A couple of weeks ago, I wrote (Different Strokes, Indian Express, April 19,2003) about pharma giant Bayer AG paying $257 million after pleading guilty to a criminal charge involving a scheme to overcharge the American Medicaid programme for the antibiotic Cipro.
I had written that the fraud was exposed by an unnamed whistle-blower, who told the authorities how Cipro was relabelled and sold to Kaiser Permanente with a different drug identification number, in order to be able to charge more money.
On reading the item, Prof. Manubhai Shah, Chairman Emeritus of the Consumer Education and Research Centre (CERC), Ahmedabad, sent me a very touching piece from the Corporate Crime Reporter (Vol.17 No.16 dated April 21, 2003, published from USA) about this "unnamed whistleblower".
He was George Couto, a Marketing Executive of Bayer who died of pancreatic cancer in November 2002, a little before Bayer's capitulation. According to Corporate Crime Reporter, this is how it all started: "On February 9,1999, George Couto a Bayer corporation Marketing Executive attended a mandatory ethics training at a Bayer office in Connecticut. The training session was kicked off by a video address by Helge Wehmeier, the head of Bayer's entire US operation.
'Everyone is expected to obey the law-not only the letter of the law but the spirit of the law as well', Wehmeier told the assembled Bayer executives. 'You will never be alone to adhere to the high standards of the law. Should you feel prodded, speak to a lawyer, or call me. I am serious about that.'
The assembled employees in the room erupted into laughter. But Couto had something on his mind. He knew that Bayer had engaged in an elaborate scheme to defraud the Medicaid programme out of $100 million".
The report says that "two days after the ethics training class Couto wrote a one paragraph memo to his boss asking how the company reconciled the Medicaid Scheme with the company's expectation to adhere to the spirit and letter of the law. No one ever got back to him".
So he decided to pursue the matter elsewhere. He sought legal assistance from Neil Getnick and Lesley Skillen, partners at Getnick & Getnick in New York City and Scott Tucker of Boston. Corporate Crime Reporter (CCR) says, he filed a lawsuit against Bayer in early 2000 and quit the company soon after.
The case was filed under seal. In April 2002, Couto, age 39, was diagnosed with pancreatic cancer. He knew he was going to die, but wanted to make sure the case would not die with him.
So his lawyers, over the strenuous objections of Bayer's lawyers, demanded the Couto be deposed on videotape. In August 2002 he was deposed and withstood a gruelling cross-examination".
Getnick told CCR, "In my opinion, all the cross-examination did was to underscore the strength of the case and demonstrate what an extraordinary person George was".
As a litigator, he believed that nobody in that no defendant would have wanted that tape played before a jury in trial. George Couto's testimony helped resolve the case within months thereafter.
Couto died in November 2002. But in early April, his wishes came true as Bayer pleaded guilty to one federal criminal count and agreed to pay a $ 5.5 million criminal fine. The company also agreed to pay $ 251 million to settle Couto's civil False Claims Act case.