Viceroy has received responses to two Freedom of Information Act (FOIA) requests lodged after the publication of our initial report, one from the Department of Veterans Affairs and the other to the Department of Justice.
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Both agencies withheld all requested documents under 5 U.S. Code § 552 5(b)(7)(A), which provides an exemption for agencies to make available public documents as it could “reasonably be expected to interfere with enforcement proceedings.”
Viceroy now believe MiMedx is under formal investigation by the Department of Justice, the Department of Veterans Affairs and the Securities and Exchanges Commission.
Viceroy obtained a series of emails between MiMedx employees and VA personnel. These emails are focused on the arrangement of consignment inventory, contrary to VA hospital regulations at the time. The issue comes to a head when a VA supervisor decides to hold MiMedx responsible for repeatedly sending product that was not ordered. The VA have been made aware of these and other emails with a report of concern.
MiMedx emails to former employees are in clear violation of federal law: settlements contingent on retracting statements to regulatory bodies.
Viceroy has obtained from a physician an email sent from MiMedx employees to physicians to fraudulently exploit the reimbursement system to financially benefit both the physician and MiMedx. This is done through manipulation of Q-codes which denote the form of treatment in which a product was used. The aim is for all treatments using MiMedx products to be coded as “wound care” in order to fraudulently maximize reimbursement. This type of Medicare fraud is referred to as ‘up-coding’.
In addition to this Viceroy present recent court filings and emails showing that MiMedx engaged in illegal settlement terms in its legal actions against former employees. MiMedx has sent legal material to former employees requesting that they do not contact regulatory authorities and has stipulated in its settlement agreements that former employees retract their statements to any regulatory body. This is a violation of the United States Code of Federal Regulations.
As a reminder of MiMedx selective statements to its investors, it’s by no coincidence that MiMedx are now blatantly cloaking their conduct in public courts relating to former employee proceedings on confidentiality grounds.
Viceroy continue to be contacted by physicians, former employees, former and current VA employees all speaking on a similar theme when explaining MiMedx conduct. We thank these brave individuals for fighting back against the unnecessary, aggressive, and retaliatory actions of MiMedx.
Viceroy were informed by various physicians that they had reported their concerns to the Office of Inspector General U.S. Department of Health & Human Services .
We are also led to believe that MiMedx’s statement of assisting the Department of Veterans Affairs with its on-going investigation is incomplete, if not deceptive, via omission. Viceroy believe investors should have been told of these investigations and what information was requested by VA investigators.
The more MiMedx management continue to lie to its investors through press releases and responses to short seller articles, the more disillusioned and harassed former employees send Viceroy evidence countering their claims.
Emails obtained by Viceroy between MiMedx employees and a Department of Veterans Affairs hospital further evidence channel stuffing. The new whistleblower counterclaim reveals blatant, systematic fraud across what appears to be the entirety of the MiMedx corporate structure.
Viceroy have obtained an email exchange between a number of MiMedx sales employees and a VA Medical Center, showing that MiMedx employees attempt to circumvent hospital policy on consignment inventory to prevent tracking of MiMedx product usage.
Additionally, Viceroy has obtained court filings between MiMedx and former employee Michael Fox that have been recently filed.
Annexed to this article are the transcripts of recordings of phone calls between Jess Kruchoski, former MiMedx employee; Steve Blocker (Area VP) and Lou Roselli (Director of National Sales, aka “5 Levels Lower” Lou). The three openly discuss end-of-quarter channel stuffing activity directed by Pete Petit and Chris Cashman.
Viceroy have discovered legal proceedings against MiMedx vendor RedMed for their alleged role in a kickback scheme and False Claims act violations. In addition to this Redmed’s principal Jeff Hannes is also involved with several other Physician Owned/related Distributors (PODs).
Viceroy will also highlight MiMedx sales to another POD whose physician is no longer alive and the LLC deregistered.
Viceroy will release details of further PODs shortly.
Pete Petit would like us to examine his track record of running public companies. We find that Pete and his close-knit board & management has a tendency to run them into the ground.
Part 13 – The same thing happened at Matria
This report concerns MiMedx directors Parker “Pete” H Petit, Debbie Dean and Joseph “Joe” G. Bleser and their previous positions at other Petit companies; Healthdyne Inc., Healthdyne Information Enterprises (HIE), Healthdyne Maternity Management (HMM) and Matria Healthcare.
The events detailed in this report resulted in a catastrophic collapse of Matria’s share price due to earnings downgrades and revision of future performance.
MiMedx has increasingly come under pressure from both analysts and short sellers over the past month. The market is waking up to find MiMedx’s closet of skeletons quickly spilling open. Dubious hiring practices, physician owned distributors, employee owned distributors and poor corporate governance are all coming into focus. The specter of action by the United States Department of Justice, Office of the inspector General of Veteran’s Affairs and the Securities and Exchanges Commission now hangs over the company.
Viceroy has obtained documents from former MiMedx employees detailing sales targets and historical figures broken down by distributor. The information directly contradicts statements made by MiMedx. Viceroy believes that MiMedx has systematically and deliberately misled investors and stakeholders and has forwarded this information to the relevant authorities.
This report is concerned with the creation of Physician Owned/Related Distributors (henceforth PODs). The potential for fraud is well documented as evidenced by the release of the special fraud alert by the Office of the Inspector General of the Department of Health and Human Services:
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