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James Marchese

Discussion in 'Cell Therapeutics' started by Anonymous, Oct 31, 2007 at 9:24 PM.

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  1. Anonymous

    Anonymous Guest

    Whistle-blowers are typically celebrated for risking their careers, and even their safety, to bring corporate wrongdoing to light.

    But once in a great while, someone blows a whistle on the whistle-blower. Consider the case of James Marchese, now unfolding in a courthouse in Seattle.

    A few years ago, Mr. Marchese met with Justice Department officials and told them that his former employer, a pharmaceutical company, had fraudulently marketed a cancer drug and bilked Medicare out of millions.

    The government was so impressed by Mr. Marchese’s allegations that it joined him in suing that company, Cell Therapeutics.

    In April, the company agreed to pay $10.5 million to the government to settle the charges. That put Mr. Marchese in line to receive as much as a quarter of that sum, or $2.8 million, as his reward for blowing the whistle.

    But the Justice Department has had a change of heart about Mr. Marchese and is asking a federal judge to award him nothing. The government now contends that he was the mastermind of a much bigger scheme within the company than the ones on which he blew the whistle.

    “Giving Marchese a share of the settlement proceeds would merely serve to reward Marchese’s egregious wrongdoing,” federal prosecutors in Seattle stated in a court filing this month.

    Whistle-blower lawsuits like Mr. Marchese’s, or so-called qui tam actions, date to the Civil War. That is when Congress, reacting to fraud by companies selling defective supplies to the Union Army, passed the False Claims Act, giving citizens the right to sue on the government’s behalf and be rewarded for acting as an informant.

    The concept, as one lawmaker described it at the time, was to set “a rogue to catch a rogue.”

    But if the government believes that a whistle-blower was also a “planner or initiator” of the fraud, it can argue that the reward should be reduced, even down to zero. That is what the Justice Department is now saying about Mr. Marchese, 38, who was a sales representative at Cell Therapeutics, a company based in Seattle.

    Several legal experts said they recalled just one or two times in recent decades when the government has publicly taken a similar stance. One case that occurred in the early 1990s involved a former Northrop Corporation engineer who may have been involved with test falsification by the company.

    “This happens once in a blue moon,” said John R. Phillips, a lawyer in Washington, who is considered a leading expert on whistle-blower lawsuits.

    Not surprisingly, Mr. Marchese said in an interview that he was shocked by the cold hand he was now getting from the Justice Department. He said that he did nothing wrong and that, if not for him, the government would never have had a case.

    “I was blown away when they said they were going to zero percent,” said Mr. Marchese, who now works for a mortgage lender in New Jersey.

    This tangled story began in 2000 when Cell Therapeutics won approval from the Food and Drug Administration to sell a cancer drug, Trisenox. But the agency approved the drug only for a relatively rare form of leukemia known as acute promyelocytic leukemia, or A.P.L., which affects about 1,500 new patients a year.

    Cell Therapeutics sought ways to expand the use of the drug, which is a form of arsenic. But it settled on ways that were illegal, according to filings by both prosecutors and Mr. Marchese.

    (In resolving the charges against it, Cell Therapeutics denied any wrongdoing and continues to dispute suggestions that it broke the law.)

    Mr. Marchese’s days at Cell Therapeutics ended in 2002 when the company fired him, saying he arranged kickbacks to drug wholesalers, an accusation he denies. That year, he also contacted F.D.A. officials and asserted that Cell Therapeutics was illegally promoting Trisenox to treat cancers for which it had not been approved. One method, according to Mr. Marchese, involved paying bogus consulting fees to doctors to attend meetings that promoted off-label use of the drug.

    However, the case against the company, court documents indicate, did not gain momentum until mid-2004 when Mr. Marchese first met with federal prosecutors in Seattle. He gradually provided them with hundreds of company documents, tape recordings and other materials, his filings state
    In early 2006, Mr. Marchese filed his whistle-blower suit, which the government later joined. In such cases, a whistle-blower is guaranteed 15 percent to 25 percent of a recovery based on his or her contribution to the case. In the Northrop case, the whistle-blower got 10.8 percent.

    Mr. Marchese said he had paid a high personal price for talking to the government, including being blackballed from the drug industry.

    “I’ve lost six years of my life, my job, my home,” he said. “It has destroyed my marriage and made my life hell.”

    Federal prosecutors do not dispute Mr. Marchese’s entire story. But they say he concealed the biggest part of the scheme inside Cell Therapeutics from them for a simple reason: he had created it.

    “Marchese personally planned and initiated the fraudulent scheme at the core of this case,” they have charged.

    It is difficult to tell from filings precisely when Mr. Marchese and prosecutors turned from allies to adversaries. The assistant United States attorney handling the case, Peter A. Winn, referred questions to the Justice Department. A spokesman there declined to comment.

    But filings show that prosecutors, apparently based on evidence uncovered during their inquiry, notified Mr. Marchese in the fall of 2005 that he was the subject of a criminal investigation related to his activities at Cell Therapeutics.

    Prosecutors contend Mr. Marchese engineered a complex scheme that misled oncologists and Medicare into believing that Trisenox had been approved for treating cancers other than A.P.L. Mr. Marchese said that if he did anything wrong, it was an innocent mistake.

    To make matter worse, prosecutors say, Mr. Marchese destroyed and hid evidence to conceal his role.

    A main witness against him is a former girlfriend. She told prosecutors that she accompanied Mr. Marchese in 2004 to a storage warehouse in New Jersey to retrieve company documents for his planned whistle-blower lawsuit against Cell Therapeutics. But she said he told her that he needed to cull the files and destroy materials that would implicate him, filings show.

    There is also the issue of an unpublished manuscript by Mr. Marchese, “The Heart of the Matter.” The salesman’s former girlfriend, who is not identified by name in filings, has told prosecutors that she read and helped edit the manuscript, which she says details Mr. Marchese’s days at Cell Therapeutics, including his “successful efforts to illegally market Trisenox.”

    Mr. Marchese disputes that, describing the manuscript as an eight-page document and a crude attempt at fiction rather than fact. Prosecutors say they would like to see the manuscript so they can judge for themselves.

    Next month, a federal judge in Seattle will hold a hearing to determine what Mr. Marchese deserves as a whistle-blower, if anything. Mr. Marchese’s lawyers, who are seeking the maximum 25 percent, said in a filing that prosecutors tentatively dangled a settlement offer but then did not make it formal.

    Mr. Marchese said that if the government believes that he is a criminal, it should have indicted him, a course prosecutors have chosen not to pursue. He also contends that the government, by denying him what he considers his just reward, is sending a message that will deter other whistle-blowers.

    “They are saying that it is better to commit fraud than to report it, and that is a shame,” he said.

    For his part, Mr. Phillips, the lawyer and whistle-blower expert, is not so sure. He said that while he was unaware of the facts of Mr. Marchese’s case, the law has boundaries for a reason.

    “If the message goes out that you better not start a fraud internally and think you can profit it from it, then that is a good message to send out,” he said.

  2. Anonymous

    Anonymous Guest

    Can't somebody whistleblow Jim Bianco the hell out of here?
  3. Anonymous

    Anonymous Guest

    Sportelli spent 2 months in prison........
  4. Anonymous

    Anonymous Guest

    was this guy at Ortho Biotech in the late 90's?
  5. Anonymous

    Anonymous Guest

    This post is for all readers, commenters, etc. I have been reading this blog as well as others dealing with the same topic. I am Jim's ex wife and I know that I have met and become friends with many of you and your families over the years since I was with Jim from Schering all the way through to his last days at CTI. I am sorry that we lost touch and I want to take this opportunity to reach out and reconnect. Anyone who is interested, please contact me at Pharmafriend@aol.com either by email or IM. I hope to reconnect with many old friends!
  6. Anonymous

    Anonymous Guest

    I know we have met I am trying to send you a message but it does not seem to be going through on the email address you left. I am sorry I forgot your name. Could you please put your name down and phone number so all of Jims old friends can just give you a call and get cought up, thanks.
  7. Anonymous

    Anonymous Guest

    I am not signed on to accept IM's all the time. Send me an email at that address. I am not going to post my phone number on the internet
  8. Anonymous

    Anonymous Guest

    Keep on trying to send you an email but it won't go through. What is your name again?
  9. Anonymous

    Anonymous Guest

  10. Anonymous

    Anonymous Guest

    It is suspect, but all I can tell you is to ask me a question that I would be able to answer. I am posting because just like all of you at CTI and other Pharma companies I got screwed too!! If you want to know if i am real, send me an email or IM and we can discuss it there.
  11. Anonymous

    Anonymous Guest

    Has anyone tried to email Jim's ex wife?
  12. Anonymous

    Anonymous Guest

    No one has tried to email me yet, thanks for asking! You can try to meet me in Chat if you like, I will hang there for a little bit!
  13. Anonymous

    Anonymous Guest

    This is his ex, Rebecca, no one has emailed me and I have not responded to anyone. You are just making stuff up. Your industry gets a bad name for making stuff up. Anyone who seriously wants to email me can at pharmafriend@aim.com
  14. Anonymous

    Anonymous Guest

    Hey its Rebecca. I created the email address referencing this blog. I did not want to give my email address out because I would rather not have lots and lots of junk emails sent to me! I can assure you, its not Jim, it is me and if you want to, take a chance and contact me!
  15. Anonymous

    Anonymous Guest

    Room CTI, Topic is Marchese!
  16. Anonymous

    Anonymous Guest

    What would make you guys believe me?
  17. Anonymous

    Anonymous Guest

    bra size? LOL
  18. Anonymous

    Anonymous Guest

    We are not hiding either Jimmy, we will see you face to face in Seattle in 10 days
  19. Anonymous

    Anonymous Guest

    I pray that I get asked to come and testify against you so I can look you in the face and tell you what a liar you are.

    By they way, give me your name, and I will add you to the witness list so you can "have your day in court". No need want to wish that you had a chance, you are more than welcome to come. In short, I believe I know who this is and I am calling your bluff.
  20. Anonymous

    Anonymous Guest

    That was your best, intellectual reply?? pathetic. Furthermore, you are not even right! Now I def. know who this is!!!! Loser.