme risk and made a copy of Martin Dilworth’s hard drive. I have copies of both flash drives in my swim bag in the dressing room. I want you to have a copy of them, just in case.”
Cecil is a bit shaken.
“In case of what, exactly?”
“In case maybe I have an accident or a sudden unexplainable heart attack. I knew Owen and Patricia pretty well, and I do not want to end up like them. I have leverage; but w
ho knows what might happen to me, even with it? Besides saying that you need to find an extremely safe and secure hiding place for the thumb drives, I want to ask a serious favor of you.”
“Glad to help, if I can.”
“Okay, Cecil. For both our sakes and for our wives, we need to get a good private eye to look into the deaths of Owen and Patricia. I can’t appear to be involved. I am under the magnifying glass at corporate headquarters. I know they have hacked my computer and have records of everything on it. I know this sounds paranoid, but I think I’m being followed.”
“That is downright scary. Oh, my heck, Chick. It boggles my mind. I’m just a little old drugstore proprietor out in the hinterlands—in the West which never even seems to make the national news. We need to set up a quickie hard-to-trace dummy corporation to get enough money to hire investigators, accountants, and the like; so, we can travel under the radar while we gather data.”
“You know what a whistleblower is, Cecil?”
“Sure. Somebody who rats on his corporation or section of government to get some illegal practice out in the open.”
“That’s about it. But there are laws to protect whistleblowers from reprisal and to get them immunity from prosecution. You and I are going to have to get that kind of protection. One thing I know is that the first person to report to the feds is the one who gets the immunity. There is a law that says that specifically.”
“That’s what the police and the FBI have done ever since Rudolph Giuliani took on the mafia,” Cecil says. “The little guys save themselves, and the capos and mafia dons go to prison.”
“And all too many of the mafia soldiers who rat get killed or go missing,” Chick says somberly. “We have to be incredibly careful. I would jump at the chance to be a whistleblower, Cecil, but I’m not ready. There has to be more evidence, and I have to set aside enough money for Elisa and me to have some sort of future when I do blow the whistle. We’ll have to enter the Witness Protection Program when we do.”
Another Whistle Blower Page 3
