Lawyers play waiting game in medical conspiracy investigation

Mine was the best seat in the courtroom during closing arguments in Noel Gage’s conspiracy and fraud trial Tuesday. Perched next to attorneys Robert Eglet and Robert Vannah (two targets in the investigation), I observed their reactions to having their names bandied about by a federal prosecutor who was quite aware of their presence.

Eglet appeared every inch the successful attorney in a pinstriped suit with a purple silk handkerchief peeking out. Everything was perfectly coordinated from socks to shirt. He radiated confidence.

Vannah was more casual with a short-sleeved tan golf shirt, looking a little more unsettled than Eglet. Nearby, but not sitting with Vannah, was his son, who monitored the three-week trial, taking copious notes, one presumes to brief other interested parties on the case, such as Howard Awand, the linchpin of the alleged conspiracy.

It’s no secret Vannah and Eglet are near the top of the government’s list of potential grand jury targets, although the first to be indicted was Awand. He’s scheduled for trial in the fall, but even defense attorneys were speculating he’ll try to plea bargain if Gage is convicted on charges of conspiracy, mail fraud and wire fraud. (I think the best Gage can hope for is a hung jury.)

Eglet and Vannah remained stone-faced when federal prosecutor Daniel Schiess hurled their names out. Sitting next to them, I flinched. They didn’t.

“Who’s Mr. Eglet? He’s one of Awand’s boys,” Schiess said contemptuously.

The conspiracy, as outlined by prosecutors Steve Myhre and Schiess, was that Awand, a medical consultant, referred personal injury cases to certain agreeable attorneys, and in exchange, he received kickbacks out of the settlements, although the clients didn’t know that. Awand’s boys also included a crew of doctors, who would work cases in the courtroom, providing false testimony to help drive up the costs to the insurance companies, the prosecutors said.

“The lifeblood of this network is referrals,” Myhre argued. “If doctors are sending you patients, you are not going to sue them.”

Spine surgeon John Thalgott and neurosurgeon Ben Venger testified for the government, describing how they worked with Awand and lied for him, mainly because he made sure local lawyers wouldn’t sue them for malpractice. Too many lawsuits, and they would lose their insurance and their ability to work.

The government says Gage, when representing paraplegic Melodie Simon, didn’t sue Thalgott and Dr. Mark Kabins for malpractice because they were Awand’s boys.

Gage’s attorney, Tom Pitaro, argued Gage was a “skilled, knowledgeable, dedicated attorney” who didn’t sue Thalgott and Kabins because Gage needed their testimony in the Simon malpractice case. “It was a legal strategy to break the code of silence” in the medical community, Pitaro argued.

The doctors had a total of $9 million in malpractice insurance. Simon received a $2.3 million settlement. Of that she actually got $1.3 million. Pitaro said she might have received nothing if Gage had sued the doctors too.

Schiess contended Gage didn’t sue the two doctors because he wanted Awand to keep referring cases to him.

Awand referred the Carlos Pachas case to Gage, which resulted in an $18 million settlement. The government contended that three days after receiving the Pachas case, Gage stopped pursuing any malpractice investigation against Thalgott and Kabins.

Gage needed to keep Awand happy, Schiess said. “Mr. Gage knew Howard Awand could have taken that case down the street to Mr. Robert Vannah or Mr. Robert Eglet.”

Again, sitting in the front row, the closest seats to the jury, Vannah and Eglet were impassive, seemingly unmoved by the prosecutor’s utterance of their names.

The jury began deliberations Tuesday and continued all day Wednesday. The case has come down to one basic question: Was there a conspiracy to defraud patients and clients?

Myhre argued that if there were a “smoking gun” in the case, it was when Kabins was deposed May 15, 2002, in the Simon case and Gage didn’t ask about Kabins’ 12-hour delay in operating on her. “She’s paralyzed from the waist down, and he gets there 11 or 12 hours later, and Gage asks not one question?” Myhre boomed.

Here’s a guess: If Gage is found guilty, the government does another superseding indictment, adding Eglet and Vannah as defendants alongside Awand.

And Eglet will keep smiling, and Vannah will keep looking queasy.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275.