Please do
not read this essay. It is too long, too boring, and too detailed to be of
interest. However, it describes a traumatic episode in my life that I want written, even
if not read.
___________________________________
August
2001
My
attorney was saying something like, “I am pretty sure we can get use immunity for both of
you. Maybe even blanket immunity but that’ll be a lot harder to get. For
blanket immunity we will need approval from the Department of Justice in
D.C. It may take a couple of days.”
I did not
understand the distinction between the two types of immunity deals that could
be offered to witnesses who were willing to testify before a Grand Jury. My new
$500-per-hour criminal lawyer was happy to explain. Use immunity meant that anything I said under oath that pertained to a specific area of inquiry
could never be used against me in court. Blanket immunity meant that anything I said under oath regardless of the topic could not be used against me –
unless I lied. In that case all bets would be off.
Just
being in the office of a criminal defense lawyer and discussing immunity
agreements to avoid federal prosecution was…surreal. My business partner
and I were looking at each other trying to process this avalanche of new
information while still vibrating in and out of denial. It seemed impossible
to us that we were capable of doing anything significant enough to need
immunity from prosecution for a felony. Yet, here we were paying a criminal
defense attorney $500 per hour to scare the hell out of us.
My
anxiety level was about to top out. It got higher with the answer to my next two
questions. I asked, “What if we don’t get an immunity agreement? What is the
worst case scenario?” The attorney opened a large book that listed multiple
federal crimes and the mandatory sentencing guidelines. He flipped it around so
that we could read it ourselves. He told us that we would probably be charged with
obstruction of justice and/or conspiracy to defraud the government. Either way
the mandatory sentence would be three to five years. With no prior convictions we would likely get the minimum mandatory sentence. He asked, "Do either of you have any
prior convictions?”
I stared
straight through the eye contact of the attorney into some distant space far
away. My audio track was stuck at “three to five years.” I think the attorney
must have sensed that he was getting out ahead of my anxiety level so he backed
up. He tried to reassure me that he thought we were going to be okay. He hit
the reset button by summarizing his understanding of our situation. My partner
and I helped with detail and clarification as he went along. The summary went
something like this.
_____________________________________________________________________________________
Michael
and his partner own and operate a small business called Triangle Training &
Communication Associates (TT&CA). The business works under contract with
state and local government agencies to produce training manuals, videos,
conferences, workshops, and other training-related services. Most of the work
of TT&CA is in the area of mental health services. The state Division of
Mental Health in Raleigh occasionally allocates money to a local mental health
agency to carry out specific projects. Sometimes the state Division of Mental
Health asks the local mental health agency to contract with TT&CA to
accomplish the state’s intention. This is a common business practice that is
both legal and transparent.
One of
the state officials with whom TT&CA has frequently worked is Dr. Lenore
Behar. She was, until recently, the Director of Child Mental Health Services
for the North Carolina Division of Mental Health Services. Dr. Behar is a
psychologist with a national reputation and is recognized as a prominent expert
on child mental health. Michael and his partner describe Dr. Behar as creative,
intelligent, and capable of doing great things. They also consider her to be a
narcissistic bully who relies on intimidation as a means of influencing the
behavior of people with whom she works. Let’s just stipulate that she is a
complex and difficult person.
In 1994
Dr. Behar was invited by the Governor to join a delegation of people from North
Carolina to go on a state-sponsored trip to Israel. The trip was part of an
economic and cultural exchange initiative. Michael’s business partner and her
husband, a prominent member of the psychology faculty at UNC, were included in
the group of dignitaries on the trip. At the conclusion of the trip the
Governor announced the creation of a new organization, the North
Carolina/Israel Partnership. An office of the Partnership was set up in Tel
Aviv and a Director in Israel was hired. Dr. Behar was assigned a leadership role for the Partnership in North Carolina. Michael’s partner became an
enthusiastic volunteer and supporter of the Partnership.
Early in 1995 Dr. Behar asked Michael’s partner to help her get some money to the
North Carolina/Israel Partnership office in Tel Aviv. Dr. Behar explained that
she had access to funds that were critical for the success of the program in
Israel but she had no way of getting the money there. She suggested the idea of
a “pass through” contract to TT&CA through a local mental health agency. Dr.
Behar said she would arrange for an allocation to the local agency. TT&CA
could bill the local mental health agency for the project work and then simply
write a check to the Partnership in Tel Aviv. Michael’s partner asked Dr. Behar
if this arrangement was approved by other officials in state government. Dr.
Behar told Michael’s partner that this specific arrangement had been discussed
and approved in a meeting with representatives from the Governor’s office.
Michael’s partner agreed to the arrangement.
When
Michael’s partner explained the arrangement to Michael he thought it was
“crazy.” He wondered what would be the rationale for a local mental health
agency to contract for work done in Israel. He also wondered why the Governor’s
office would approve of this deal. But since this was his partner’s project he
did not pay much attention to the details. He thought it would be another
example of his partner’s “volunteer work” for the Partnership since there was
no money to be earned except for a very small administrative fee.
A few
weeks later Michael noticed an invoice to a local mental health agency in the
outgoing mail box. He read the invoice and was confused. The $10,000 invoice
was for the completion of “Case Management Training Modules.” TT&CA had not
done this work. He carried the invoice into his partner’s office and asked for
an explanation. His partner said, “That is for the Israel project. That’s how
Lenore told me to invoice it.” Michael said, “We can’t do that. Even if we
disregard whether it’s right or wrong. It’s definitely illegal. We cannot bill
for work we didn’t do.” Michael asked to see the contract that supported the
invoice. He read the contract terms that Dr. Behar had sent the local mental
health agency. The contract signed by Michael’s partner was for the creation of
case management training modules. It
made no mention of Israel.
Michael
insisted that the invoice could not be sent. His partner then told Michael that
she had already sent a prior invoice for a similar amount to the local mental
health agency and that TT&CA had received payment. She also had written a
check to the NC/Israel Partnership for the same amount minus a 3%
administrative fee. After lengthy discussion Michael and his partner agreed
that this matter was unlikely to ever be scrutinized. They also agreed that it
was still a problem. Michael’s partner acknowledged that she had made
a naïve mistake.
After
thinking about this overnight and talking with his wife Michael told his
partner that he thought she should tell Dr. Behar that the original contract
would have to be modified. Dr. Behar would have to notify the local mental
health agency that there had been an error in the original scope of work. A new
contract would have to be written that called for work actually done by
TT&CA.
Michael suggested
to his partner that she rewrite an existing training manual that TT&CA had
developed for a private client. The revised manual could then constitute a
legitimate contract deliverable to the local mental health agency. Michael
suggested that TT&CA could then take the proceeds from that legitimate work
and send the money to the NC/Israel Partnership. Since Michael’s partner had
created the problem in the first place she agreed that it was fair that she
would do the “pro bono” work of rewriting the training manual for this new
purpose. Michael assumed this would constitute a legal transaction and, thus would enable
him to sleep at night. Neither assumption turned out to be accurate.
Michael’s
partner informed Dr. Behar of the problem and the changes that would have to be
made. Dr. Behar called Michael and expressed her displeasure. She told him that
he was creating an unnecessary problem. She threatened that this could
jeopardize future business opportunities with her. However, she reluctantly
agreed to the revised deal. Soon thereafter she sent an awkward email to the
local mental health agency claiming that someone on her staff had made an error
in the original scope of work. Within a short time the contract was revised.
Ultimately,
TT&CA billed $42,000 to the local mental health agency under the contract. In
return the local mental health agency received a training curriculum on
behavior management skills for front line workers. TT&CA sent the funds (minus
3%) to the NC/Israel Partnership in Tel Aviv.
Fortunately,
Michael’s business partner retained extremely detailed documentation of every
aspect of these transactions.
________________________________________________________________________________________
At this
point the attorney stopped and asked us if we ever questioned Dr. Behar about the source of the money for the contract. At the time of the NC/Israel project we
did not inquire or even think about the source of funds. However, we had since
come to realize the significance of the source. The money was taken from funds
(about $23 million) that Dr. Behar had improperly billed the federal government
for “preventing unnecessary foster care placements in North Carolina.”
Our attorney
was aware of an active federal investigation of Dr. Behar. Local newspapers
were reporting on ongoing developments in the investigation. In fact, our
attorney was representing another client who was peripherally involved in the
scandal. The original investigation focused on an alleged abuse of federal
funds in a mental health project that Dr. Behar supervised at Fort Bragg several
years earlier. Because the funds came through Fort Bragg the investigation
was initiated by the Department of Defense. Since Dr. Behar had administered
numerous other federally funded projects, the investigation had broadened to
include other questionable transactions around the use of federal money. This
investigation had been going on for several years.
My
partner and I had been interviewed twice by federal investigators regarding our work with Dr. Behar. These were
friendly, voluntary interviews that dealt with multiple TT&CA projects. We answered all of
the investigator’s questions honestly and we were happy to show him written
documentation to support our answers. The interviews covered
years of TT&CA contracts. There was not a hint of impropriety found in any of
them. However, the investigators never inquired about the NC/Israel Partnership
project and we never offered any information about it - until now.
In the spring of 2001 Dr.
Behar was indicted on over 40 separate violations of federal law. Her
attorney made several high profile public statements about his client's innocence and her intention to fight the charges. My partner and I thought this storm was going to pass by us without mention of our work with Dr. Behar.
But in July we got a subpoena to report to the federal building in Raleigh to answer questions under oath regarding the Behar investigation. This prompted our new relationship with the $500 per hour attorney.
As our session with the attorney was wrapping up he offered a prediction about how this saga would unfold. He
said,
"I will
present a summary of your story to the US Attorney’s office and
obtain a blanket immunity agreement. Once the agreement is signed you will be protected from any criminal liability in this matter.
You will meet
with a team of investigators and the prosecuting attorney for questioning. They
will recognize the high value of your testimony and you will be subpoenaed to
appear before the Grand Jury in Wilmington.
You will testify
truthfully before the Grand Jury. Your testimony will result in additional charges being
brought against Dr. Behar.
Your
legal fees will be, at least, $10,000.”
Our
attorney’s predictions were all accurate.
___________________________
However, he did
not predict how quickly Dr. Behar would accept a plea bargain following our Grand Jury testimony. She
pleaded guilty to charges of obstruction of justice. She was sentenced to six
months of house arrest, a fine of $250,000, restitution in the amount of
$274,000, and two years of probation. She also was prohibited from being the principle investigator for future federal grants.
Our
attorney also did not predict that my partner and I would permanently close TT&CA within a month of our testimony as a self-imposed
consequence of this stressful ordeal. But that is what happened.
