RMC whistle-blowers will share $8.1 million reward

Jim Schultz

Published: January 08, 2004 in News 
Two men who tipped off the FBI that two heart specialists were allegedly performing unnecessary procedures at Redding Medical Center will receive $8.1 million, U.S. Attorney McGregor Scott announced Wednesday.

The Rev. John Corapi, 56, who moved away from Redding this past summer, and his longtime friend and Las Vegas-based accountant, Joseph Zerga, 61, will receive the award under the federal False Claims Act based on their whistle-blower complaint, Scott said.

That sealed complaint was filed in U.S. District Court in Sacramento less than a week after FBI agents raided the offices of Drs. Chae Hyun Moon, 56, and Fidel Realyvasquez Jr., 55, on Oct. 30, 2002.

Corapi and Zerga reported the alleged unnecessary heart procedures that July to the FBI, which began a Medicare fraud investigation.

No criminal charges have yet been filed in the case, which remains under investigation by the FBI and other agencies.

The $8.1 million award, which is expected to be paid within 30 days, comes out of a record $54 million settlement that was reached in August between the federal government, RMC and its parent corporation, Tenet Healthcare Corp.

That agreement was reached to settle civil claims filed in connection with the procedures.

Last month, the Santa Barbara-based Tenet announced that it had agreed to sell the 238-bed Redding hospital, which was facing the loss of Medicare and other federal health care program reimbursements.

Redding attorney Dugan Barr, who represents Corapi and Zerga, said Wednesday they were entitled to the award.

"They are the ones who got this stopped," he said. "If it weren't for them, that grist mill would still be going on East Street."

U.S. Assistant Attorney Michael Hirst agreed Wednesday that the men played key roles.

"Their (Corapi and Zerga) willingness to blow the whistle on fraud resulted in our putting a stop to the surgeries and recovering $54 million," Hirst said.

The negotiated $8.1 million sum represents 15 percent of the $54 million settlement and is the statutory minimum for which whistle-blowers are generally eligible under the False Claims Act.

That federal act, which was enacted in 1863, provides that an individual who reports instances of the government being defrauded can share in the government's recovery amount.

Hirst said the government could recover damages of up to three times the amount lost due to fraud as well as penalties for each fraudulent claim submitted to the government.

Generally, he said, whistleblowers are eligible for between 15 percent and 25 percent of the total recovery sum.

Barr said he believed the 15 percent award was an appropriate amount, noting that the highest whistle-blower payment he's aware of was 17.5 percent.

"It's a lot of dough, but they stopped a terrible thing," he said.

Corapi, a Catholic priest, has said he was seen by Moon, who performed cardiac catheterization on him and then recommended he undergo immediate heart bypass surgery at RMC.

Corapi sought the opinions from out-of-area physicians, who said that he did not need it.

Hirst said Corapi complained unsuccessfully to RMC officials about Moon's recommendation before notifying the FBI.

Meanwhile, Redding physician Patrick Campbell, who also provided much of the documentation used to obtain the search warrant used in the FBI's raid, was dismissed in September as a whistleblower in the case. He is appealing that ruling.

He could not be reached Wednesday for comment.

His attorney, David Rude, contends, however, that Corapi and Zerga were victims in the case and that it was Campbell who provided true "insider" information as described in whistle-blower statutes.

"We don't begrudge them the settlement," Rude said Wednesday. "They made a contribution."

But, he added, it was Campbell who provided the crucial information that was needed for the search warrant.

"Without the medical testimony, there never would have been a case," he said. "Dr. Campbell is legally, equitably and morally entitled to at least as much."

Reporter Jim Schultz can be reached at 225-8223 or at jschultz@redding.com.

Reporter Maline Hazle contributed to this article.
 

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