The Institute for Cancer Prevention (IFCP), formerly the American Health Foundation, was hailed (in a press release by New York Senator Charles Schumer) as "the only National Cancer Institute designated cancer center exclusively devoted to cancer prevention research." The Institute was described in a New York Post article (not on the web, Edelman S. Cancer scandal: bankrupt institute blew $5M. NY Post, Oct 3, 2004.):
Known for its early research linking smoking and cancer, the IFCP was the only government-supported center that focused solely on prevention.
It was respected for groundbreaking work on how diet can prevent cancer, touting the benefits of soy, garlic, zinc, tea and low-fat foods.
The institute boasted Rudy Giuliani as guest speaker at its last fund-raising gala, and Bill Clinton came to accept an award given to his wife, Sen. Hillary Rodham Clinton. Whoopi Goldberg hosted an event in 1998.
In February, Sen. Chuck Schumer called IFCP 'one of the world's very best research facilities.'
But in 2004, the Institute abruptly and unexpectedly declared bankruptcy, again per the NY Post,
Financial problems cropped up in 2000 when the institute had to repay the government's National Cancer Institute $4 million in overspent grants.
But the problems continued, culminating in a terse letter to [ICFP President Dr Daniel] Nixon from the institute on Sept. 9.
The letter, written by NCI grant manager Leo Buscher, said the IFCP 'improperly withdrew $5.7 million and inappropriately used those funds for non-grant-related expenses.'
He told The Post the funds should have been used only for researcher salaries, animals and lab supplies, but were diverted to cover the institute's overhead expenses.
'It was a surprise it had gotten so bad and so big,' Buscher said of the overspending.
Increasingly generous executive pay and high rent were biting into the institute's $18 million budget.
Nixon raked in $403,000 in salary and benefits in 2002, according to the latest tax returns filed.
A half-dozen other managers and consultants got $150,000 to $286,000 a year, the records show.
Last year, the institute left a cramped office on the East Side near 42nd Street and leased 15,000 square feet at the Gorham Building on Fifth Avenue and 36th Street.
A subsequent NY Post story suggested that the Institute's President lived the good life at Institute expense while the money was being diverted (not on the web, Edelman S. Wine-&-Dine cancer doc; his institute hits bottom $. NY Post, Oct 10, 2004.)
Dr. Daniel Nixon, a noted cancer doctor whose patients included Jimmy Carter's mom and Atlanta Braves players, was living high as New York's prestigious Institute for Cancer Prevention collapsed around him, The Post has learned.
Nixon, 61, the IFCP president who was paid more than $400,000 a year, enjoyed a full-time chauffeur and leased a car at the institute's expense.
A nutritionist who touted raspberries and strawberries to prevent certain cancers, Nixon jetted around the country to wine and dine 'potential donors,' said sources familiar with his expense vouchers.
Note that the bankruptcy of the Institute was covered in a news item in Science. As far as I can tell, it was never covered in the national media, particularly in the NY Times or the Washington Post, or in any medical or health care journals.
In early 2007, the US Attorney for the Southern District of New York announced a settlement:
Michael J. Garcia, the United States Attorney for the Southern District of New York, announced today that Dr. Daniel Nixon, former president of the Institute for Cancer Prevention ('IFCP'), IFCP’s former officers, and the former members of IFCP’s Board of Trustees have agreed to pay $2,300,000 to resolve civil False Claims Act charges and any other civil claim arising from IFCP’s alleged unlawful receipt and use of federal grant money. In addition, Tatum, LLC ('Tatum'), a financial services firm, has agreed to pay $400,000 to resolve civil claims arising from its services to IFCP. Finally, Weiser, LLP ('Weiser'), IFCP’s outside auditor, has agreed to pay $500,000 to resolve negligence claims relating to its audits of IFCP.
The settlement acknowledged:
During calendar years 2002 and 2003, however, IFCP drew down approximately $5 million of federal grant money to pay bills that were not eligible for reimbursement under its federal grants. In addition, IFCP submitted false financial reports regarding its draw downs to the United States Department of Health and Human Services ('HHS').
But of course,
The settlement does not release any of the parties for any violation of the criminal laws. None of the parties making payments under the settlement agreement has admitted any liability or wrongdoing in connection with the settlement.
As far as I can tell, the settlement received no local, much less national news coverage.
What brought all this to my attention was yesterday's AP story (in Newsday).
A bankrupt cancer research center's former finance chief has admitted lying to FBI agents investigating whether the institution misused federal money.
'I am truly sorry, and I accept responsibility,' Roy Victor said as he pleaded guilty in U.S. District Court Wednesday to obstruction of justice. He faces a possibility of up to 10 years in prison at his sentencing, set for April 18.
Victor, 44, was the Institute for Cancer Prevention's chief financial officer from November 2001 to May 2003. Federal authorities started questioning him in November 2004, two months after the Valhalla-based institute filed for bankruptcy. Federal auditors had found that the research center had improperly sought to use grant money for expenses not related to the grant's purpose, according to court papers.
Victor acknowledged lying when he told federal investigators the institute had not submitted false statements to hide improper requests to draw on $6 million in Health and Human Services Department grants.
This sad tale illustrates what I suspect is an all too common phenomenon. In a go-go, get rich quick, narcissistic culture, in an economy in which health care has become a $2 trillion a year "industry," and in a business climate that worships the "imperial CEO," many respected health care organizations and institutions have been taken over by the wrong sort of people. Their leaders often at best have no understanding or sympathy for the health care mission and health care ethics. At worst, some of their leaders are criminal (see, for example, Mr Victor above) and corrupt. Leaders interested first in short-term financial gain and lining their own pockets are weakening, and in this case of the Institute for Cancer Prevention, have destroyed, some of our best and most revered health care institutions.
Until we make the governance of health care organizations more transparent, accountable, ethical, and respectful of the organizations' missions, things will continue to go down hill. And until physicians, policy makers and the public become aware of the damage being done by ignorant, conflicted and corrupt leadership of health care organizations, nothing will be done at all.
ADDENDUM (5 January, 2008) - Also see more background, links, and comments in this post on the Junkfood Science blog.
17 comments:
Wow! The art of Cutting and Pasting snippets from the web takes on new meaning with your take on IFCP. But in the end it just that, Cutting and Pasting. You have no idea the harm you cause when people like you put this crap out on the web without any true or relevant information. I will leave you with 2 thoughts. 1) Don’t trust anything you read and 2) When someone points a gun at you and says “Either take a shot in the head or the arm”, what would you choose? That is your legal system at work one day this too may happen to you.
And wow! The art of snarky comments that add nothing to the debate takes on a new meaning with this one.
If the anonymous commentator has a good argument that any of the quotes in the post, none taken out of context, and all from reasonably reliable sources, were wrong or misleading, I invite him or her to make the argument. Furthermore, if he or she has a substantive disagreement with any of my opinions about the case, I invite him or her to state the disagreement.
Great piece! Thank you for exposing what is trying to be covered up. There is far too much of this going on these days.
I always love how people brave enough to make nasty accusatory comments always post "annonymous"ly and never offer any constructive criticism. Nor are they ever capable of backing up their attacks.
The one thing I do like about your blog is your first name. Now back to my point, you can not condemn people based on what is written in various new papers. All of your quotes are accurate from the point on what was reported. That being said, there is a little truth in the words that are printed. The press twists things in reporting to get headlines and sell papers. Do you know how the information is even collected or distributed, my guess is no. I do and if you ask me how I will be glad to share it with you.
I do agree in the IFCP case that the CEO knowling abused his power. He probably did it in a way that insulated himself just enough so that it appeared that others were in control. I’m just spit balling here, when it was time to tell what happened it was convenient to say that was not my responsibility that was xyz’s job. There is a saying “Absolute Power Corrupts absolutely” that’s the lesson on IFCP.
I have to believe it is a testament to the "heat" the blogs are bringing to the medical community, including business, that attacks such as anonymous take place. Other blogs seem to have their personal "anonymous" commentators that also wish to disrupt or change the focus of the debate from the facts to some nebulas issue. This is a very old sales trick.
Has pharma decided to assign disruptive commentators, or is this an employee of a pharma firm trying to score points?
Either way they are tilting at windmills, as Don Quixote said "facts are the enemy of truth."
Steve Lucas
I say again, the one thing I do like about the blog is the authors first name. All I will say is that the news that you are reading is based on little fact and is incorrect. You can not add to any debate if your information is based on ill informed and sensationalized sources. Using big words or adding individual hypothesis does not make it correct either. Based on what was written and copied off of the web there are incorrect fact patterns. The recent stories regarding IFCP have little to do with the truth of this case. Other issues may be addressed during another phase of this case. Do me a favor and read about plea agreements and the percentage of cases that actually go to a jury trial, and then find out how much it cost to go to a jury trial. You may be surprised with what you may find out.
Above Anonymous, you state: The recent stories regarding IFCP have little to do with the truth of this case.
So-o-o-o-o . . . tell us the "truth." We recognize that journalism is sometimes 'skewed' by the reporter . . . but unless YOU tell us YOUR version of the 'truth' (with substantiation), we cannot judge whose skewing is the best.
--Melody
This is from the Press release US DDOJ "The Information to which VICTOR pleaded guilty charged that a federal audit uncovered that the IFCP fraudulently submitted requests, in 1999 and 2000, for reimbursements for non-grant related expenses disguised as expenses that were properly reimbursable under the specific terms of the grants issued to the IFCP by the federal government. As a result of the audit, the IFC Prepaid the funds and agreed that it would provide training to IFCP employees to ensure that the practice would not be repeated.
Notwithstanding its agreement with the government, the practice of fraudulently seeking reimbursements resumed, according the felony Information. When the fraudulent conduct was discovered, federal criminal and civil investigations were commenced by the Federal Bureau of Investigation, the United States Attorney’s Office and the USDHHS"
So I will ask some questions when did Victor start to work at IFCP?
In 2000 what and by who whom put in Administrative controls and traing in place to ensure that the issue would not happen again? There is only one name that covers both periods of time.......Guess Who? And its not Victor.
To anonymous above, who may or may not be the same "anonymous" who has posted before:
1- Victor pleaded guilty. That makes him a criminal. Do you mean to imply that he was innocent, despite his guilty plea? If you have such evidence, you should submit it to the FBI or other appropriate law enforcement agencies. But why did Victor plead guilty if he thought he was innocent?
2- Maybe I should have made it more obvious, but I thought it was clear that just because Victor pleaded guilty does not mean he was the only person responsible for the demise of the IFCP. I suspect the bad leadership was more generalized, although bad leadership does not necessarily mean criminal leadership. My larger point was that the IFCP case was an example of how leadership by people who are ill-informed or unsympathetic to health care values, conflicted, or even criminal is bad for health care organizations, bad for health care, bad for patients and doctors, and bad for the public at large.
Like I said I do like your first name
I never argued Victor’s guilt or innocence or what was pleaded to or what might happen as a result
What I have argued is just using web based, news paper based information to create an argument or indictment. Your doing this is like playing the child’s game of 25 secrets. There may be other names for the game, but it goes like this. A secret is told to the first kid, that kid tells the next kid so on and so on. By the time it reaches the 25th kid, it is a completely different story.
In this blog you’re like the 26th kid, ill informed. I will prove it right now, regarding your posts.
1) Were you in the court during Victor’s Plea? And if you were what 2 dates was that?
2) Have you read the plea agreement with the US and Victor. What was stipulated? what was agreed to?
3) Have you read the information felony indictment, what was actually charged?
4) Have you read the audit report of the OIG and what was determined as result of that audit?
5) What did the audit show? When did most of the overspending happen?
6) How many people were in the court and how many were reporters.
7) Do you even now how information is picked up by the NY Times, Newsweek, or any other news source.
So my point to all of this is, you do not have first hand knowledge. You will not find any of the above by looking at the web or reading newspapers. All you know about is, IFCP went bankrupt, may have used grant money inappropriately, had a Doctor run the company and lived beyond the companies means, and the ex cfo plead guilty to a obstruction of justice charge. All the while this information is coming from the Federal Government, but hey, they NEVER make mistakes!
Anonymous,
You really do present an object lesson for the rest of the audience in poor sales technique. Questioning the qualifications of the commentator or their “first hand knowledge” was a sales tactic I was taught over 30 years ago in my undergraduate program.
In the follow on sales management class, taught by the sales manager of a drug wholesaler, we were taught this is not an appropriate sales technique to be used in an educated argument. You are really showing poor taste in using this technique in a forum where the experience and education levels seem to exceed yours.
You have yet to provide any additional information or prospective on this issue. I would suggest you go back to your sales manager and explain your shortcomings and ask for guidance on how to improve your position.
Steve Lucas
Anonymous wrote:
"What I have argued is just using web based, news paper based information to create an argument or indictment" [is a bad thing].
However, one benefit of the new internet technologies is that you can easily start your own blog to explain your points. And it's completely free. Go to www.blogger.com. Good luck and let us know the URL.
So what happened to Roy Victor? His sentencing was supposed to be on April 18th and I have not seen anything about it?
I worked with Roy Victor at another company and he was a very impressed with himself and would stab you in the back while smiling at you. I would be interested in knowing if he got what he deserved.
So... this is what happened to Roy Victor
Ex-CFO of bankrupt Valhalla research center avoids prison in misuse of federal funds
By Timothy O'Connor • The Journal News • May 20, 2008
The former chief financial officer of a Valhalla cancer-research center admitted he lied to federal investigators about the center's misuse of millions of dollars in federal grant money.
But Roy Victor said he did not do it to line his own pockets. He did it, he said, in hopes that the Institute for Cancer Research could survive and search for cures for the disease that claimed his father and struck his younger brother at 15.
"I was driven by the goal of keeping the cancer research going," he said yesterday as he stood for sentencing in U.S. District Court in White Plains.
Judge Kenneth Karas took Victor's lack of personal enrichment into account, sentencing him to six months of home confinement and two years of supervised release for his guilty plea to obstruction of justice.
"I think this is an individual who, it needs to be recognized, did not do any of this out of any personal aggrandizement," Karas said. The judge also cited the dozens of letters of support he received as part of Victor's pre-sentencing package, his charitable acts on behalf of his Yorktown neighbors and the needs of Victor's two young daughters in deciding to fashion a sentence below the 12 to 18 months in prison recommended by federal guidelines.
The Institute for Cancer Prevention filed for bankruptcy in September 2004, ending 35 years of research. The bankruptcy filing came three months after federal auditors determined that the institute had improperly sought grant money to cover unrelated expenses.
Victor, 44, admitted that he lied to federal investigators when he told them the institute had not submitted false statements to the U.S. Department of Health and Human Services, which administered the nearly $6 million in federal grant money awarded to the institute. It submitted the statements to account for money drawn from the grants. But the statements did not reflect that the institute actually used the grant money for improper purchases, including the leasing of office space on the Upper East Side of Manhattan, Assistant U.S. Attorney Perry Carbone said.
In all, the institute misspent more than $5 million in grant money, Carbone said, with $2.5 million of that unlikely to ever be recovered.
Victor, he said, lied to federal investigators "on multiple occasions" over the course of 18 months.
But Jonathan Gardner, Victor's lawyer, said he did eventually tell the whole truth during a third interview with FBI agents.
"At the end of the day, he did come clean," he said. "He did explain exactly what he did."
Outside court, Victor expressed relief at the sentence.
"I'm looking forward to regaining my life and moving on," he said.
I was a former employee at The American Health Foundation. In and around 1995 an employee who worked in the accounting dept at AHF entered my laboratory and asked me for assistance. He told me that funds were being routed out of grant accounts for unauthorized use and that he believed if this continued it would bankrupt the institute. I told him to phone the NIH or the Government Accountability Office....he refused telling me he feared losing his job. I phoned them myself, told them about the alleged issues that were reported to me and begged them to execute and audit. Their response was that the accounting employee had to provide the evidence otherwise they would do nothing. They informed me that they were understaffed and could not possibly audit every government funded institute where there was a possibility of fraud. I explained that without Whistleblower Protection the employee feared losing his job....they blew me off and did nothing. Imagine if they took note and did that audit....the institute might have been saved before the collapse.
Sometime after this incident occurred I was asked to compromise data regarding an FDA approved class of drugs that I was studying in my laboratory. The reason offered by the institute for such an egregious request was that AHF was heavily funded by private pharma companies and we could not afford to report adverse issues/toxicities regarding their drugs that FDA had not found as it might interfere with our income stream from private corps. When it comes to securing income, public safety means nothing. I guess we pay a large price when we accept private funding for medical research. I refused to censor data and of course published the truth. A serious personal price was paid for
this choice....but before I left the institute I did design the ONLY safe drug in this class that is today a blockbuster drug and earning the pharma company I designed it for over 700 million dollars per year. I received not one penny for this discovery.
Bottom line ...there is no oversight, no accountability and the tax payer and the public are paying the price for this not only in dollars but also with their personal health - as there is no oversight and data is constantly being compromised to secure the favor of private funding sources!
I did not stop....I lobbied Congress for Whistleblower protection legislation for academic scientists. I worked with the Government Accountability Project and Tom Devine....a public interest law group. Congress to date has not passed ANY legislation to protect scientists in the private sector that report waste, fraud and abuse that concerns public safety and welfare.
So a very reputable institute that was working to protect public health and safety and to educate us all about disease prevention, collapsed.....and 200 reputable Ph.D. scientists lost their jobs and most their careers. Think of the cost not only in what the tax payer paid for their training but for the lost opportunity to us all in terms of what they might have contributed or discovered to public health, disease prevention and safety.
The government eventually recovered the misappropriated funds that caused the institute to collapse but there was no recovery for the scientists who lost their jobs and many their careers.
The press never reported this travesty and this concerns me ....and to date there is no hope in sight for change in our laws to prevent this from recurring. The tax paying citizens of this country who paid for the education and training of these scientists are the true victims...because the contributions that could have been made will never be made.
Dear former employee at The American Health Foundation, who posted a note on 9/22/13: Thank you for your observations. I would like to read a book about this subject, and respectfully suggest that you consider authoring one. I realize that is a huge investment of time. Still, you tell a fascinating story.
-Michael Christian
Yonkers, N Y
The below quote is what I am responding to. What a bunch of crap. I am the former employee who worked in the accounting dept and I was the one who alerted DHS to the issue. I had only worked for AHS for about a week when I realized that DHS had no idea there was a $4M over-draw. Consider this a FACT! So, whoever wrote that they called DHS is absolutely upsurd. The GAO sent in Auditors within days of my call. I think it was 2 or 3 days. I was never afraid of loosing my job. I resigned days after working with GAO and restating many years of financial statements in order to see when the problem began. It only took about a month to restate the financials and conclude when and where and on who's watch the scandal happened. It was obvious that AHF would not survive, so I took another job after that.
It was a great company and I was sad to see it end the way it did, but it had leaders that did not understand what they were doing and thought the DHS was their piggy bank.
What's amazing is that they changed their name and got more funding and did it again! I was not aware of that. Scary how that could possibly even happen.
"I was a former employee at The American Health Foundation. In and around 1995 an employee who worked in the accounting dept at AHF entered my laboratory and asked me for assistance. He told me that funds were being routed out of grant accounts for unauthorized use and that he believed if this continued it would bankrupt the institute. I told him to phone the NIH or the Government Accountability Office....he refused telling me he feared losing his job. I phoned them myself, told them about the alleged issues that were reported to me and begged them to execute and audit. Their response was that the accounting employee had to provide the evidence otherwise they would do nothing"
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