(Nov. 7, 2006) -- A federal investigation into alleged fraud by prominent Las Vegas doctors and lawyers appears to be moving forward. The Eyewitness News I-Team first reported on the probe last year.
At stake are tens of millions of dollars, perhaps hundreds of millions. Little has been heard about the investigation for the past several months.
One year ago this month, a federal grand jury issued subpoenas to more than 20 high profile doctors, lawyers, and related firms, seeking evidence about an alleged massive scheme to defraud clients, patients, and insurance companies.
The group reportedly refers to itself as the "medical mafia". Those who received subpoenas have reportedly floated the story that the probe is over and no charges will be filed. From what Eyewitness News has learned, that appears to be untrue.
At the center of a three-year FBI investigation is a former military medic named Howard Awand. He's been described by local doctors and lawyers as a medical fixer and facilitator. Awand's close associates include some of the biggest names in Las Vegas law, such as personal injury attorney Bob Vannah, who says his firm raked in $100 million in a single year, and Robert Eglet of Mainor, Eglet, Cottle, who was recently Nevada's trial lawyer of the year.
Like Awand, Vannah and Eglet previously worked as defense lawyers for the insurance companies. All three have since switched sides and have secured some of the largest jury awards in memory, in part because the middleman, Awand, has been remarkably successful in obtaining the cooperation of prominent local doctors.
The doctors allegedly refer their injured patients to the lawyers, then jack up the bills with tests and surgeries before testifying at trial as expert witnesses. The FBI suspects the lawyers of paying cash kickbacks to the doctors through Awand. There is no question the FBI is hot on the trail.
After Cynthia Johnson got into a fender bender a few years ago, her doctor sent her to Awand and then to Vannah. Johnson and at least five other former patients and legal clients have told us they have talked to the FBI, including one patient who said as much while in a sworn deposition.
Sources close to the probe say the FBI recently doubled the size of the team working on the case because the more digging they do, the bigger the case gets. They have thousands of pages of financial documents obtained via last year's subpoenas, including Awand's billing statements to lawyers.
Contrary to the claims of some who are in the FBI's cross hairs, the probe is not dead. The I-Team has learned that target letters have recently been mailed to some of those on the subpoena list, informing them that they are under investigation.
U.S. Attorney Dan Bogden won't talk about the case except to say he has a special team of prosecutors for this type of alleged fraud. When the I-Team's Colleen McCarty asked FBI honcho Steve Martinez whether the case was going away, his answer was telling.
"Well, we have ongoing investigations and 'm not really in a position where I can discuss ongoing investigations, but I can tell you those kinds of schemes exist in a lot of communities. We have white collar resources here to address those types of situations specifically, and we are very aggressive about going after that kind of thing, especially when you've got people in positions of trust who are willing to compromise that trust. We look at that very hard," said Steve Martinez, FBI special agent in charge.
Other kinds of evidence that might have fallen into the hands of FBI agents could include a video shot at the wedding of one of the doctors on the subpoena list. Invited guests included Bob Vannah, Howard Awand, Robert Eglet and his wife and law partner Tracy.
During toasts to the happy couple, there is a cryptic message. Bob Vannah says, "Have a wonderful marriage, 7 days a week, 24 hours a day, 365 days a year." Howard Awand responds, "That's exactly right. And it will be worth at least $4-and-a-half million dollars."
If it sounds like an odd toast at a wedding, that's because it had nothing to do with marriage. Knowledgeable sources say the doctor who got hitched that day had recently been a key player, along with the others, in a large personal injury case that resulted in a $4 million award.
The I-Team has learned that the grand jury is slated to begin hearing testimony next month, and this might be something that will pop up during questioning.
At this point, no indictments have been issued, nor is it certain that any will. However, federal agents and prosecutors are working night and day on what is described as a gargantuan case.