Originally created 12/16/99

Whistle-blower suspected wrongdoing

Michael Haddle suspected bad things were happening at Healthmaster in his first two years as an executive, but he couldn't accept it, he testified Wednesday.

"I had followed the rest of the sheep," Mr. Haddle testified. He reasoned with himself that his suspicions couldn't be true in such a successful corporation (one doing $50 million in business annually in several states) with three in-house attorneys and a top layer of well-paid executives, Mr. Haddle testified.

But then he overheard a conversation in 1992 between Healthmaster owner Jeannette Garrison and her two top executives: They had cut an employee's commission, hidden a witness in his civil lawsuit against the company and intended to destroy him unless he dropped his suit, Mr. Haddle testified.

He began to change his mind about his bosses, Mr. Haddle testified, and he would tell the unhappy employee's attorney and later federal investigators about his suspicions.

With his help, Mrs. Garrison, and two other executives, were convicted in 1995 of stealing millions from taxpayers through Medicare fraud, witnesses have testified.

And Mr. Haddle found himself unemployed, fired in June 1995.

This week in federal court, a jury is being asked to decide whether Mr. Haddle was fired in retaliation for helping federal investigators and prosecutors. Mr. Haddle's attorneys concluded their case Wednesday.

Starting this morning, attorneys for Mrs. Garrison, the now-defunct Healthmaster and former corporate legal counsel and top executive G. Peter Molloy will present evidence they say will convince a jury that Mr. Haddle was fired for legitimate reasons unrelated to his status as a whistle-blower.

In early 1993, Mr. Haddle testified, he admitted to Mrs. Garrison that he had provided company information to the employee's attorney, who successfully sued the company. Mrs. Garrison declined his resignation offer, saying Mr. Haddle probably would just go to federal investigators and she preferred to route out any wrongdoing herself, Mr. Haddle testified.

For a time, things changed, Mr. Haddle testified. But by the end of 1993, Mr. Haddle suspected Medicare fraud again, and he tried but was unable to interest an IRS agent in his suspicions, he testified.

In February 1994, Michael Bowers, who was the Georgia attorney general at the time, announced he had received information that Mrs. Garrison's employees who donated money to political campaigns were illegally reimbursed with Medicare-paid bonuses. A joint federal-state investigation began.

Mrs. Garrison was furious and vowed to destroy anyone who testified against the company, Mr. Haddle testified.

On a later car trip to Atlanta, Mrs. Garrison told him, "You know, whistle-blowers don't get jobs, they get blackballed," a statement Mr. Molloy seconded, Mr. Haddle testified.

Mr. Molloy fired Mr. Haddle on June 21, 1995, a day before he was scheduled to testify at a pretrial hearing involving the criminal case, Mr. Haddle testified. At that time, the corporation had been renamed Healthmaster Home Health Care and placed in bankruptcy. Mr. Molloy had been selected by Mrs. Garrison to serve as the company's chief executive officer, other witnesses testified.

Mr. Molloy told the bankruptcy trustee -- appointed to oversee the home health care company -- that Mr. Haddle should be fired because Medicare would not pay his salary, witnesses have testified.

The bankruptcy trustee, Steve Wallace, testified Wednesday that he actually wrote the termination letter, using the information Mr. Molloy provided. Months earlier he had asked Mr. Molloy to obtain a written verification from Medicare about Mr. Haddle's salary, but no document ever materialized, Mr. Wallace testified.

The reason Medicare would not pay Mr. Haddle's salary, Mr. Wallace quoted Mr. Molloy as saying, was because Mr. Haddle was an officer in the Healthmaster corporation. No Healthmaster officer was allowed to have any part in the operation of Healthmaster Home Health Care, Mr. Wallace testified.

Mr. Molloy never told Mr. Wallace that he was still an officer of Healthmaster and a corporate director, Mr. Wallace testified. Neither did Mr. Molloy tell him Healthmaster's criminal defense attorney had hired the accountants who would replace Mr. Haddle, and had dictated the reason to cite in firing Mr. Haddle, Mr. Wallace testified.

Healthmaster Home Health Care eventually was sold and, after all debts were paid, $13 million to $14 million was left, Mr. Wallace testified. That money was converted to Healthmaster's stockholders -- in 1996 trust funds set up for Mrs. Garrison's children.

Reach Sandy Hodson at (706) 823-3226.


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