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General News    H3'ed 7/6/11

The Inside Story of Medicare Fraud at a Major University

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Message Roger Shuler

Cross Posted at Legal Schnauzer

The new president of the University of Kentucky was the chief academic officer during a time of "rampant" research fraud, according to federal whistleblower lawsuits filed in the Northern District of Alabama.

Eli Capilouto, the former provost at the University of Alabama at Birmingham (UAB), was named Kentucky's president on May 3 and  assumed the position this week. Did anyone in UK's power structure, before making this hire, bother to examine Capilouto's ties to research fraud that one whistleblower estimated at $600 million? The answer apparently is no. Such an examination would have yielded some disturbing information, and the UK hierarchy must have taken a see-no-evil approach to its presidential search.

UK has set a goal to become a top 20 public research institution, and a university press release about Capilouto's appointment touts his connections to UAB's booming research enterprise, which attracts about $460 million a year in external support and helps the university rank No. 20 in funding from the National Institutes of Health. UK officials might have been wise to take a closer look at how UAB rakes in all of those dollars--and at what role Capilouto might have played in misconduct that is a matter of public record.

Were the UAB whistleblowers "disgruntled insiders" or did they have legitimate concerns? Well, the university paid $3.4 million in 2005 to settle the complaints with the federal government, and that indicates something, indeed, was amiss.

According to public documents, Capilouto served as provost during at least two years of the wide-ranging research-fraud scheme. And those same documents state that the provost's office had played a central role in UAB's handling of funny money.

To be sure, the fraud problem on Birmingham's Southside did not start with Capilouto. One of the whistleblowers, forensic accountant and former UAB research-compliance officer Thomas Gober, filed his complaint in 2001 and said the fraud had been going on for at least 10 years. That means the fraud dated to the early 1990s, maybe earlier, and Capilouto did not become interim provost until September 2002.

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I live in Birmingham, Alabama, and work in higher education. I became interested in justice-related issues after experiencing gross judicial corruption in Alabama state courts. This corruption has a strong political component. The corrupt judges are (more...)
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