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April 9th, 2015

The Angry Fallout from the AIDS Healthcare Foundation Scandal

Michael Weinstein, the polarizing and famously litigious head of AIDS Healthcare Foundation (AHF) just got a taste of his own medicine when a stunning Whistleblower lawsuit against AHF filed last year was unsealed and made public.

Michael WeinsteinThe 34-page suit, brought by three former staffers who claim they were fired when they raised questions of financial impropriety, charges the agency with ten counts of defrauding the government, conspiracy, and a “multi-State kickback scheme” to maintain service quotas and keep the government-funded gravy train rolling.

In exclusive interviews with My Fabulous Disease, one of the plaintiffs, Jack Carrel of Louisiana, his lead counsel Theodore Leopold, and several prominent figures in the HIV arena spoke out about the details of the charges and what the lawsuit could mean for the beleaguered head of the country’s largest provider of HIV clinical services.

A “CRIMINAL EFFORT”

The plaintiffs accuse AHF of an “organizational-wide criminal effort” across at least 12 States in the form of kick-backs to AHF clients and staffers. They believe that AHF has defrauded governmental programs out of tens of millions of dollars, based on their own experience with the agency going back to at least 2010.

The three plaintiffs, all former managers at AHF who were in a position to be familiar with agency policy, also include Mauricio Ferrer of Florida and Shawn Loftis of New York.

When someone tested positive in an AHF clinic, the suit claims, they were offered cash or other inducements to be linked to care in AHF clinics. Furthermore, AHF staff were provided commissions when they successfully linked someone with a positive test result to AHF services. This procedure was developed first in Los Angeles and then spread across all States where AHF has a presence.

The policy wasn’t exactly clandestine. In fact, it was written right into the “AHF Linkage to Care Training Manual” included as an exhibit in the lawsuit (partial snapshot below).

AHF Doc 2b

This kind of incentive is flagrantly illegal. Defying the Federal Anti-Kickback Statute is a felony offense. Grant monies received from the government, such as through the Ryan White CARE Act, CDC, or other HHS programs like Medicare, strictly forbid kickbacks.

The Anti-Kickback Statute ensures “there are no behind-the-scenes shenanigans for profit reasons,” said lead counsel Theodore Leopold of Cohen Milstein, the firm representing the plaintiffs in the case. “The Federal law is quite clear. We want to be sure the clients are getting proper care and treatment.” Medical decisions should be for the betterment of the patient, Leopold said, “and not to put money into AHF’s pockets.”

“This case is about AHF gaming the system,” Leopold said. He explained that kickbacks “can lead to an over-utilization of services, corrupt the process, and exploit the population most in need of services.” The suit claims that although AHF was formed as a not-for-profit agency, it “exhibited a for-profit corporate mindset and a voracious appetite for any and all revenues associated with HIV patient referrals.

“We are seeking monetary recovery on behalf of the government for funds,” Leopold said, which the suit contends were billed through improper means.

ONE PLAINTIFF SPEAKS OUT

Jack Carrel holds a Master’s Degree in Public Health and is working on his doctorate. He came to AHF in 2012 after working in the HIV field for nearly 30 years. He is also HIV positive and feels a strong connection to those testing positive and seeking services.

Jack Carrel 3As Director of Public Health for AHF’s Southern Bureau, Carrel questioned the financial incentive policy that directed people who tested positive into AHF clinics, but was “assured it was perfectly fine,” Carrel said. “And then when we had meetings with funders, other (AHF staffers) in the meeting would tell funders that we would invite clients to use any other clinic they wanted, and I knew that wasn’t true.” Carrel was fired after objecting to the “linkage to care” policy.

“I tried to do something about it and I wasn’t able to,” Carrel said. “I’m HIV positive and I work in this field. I want people to be in care and to achieve viral suppression. But this system didn’t give clients the choice for getting services where they wanted.”

People who have just received HIV positive test results are often in shock, emotionally vulnerable, and susceptible to nearly any suggestion. AHF staffers were financially rewarded for influencing their clients’ healthcare decision-making, according to the lawsuit. They allegedly plied clients with money, free fast-food lunches, and rides directly to AHF clinics.

Attorney Leopold is careful to point out that this is a civil matter and not a criminal one. A tepid statement released by AHF in response to the suit contends they did “nothing wrong” and use as proof of their innocence the fact that the government has declined to intervene in the legal action.

The mere fact the government has not, as of yet, chosen to intervene “is no reflection on the validity of the case,” contends Leopold, citing that this is not uncommon when there is already outside counsel involved. In other words, the government may be more than happy to allow this lawsuit to do the legwork for them and then use it to build a case for later criminal charges.

“WE WILL SUE YOU!”

The lawsuit places much of the responsibility for the AHF scandal squarely at the feet of Michael Weinstein who, at a 2013 AHF Leadership Summit, personally advocated for increased “positivity rates,” more linkage directly to AHF services, and “the payment of financial incentives to patients for the purpose on inducing self-referrals to AHF medical care,” according to the suit.

The irony of the Whistleblower action is the rich history AHF has of threatening others with litigation. Under the direction of Weinstein, AHF participated in their own, profitable Whistleblower lawsuit against Bristol-Myers Squibb in 2010 and Weinstein has always used potential litigation toward others as a playing card.

(Weinstein has also engaged in expensive petitions to mandate condom use in porn, called the pre-exposure prophylaxis [PrEP] medication Truvada “a party drug,” and taken out full page ads that significantly misrepresent PrEP efficacy findings, all to the consternation of his peers.)

The animosity Weinstein has engendered among other HIV advocates can be traced back for decades. Sue Crumpton served as the director of LA Shanti, the first HIV support agency founded in Los Angeles, from 1992-1998. She remembers L.A. County planning council meetings “filled with drama, courtesy of Mr. Weinstein.”

“Michael never showed up to Planning Council meetings unless there was grant money on the table,” Crumpton said. “And then if things didn’t go his way, his first response was to say ‘we will sue you!’ The other agencies didn’t have the resources to respond to a lawsuit, so he would get his way.”

PrEP activist and former AHF poster boy Eric Paul Leue, who broke ties with the agency after Weinstein’s widely maligned objections to PrEP, has little patience with such tactics. “AHF has sued counties, cities, and departments of health, and has bullied smaller organizations into submission with litigation that real non-profits cannot afford to fight,” he said.

Leue relates the story of AHF attorney Samantha Azulay who, during a case in which AHF fought to have funding taken away from a small organization serving Los Angeles youth, stated that “maybe you’ve got to cut up a couple trees to save the forest.”

“That’s what it comes down to,” said Leue, who began a #RemoveWeinstein petition last year. “AHF leadership is the forest and they do not care about the community. They care about their bottom line of one billion dollars per year.”

Weinstein’s litigious nature and the sheer size of his agency intimidated plaintiff Jack Carrel and gave him pause when considering what to do about the policies he knew to be wrong. “AHF is a very big organization,” Carrel said. “And I’m one HIV educator. So that was, and still is, scary.”

“A THUG AND A CROOK”

Weinstein’s battles with HIV advocates and agencies have largely marginalized him from HIV advocacy circles, where he is derisively known as the Tea Party of the HIV movement.

Lifelong HIV activist Peter Staley (How to Survive a Plague) believes the legal fallout from Weinstein’s actions is long overdue. “For those of us who have been fighting Michael Weinstein from day one,” he said, “when he started ignoring the great legacy of science-driven AIDS treatment activism, this lawsuit couldn’t have come soon enough. And yes,” he adds, “it feels like payback.”

Long term AIDS survivor Michael Petrelis, whose own blog The Petrelis Files is best known for holding HIV service agencies accountable by publishing their IRS 990 forms, has long criticized AHF for failing to post its 990 on their agency website.

“It’s possible the charges in the lawsuit are just the tip of the iceberg,” Petrelis said. “Since AHF is a behemoth with national and global offices – not to mention lobbyists in Washington – and negotiates directly with drug manufacturers among its various endeavors, there should be an AHF Watch Network… keeping a close eye on the organization, its Board and executives.”

Peter Staley is already writing Weinstein’s professional obituary while remaining concerned for the well-being of thousands of AHF clients. “We knew Weinstein was a thug and a crook,” he said, “but his downfall will be bittersweet, because it could also bring down the empire he built, which includes lots of HIV/AIDS specialists and thousands of low-income patients.”

“If I were on the AHF Board,” Staley adds, “I would quickly clean house. All of this can be set right once Weinstein is gone, and AHF can live on under new management.”

Plaintiff Jack Carrel thinks that, were something catastrophic to happen to AHF, “other agencies would step up” to fill the needs in service. And when asked if Weinstein deserves to keep his job, Carrel will only say that “when you’re CEO of an organization, you are responsible for what it does.”

Removing Weinstein may actually become an imperative for the AHF Board, Sue Crumpton believes.

“Michael always cultivated his own Board, which acquiesce to his whims, and he has always served as its Chair,” she said, “but those other Board members also have a fiduciary responsibility to the agency. They could be held personally liable for this lawsuit. A Board can be ensured against many things, but negligence is not one of them. If they don’t seek to remedy this situation, in my opinion, they are negligent.”

For his part, lead counsel Theodore Leopold isn’t particularly shocked by the alleged unlawfulness of AHF policy. “I’ve been doing this a long time,” he said, “so not too many things, as it relates to corporate greed, surprise me.”

Mark

(Photo credit of Michael Weinstein: Mitchell Zachs/AP)

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13 Responses to “The Angry Fallout from the AIDS Healthcare Foundation Scandal”

  1. David R. Littlefield Says:

    April 9th, 2015 at 7:47 pm

    Improprieties and rumors of dishonesty have surrounded M Weinstein for a long and unanswered questions like How is AHF able to afford building totally new stores while giving 98% to charity?, and how does it have manpower and resources to demand condom use in the porn industry!

  2. Dick Anonymous Says:

    April 10th, 2015 at 1:33 am

    I knew it! They tried to charge me double for a medication I could buy at RiteAid. Its always been covered until they recently acquired my Pharmacy. I have some suspicious charges I need to look into.

    They are trying to acquire any and all specialty pharmacies as it would seem! Can someone recommend another Specialty Pharmacy with overnight delivery? I hate to change but, I don’t want anything to do with CROOKS!

    I hope the BOD is reading this! Keep us posted.

  3. Simon A.Rawicz Says:

    April 10th, 2015 at 2:17 am

    For nearly 20 years, the Greek ACTUP based in Athens has abused and violated the rights of the workers, volunteers and people it claimed to have protected as they covered up and defrauded the state and EU of resources for their own gain.

    Two members of the Board of Directors illegally pretended to be Doctors to gain illegal access to highly sensitive medical data to which they were allowed to use for their own gain by the Greek CDC who employed them and funded them with impunity.

    When this was exposed by myself and two others in 2009 they then tried to illegally sue those who exposed them and claim to be victims of a smear campaign to appear the ‘victim’.

    This was in turn allowed and covered up for this period by the other NGO’s connected with this NGO as they all worked alongside them.

    Many International Organisations and other HIV/Aids NGO’s who also affiliated themselves and worked with these people all sat back and allowed this to happen for nearly 20 years and it can only raise further questions to how this sector abuses these people for it’s own gain in order to have a ’cause’ to keep the same self serving people in a job which allows them to abuse and manipulate those with HIV/Aids throughout society at a whim.

    This case has also revealed how the CDC, the press and some of the media here have been threatened and used by these people to try and cover this up and shows the severity of the malpractice to which these people have been allowed to practice for so long.

    The fact that they illegally sought access to the HIV data of those within Greece for no reason other than their own gain shows how brutally exposed people suffering have become should people choose to abuse them, their trust and their confidentiality.

    http://fckdupathens.wordpress.com/the-truth-actup-greece/

  4. Seaguy Says:

    April 10th, 2015 at 8:46 am

    Weinstein is not fit to run the AHF and should be removed from his position and fired. In addition to the stuff above he has been spending millions on a wasteful and totally not HIV carer related campaign to ban porn.

    Weinstein if a pathetic lying thief.

  5. Robert allen Says:

    April 10th, 2015 at 12:40 pm

    Well! Two sides to every story. I wonder how this plays in to AHF not getting RW funding?
    What is next burning at the stake. I am a client of AHF which is the best clinic I’ve had in quite a long time. I would bet there’s a big bad wolf at the root of this.
    When your at the top Of your game there will always be those who are out to do you in. Stop whingeing and focus on the job at hand

  6. Wendell Swaithes Says:

    April 10th, 2015 at 12:43 pm

    When does all the corruption end? I have known Jack Carrel personally for some time now. I have seen the sacrafices he has made, often neglecting his personal life in order to see that exceptional care and facilities were up to his standards. He is not a “whistle blower” he is a hero.

  7. Robert allen Says:

    April 10th, 2015 at 12:50 pm

    To the guy worried about his pharmacy,
    I thought everyone knew about AVITA. I love Anna’s pharmacy (AHF) simply because it’s in AHF waiting room but used AVITA for years. Their service is great

  8. lm2 Says:

    April 13th, 2015 at 12:41 pm

    This is nonsense.
    FACTS about the Issue:

    1. The provision of small incentives to patients in order to help link them to care is appropriate, legal and necessary keep them in care and healthy.

    2. Such incentives are an extremely common mainstay of government-funded programs across the country and the world.

    3. Performance-based commissions paid to employees are legal and proper.

    4. AHF uses all funds derived from patients who use our programs to increase our services.

    5. Many partner agencies rely on AHF linkage services to ensure that patients receive immediate access to medical services, usually within 72 hours of diagnosis.

    6. There is consensus in the public health community that targeting testing to find the most positives is desirable.

    7. 60% of Americans living with HIV are not in routine care and according to the CDC they are responsible for 91% of new infections in this country.

    FACTS about AHF:

    8. Based on multiple independent audits, AHF spends 96% of its revenue on client services.

    9. More than 40,000 clients in the United States and 415,000 clients worldwide have chosen to come to AHF for care and their satisfaction with our services overall is extremely high.

    10. AHF distributes more condoms, conducts more tests, links more patients, and provides more care than any other program in the United States or the world.

    (Thanks for your cut-and-paste of the AHF press release. What a shame #11 does not state “Will sue or withdraw funds from any person or organization affiliated with them who questions the legality of our actions.” — Mark)

  9. AHF’s Weinstein on Florida Lawsuit: 'We Did Nothing Wrong' (Special Report) - Frontiers Media Says:

    April 13th, 2015 at 2:43 pm

    […] those of us who have been fighting Michael Weinstein from day one,” longtime AIDS activist Peter Staley told Mark S. King for King’s “My Fabulous Disease” blog on Thursday, “when he started ignoring the great […]

  10. blow that whistle, baby Says:

    April 13th, 2015 at 9:50 pm

    Incentives to “reward” patients and keep them in care are, indeed, legal and part of HIV prevention grants. No question about that.

    Two points though on separate, but related issues:

    1) Those program grants that do include incentives as rewards, do so for patients, NOT for staff. I cannot think of any HIV prevention program grant that has staff incentives as a budgeted line-item.

    2) “Linkage” in the world of HIV prevention refers to the successful attendance to the first (and sometimes second) doctor’s appointments after testing positive. It is a measure in the HIV continuum of care. AHF incentives to staff specify under no unclear terms that those “linkage bonuses” given to staff are to be paid to staff ONLY IF the patient signs up for AHF healthcare center services. No “bonus” for staff was to be given if the patient linked to another clinic/doctor. The deliverable was not “to link a new positive to care”. It was always “to link a new positive to AHF care only”. Success was not measured and incentivized in terms of pure linkage to appropriate services.

  11. Lc3 Says:

    April 13th, 2015 at 10:56 pm

    But seriously listen to the accusations : “Ahf is incentivizing hiv testing to boost positivity rates” and that is being portrayed as some sort of fraud or scam??? !!! Isn’t getting hiv positive people detected and linked into care a good thing? Where is the “fraud”?

  12. Box Turtle Bulletin » AHF’s Michael Weinstein mocks the CDC about PrEP Says:

    December 22nd, 2015 at 1:14 pm

    […] they feed a stream of income into the organization. In April of this year, three former staffers filed a whistleblower lawsuit against […]

  13. Inside Jill Stewart’s One Percenter Bubble – Red Line Reader Says:

    February 17th, 2016 at 7:41 pm

    […] name of the people that she is actively seeking to disenfranchise. She and her universally-beloved financial backers at the AIDS Healthcare Foundation portray themselves as crusading heroes for the little people of […]

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