Category: News Feeds

* Three New Hampshire hospitals are suing Vermont over Medicaid reimbursements. Maybe they’ll accept payment in maple syrup… [Keene Sentinel]

* The Kansas Supreme Court has ordered a suspended attorney to serve a 30-day jail sentence for practicing law while his license was revoked. [Kansas City Star]

* The Justice Department is asking to defend President Trump in a defamation lawsuit over sexual assault allegations. [CNN]

* An Iowa lawyer has been suspended from practice for accepting a settlement offer that his client rejected. [Bloomberg Law]

* President Trump is expected to announce a new list of potential Supreme Court picks as soon as today. The former reality show host should know some interesting ways to make the announcement… [Guardian]

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Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

Ed. Note: Welcome to our daily feature Trivia Question of the Day!

According to data collected by Law.com, how many hours did the average U.S. attorney spend on pro bono matters in 2019?

Hint: It compares favorably to the international standard, which is a measly 22.6 hours a year on average.

See the answer on the next page.

Postmaster General Louis DeJoy should thank God every day for the statute of limitations. Without a five-year cutoff, he’d be staring down a tidal wave of legal trouble for what appears to be fifteen years of pressuring employees to make political contributions and reimbursing them via company bonuses.

“Louis was a national fundraiser for the Republican Party. He asked employees for money. We gave him the money, and then he reciprocated by giving us big bonuses,” DeJoy’s longtime director of human resources at New Breed Logistics, David Young, told the Washington Post. “When we got our bonuses, let’s just say they were bigger, they exceeded expectations — and that covered the tax and everything else.”

That’s not exactly what DeJoy told congress last month when Rep. Jim Cooper (D-TN) asked him about possible campaign finance violations.

“That’s an outrageous claim, sir, and I resent it,” DeJoy huffed angrily. “What are you accusing me of?”

Which is … not a denial.

In an extraordinarily well-reported story, five former New Breed employees confirmed to the Post that DeJoy would solicit them for contributions to Republican politicians, send division managers around to ask employees for money, send his personal secretary to collect checks at the office, and then gross up bonuses to cover the contributions plus the tax liability on the money earned.

Another former employee acquainted with company payroll practices said DeJoy personally told staff which employees should get the bonus enhancement.

“He would ask employees to make contributions at the same time that he would say, ‘I’ll get it back to you down the road,’” the source told the Post. Which would be the classic definition of a straw man scheme and illegal use of corporate funds for campaign contributions.

And since campaign contributions are a matter of public record, the Post was able to document ample evidence of checks from New Breed employees exceeding $1 million between 2000 and 2014 when DeJoy sold the company. Most of those employees significantly curtailed their giving or ended it altogether after the company was sold.

And if the Post was able to unearth all this dirt just by digging around, a U.S. Attorney with subpoena power could probably come up with some unpleasant stuff. Well, she could if the statute hadn’t already tolled.

Unluckily for DeJoy, North Carolina has no statute of limitations on campaign finance crimes, and North Carolina Attorney General Josh Stein has vowed to investigate the allegations against DeJoy, as has the House Oversight Committee.

As for DeJoy, he’s issued a statement congratulating himself for “encourag[ing] employees and family members to be active in their communities, schools, churches, civic groups, sporting events and the politics that governs our nation” and providing them with “various volunteer opportunities to get involved in activities that a family member or employee might feel was important or enjoyable.” He claims to have consulted with the former General Counsel of the FEC to ensure compliance with election law and “regrets if any employee felt uncomfortable for any reason.”

Which is … also not a denial. But with a five-year lookback, he’s already home free anyway.

Louis DeJoy’s rise as GOP fundraiser was powered by contributions from company workers who were later reimbursed, former employees say [WaPo]

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Elizabeth Dye lives in Baltimore where she writes about law and politics.

One usually associates the term “guardian” with the death of a parent. When an individual dies with a minor child, a court must authorize a guardian to act on the minor’s behalf until she reaches the age of majority. In some jurisdictions, a guardian, or conservator, may also refer to an individual or entity who is charged with acting on behalf of one who is deemed incapacitated. It is also possible that a guardian be appointed for a child, while her parents are alive, but are suffering a disability or setback that renders them unable to care for the minor.

In August, comedy icon Carol Burnett, at the age of 87, together with her husband, Brian Miller, has petitioned a Los Angeles Superior Court for temporary guardianship of her grandson, Dylan, son of Burnett’s daughter, Erin Hamilton. Their application has been granted, and they will remain temporary guardians of their grandson through Jan. 8, 2021. The impetus for the proceeding was Dylan’s parents’ ongoing struggles with substance abuse. Hamilton has been in and out of rehab for several years, afflicted with substance abuse. Tony West, the child’s father, has reportedly checked himself into rehab and as such is unable to provide care. The record for the matter reveals a Department of Children and Family Services investigation and juvenile dependency proceedings.

As temporary guardians, Burnett and Miller will oversee the general welfare of their grandson. This means that they may choose education, make health care and financial decisions and manage his residency and day-to-day activities. Upon the parent(s)’ recovery, a court can terminate the guardianship. If the disability persists, so too can the guardianship.

In cases of a death, a last will and testament states a testator’s choice of  guardian for his minor children. A last will also nominates a trustee to manage the minor’s assets. Many jurisdictions additionally provide the legal framework for the appointment of a standby guardian which permits immediate control to pass to the standby guardian who has no powers until a triggering event occurs. In cases of an incapacitated or gravely ill parent, the transfer of guardianship can happen quickly and with little to no court intervention. Of course, the appointment of a standby guardian takes foresight. In cases where an emergency arises, such as parents who fall ill, a petition must be made to the court, such as Burnett has pursued.

One  of the legal trends of COVID-19 has been the execution of last wills and testaments by families in order to provide for their children in the event of death. Many who work on the front lines have also executed standby guardian documents. In some states, orders have been enacted making standby guardian appointments easier to effectuate. For example, in New York, following the pandemic, an executive order permitted an individual to  appoint a standby guardian if the parent/guardian worked or volunteered in a healthcare facility or reasonably believed that they may otherwise be exposed to COVID-19.

Burnett’s appointment as temporary guardian is especially noteworthy because of her age. She is 87 years old, and her husband is 64. Many clients veer away from appointing an older generation as guardian, for fear of disability or illness, rendering the grandparents unable to serve. On the other hand, many grandparents make excellent choices for guardians because they are financially comfortable, retired, and feel a familial if not parental obligation to care for their own grandchild in a time of distress. Of course, being monetarily comfortable makes it easier  to be a guardian in the event a  grandparent opts to hire assistance such as a nanny or a tutor when raising young children.

Interestingly, Burnett herself grew up with her grandmother, Mabel Eudora White, moving in with her in Hollywood after her parents divorced. She eventually studied theatre at UCLA and became one of the most successful and influential comedic actresses of all time, shining on both stage and screen. She is likely most famous for her 1970s comedy sketch program, The Carol Burnett Show, which birthed and coddled many comic treasures, including the sit-com, appropriately named, Mama’s Family. Having won and been nominated for a multitude of Peabody, Emmy, Golden Globe, and Grammy awards, Burnett is also the namesake of the Hollywood Foreign Press Association’s Carol Burnett Award, for outstanding contributions to television. She has also received the Kennedy Center’s Mark Twain prize for American Humor. Having achieved all of this and more, at 87, it looks like Grandma raised her well.

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Cori A. Robinson is a solo practitioner having founded Cori A. Robinson PLLC, a New York and New Jersey law firm, in 2017. For more than a decade Cori has focused her law practice on trusts and estates and elder law including estate and Medicaid planning, probate and administration, estate litigation, and guardianships. She can be reached at cori@robinsonestatelaw.com.

Last week, a ruling out of the Seventh Circuit presented the latest example that this country is facing an increasingly theocratic judiciary seeking to expressly favor religion and religious citizens at the great expense of nonbelievers. To be clear, the case is only at the preliminary injunction stage, so the Seventh Circuit panel was not making a decision on the merits. However, where the panel did make legal conclusions, they were downright alarming. For example, Judge Diane Wood declared that the court is convinced “that the speech that accompanies religious exercise has a privileged position under the First Amendment.” If your alarm bells went off at the mention of a “privileged position” within the First Amendment just wait, because somehow this opinion gets even worse:

We conclude by explaining that a comparison between ordinary speech (including political speech, which all agree lies at the core of the First Amendment) and the speech aspect of religious activity reveals something more than an “apples to apples” matching. What we see instead is “speech” being compared to “speech plus,” where the “plus” is the protection that the First Amendment guarantees to religious exercise.

Declaring that religious expression is entitled to some special, privileged status within the First Amendment that is superior to political speech is incredibly difficult to justify. For one thing, the free speech law that I thought we were all operating under, seems pretty clear that unless it is determining whether certain speech falls into a narrowly defined list of historical exceptions, government is not supposed to be in the business of making viewpoint or content-based restrictions. Yet, if courts are granting better treatment to expressive gatherings simply because they contain religious speech than other expressive gatherings such as political ones, this would seem to be a pretty clear-cut case of content-based restriction. Furthermore, there is a long line of cases that contradict this supposed special status of religious speech where the Supreme Court has declared that religious speech and nonreligious must be treated equally.

The decision by this Seventh Circuit panel, however, is just one of several high-profile pandemic restriction cases involving religious gatherings. As I wrote about before, the argument used in a California case that church gatherings must be regulated in the same way as dissimilar activities such as commercial retail, was rightly rejected. Although another case out of Nevada was much more complicated, the fact that the church was arguing for the court to adopt a standard of impermissible religious discrimination that is facially easier to satisfy than racial discrimination should be viewed as a major flaw. Moreover, the other problem with the argument used by the church in Nevada that churches and casinos should be treated the same was, as the district court repeatedly said, any comparison of the state’s regulatory regime when it came to churches and casinos revealed that the state was much more “intrusive and expansive” with casinos.

Although churches have repeatedly lost these pandemic cases, however, it is important to point out that no court ruled against a church based on the premise that secular gatherings were in possession of some special or enhanced constitutional protection that religious ones were not entitled to. Therefore, whatever you think about the cases where the churches lost, none should be viewed as more alarming than the Seventh Circuit opinion which declared the Constitution favors religious gatherings and expression more than secular ones.

Of course, no one should be surprised with the Seventh Circuit panel either. The myth that this country was conceived as a religious (Judeo-Christian) exceptional country has long been accepted as fact by wide swaths of the population. I see the most recent iteration of this myth being trotted out time and again in the form of a quote taken from a speech given by John Adams declaring that: “Our Constitution was made only for a moral and religious People. It is wholly inadequate to the government of any other.”

The “thing” about this quote though, is nothing in the Constitution’s text supports such a view. In fact, given that the original Constitution prohibits requiring a religious oath to hold office, Adams’ view directly contradicts the plain language of the document (See U.S. CONST. art. VI, § 1, cl. 3: “[N]o religious Test shall ever be required as a Qualification to any Office or public Trust under the United States”). In practical terms, expressly prohibiting a religious test for office amounts to a direct statement that government cannot favor religion. It takes a massive, unsubstantiated leap therefore, and in direct contradiction to plain language, to argue that our government was made only for religious people, or that it may favor religion over nonreligion.

The bottom line is, even if your intentions are not malicious, granting special favor in the law to religion or trotting out inaccurate quotes that claim our government was only intended for religious people in a modern society where nonbelievers make up an ever increasing share of the population is damaging. The Constitution is a document wholly adequate to govern believers and nonbelievers, alike to the mutual benefit of both. But it cannot function that way as long as those who operate it insist, wrongly, that the document favors them, to the exclusion of others who do not share their religious beliefs.

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Tyler Broker’s work has been published in the Gonzaga Law Review, the Albany Law Review, and is forthcoming in the University of Memphis Law Review. Feel free to email him or follow him on Twitter to discuss his column.

As with last week’s interviewee, this week’s spotlight will be on another great example of lawyers identifying a market need and starting a business to meet that need. We are fortunate this week to have the opportunity to discuss another unique New York-based firm meeting a defined market niche, the recently opened litigation funding consultancy Avenue 33 LLC, with its founder, Rebecca Berrebi. Some background on both Avenue 33 and Rebecca to start.

First, a brief introduction to Avenue 33. As provided by Rebecca, “Avenue 33 (www.avenue33llc.com) is a consultancy that provides litigation finance expertise and insight to litigants, law firms, investors, and other stakeholders. From deal structuring, case and relationship management, all the way through to enforcement and monetization, Avenue 33 assists its clients [to] maximize the value of their litigation funding transactions. Avenue 33 is also available to usher new entrants into the market by providing guidance backed by extensive industry, business, and legal experience.”

As for Rebecca herself, her background and credentials are right on target for the work that Avenue 33 performs. She has worked in the business of litigation finance since 2016. Prior to founding Avenue 33, she was the head of corporate affairs at a leading litigation/arbitration fund manager with over $2 billion AUM, overseeing dozens of actual and potential cross-border, complex litigation and arbitration finance transactions. Rebecca has also served on several boards and committees of companies undergoing claims, including as the co-chair of the board of directors of Eco Oro Minerals Corp. (CSE: EOM).  In addition to her litigation finance experience, Rebecca has also worked in communications and politics, and she has practiced law. After graduating from Duke University, she worked in the political affairs and public relations industry at Edelman and a U.S. national political campaign. Upon obtaining her law degree from Benjamin N. Cardozo School of Law, Rebecca practiced as a private equity M&A lawyer at Kirkland & Ellis LLC and in the legal group of a global private equity fund.

As usual, I have added some brief commentary to Rebecca’s answer below but have otherwise presented her answer to my first question as she provided it.

GK: 1) Your background as a practicing lawyer with both Biglaw and litigation funder experience is formidable. What makes you most optimistic as you launch Avenue 33?

RB: Thank you, Gaston! My past experience as both a transactional lawyer and the head of corporate affairs at a dispute funding firm gives me a unique perspective on the litigation finance industry. Each litigation finance matter has at least three main stakeholders — the litigant, the investor, and the law firm — who may all want to see a big win, but whose individual incentives differ. I have seen firsthand how a well-drafted contract, mutual understanding among the parties, plus efficient management of a case can lead to significant success for everyone involved. Unfortunately, I also know that often litigants, funders, and lawyers come to the table with a different understanding of the purpose and use of funding, leading to wasted time, friction, and loss of value. I am optimistic that my clients can benefit from using my corporate legal background and litigation finance industry knowledge to level the playing field, so that all stakeholders can fully appreciate the risks and benefits of each given opportunity, leading to properly valued transactions, smoother relationships throughout a case, and maximized outcomes.

GK: As someone whose practice includes client-work related to litigation finance, I can testify firsthand for the need for Rebecca’s services. For one, it is sometimes lost on people in the maelstrom of seeking funding that the end result of all the diligence and effort will be the establishment of a contractual relationship — and a complicated one at that.

Moreover, getting the contract right is just the first step in the process of getting to a successful result, with all stakeholders needing to both live up to their end of the bargain in terms of the financial deal while also fighting to win the litigation itself. Having someone with Rebecca’s very apt and particular skill set involved in the process can only help keep things moving in the right direction, allowing each party to the transaction to focus on doing what they do best, whether that be writing the checks or arguing at trial. It is important to remember the inherently risky nature of litigation finance — for all parties, despite the sometimes rosy marketing employed by litigation funders looking for investment opportunities — and having an experienced hand involved in the process can only help a particular deal’s chances of success. In fact, anyone who brings someone of Rebecca’s caliber to the table would be sending a strong signal that they intend to do their utmost to get to a successful result, with full expectation that the counterparties will do the same. Put another way, when circumstances allow, I’d rather be the one with Avenue 33 on my side in a deal, rather than having to go it alone.

Next week, I will conclude my interview with Rebecca, focusing on how she sees the litigation funding space continue to evolve, as a result of both more regulation and more money at stake.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

I have $300,000 in loans, and I have no idea how I’ll start paying them off. I can’t work, so I can’t get health insurance. The whole time I was sick I was like, “What if I have to go to the hospital again?” People plan their lives around this exam. Now, on top of the stress of the pandemic, we’re unable to make money. Every single day I’m panicking.

— Jena Speiser, a 2020 graduate of NYU School of Law, in comments given to the New York Times related to what she’s suffering through in her attempts to take the bar exam during a pandemic. Speiser planned to apply to take the Massachusetts exam after being encouraged by the New York State Bar Asssociation to take the test in another state due to the unlikelihood of an in-person New York exam in July. She then fell ill with the coronavirus and was bedridden for weeks and later hospitalized, which caused her to miss the deadline to apply for New York’s online October exam. Speiser won’t be able to take the New York bar exam until February 2021, and has started babysitting in an attempt to earn money to repay her loans.

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

The ABA Journal reports that the South Carolina courts have disbarred attorney Jacob Leon Parrott based upon a history of sexual misconduct including indecent exposure and voyeurism.

The disbarment order, entered on August 12 but publicly reported over the weekend, is retroactive to his 2018 arrest for “indecent exposure for exposing his genitals and masturbating in public.”

The South Carolina Supreme Court cited two matters involving similar behavior in Parrott’s disciplinary history. In 1997, he was suspended for four months after he entered an Alford plea to a charge of simple assault and battery for pulling down a woman’s bathing suit three years earlier. The court also noted that he was previously accused of trying to pull off another woman’s bikini bottom in 1989 but was not prosecuted for that offense.

He was also previously suspended over upskirt photos and failing to report that arrest to professional licensing authorities.

It’s hard to believe that someone like this could have ever practiced law — it’s almost as if the bar exam and protecting the public from bad lawyers aren’t connected in any way. Weird.

(Check out the opinion on the next page.)

Lawyer is disbarred after history of indecent exposure, voyeurism [ABA Journal]

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

For years, Opera Solutions did business as a data analytics consulting company helping clients both in and out of healthcare. They include the Center for Medicare and Medicaid Services, where the company’s data analytics chops helped them score an operational analytics and fraud surveillance contract.

But financial mismanagement led creditors to come calling and ultimately one of them — a private equity firm based in San Francisco called White Oak Global Advisors — took over the company. In late 2018, Edward Scott, managing director at White Oak, was named CEO of Opera. [His LinkedIn profile has been amended recently to reflect that his tenure at White Oak ended in September.]

From then on, the company has been on a relentless makeover journey to present itself as an artificial intelligence, products company. It even got a new name — ElectrifAi (pronounced electrify). When Covid-19 emerged into the U.S. consciousness, the company began touting a product in the hospital world. But people who call themselves “whistleblowers” and decline to publicly identify their relationship with ElectrifAi say the emperor has no clothes. They allege that ElectrifAi (or Opera) has zero clinical experience historically and has never worked with imaging data, which is the very basis for the company’s PulmoAi product. But over the last six months, Scott and ElectrifAi’s senior executives have touted PulmoAi, which has no FDA clearance or approval, saying it can quickly diagnose Covid-19 in emergency rooms and help doctors make decisions about who needs hospitalization and who can be safely sent home.

The whistleblowers believe that PulmoAi and the way that it is being marketed is dangerous to people during a pandemic. Aside from their troubling allegations about the product, the group also claims that Scott’s managerial style has led to clients to stop renewing contracts.  Further, Scott’s racist attitude toward employees of Indian descent and other minorities has left employee morale at a nadir. An employment discrimination lawsuit filed on Aug. 24 corroborates the whistleblowers’ characterization alleging that Scott repeatedly called Indians, “dirty” and those in leadership positions that he fired after taking over as “the Indian Mafia.” 

For their part, the whistleblowers hope for Scott to be replaced by someone more capable, respectful and honest. Through a crisis communications expert with a formidable reputation, the company declared that PulmoAi is legitimate, is being used by unnamed healthcare entities, and is featured in Microsoft Azure’s cloud marketplace. ElectrifAi also denied all charges of racism, discrimination and misogyny as categorically false. 

“Automating early diagnoses of Covid-19”
In March, a public relations professional sent an attractive pitch — “Using computer vision, ElectrifAi has created a program that can detect pneumonia-like symptoms through CT scans of the lungs and are now working with hospitals worldwide to collect relevant images to further train the AI and fully automate early diagnoses of Covid-19 which presents similarly.”

Wow.

Rapid testing wasn’t as yet easily available, so this would be a phenomenal tool to have in ERs. But AI needs a lot of training and tons of data points. Given that Covid-19 was still relatively new, how could they get enough CT-scans to be able to train the data and distinguish it from pneumonia?  The PR person responded by borrowing from a post on the company’s LinkedIn page.

Using ElectrifAi’s “minimal model” technology, they’re able to train an AI with no more than 100 2D annotated images of various cross-sections of the lungs.

Wow again.

The public relations professional was pitching both an interview with Scott and a neuroradiological expert at Catholic Health Services of Long Island, a hospital group in New York. At the time, Catholic Health Services was just about to implement ElectrifAi’s PulmoAi technology meant for X-Rays in emergency rooms — any day now, I was told.

So a few weeks later, MedCity News published this story in early April that attempted to probe Scott’s declarations. In the interview, he provided no details about the technology, named no European hospitals or other overseas hospitals where he said the AI was trained and/or deployed. And Dr. Craig Sherman, service line director of Neuroradiology at Catholic Health Services, while “impressed” by the company’s tool and eager to deploy it imminently,  acknowledged he was a paid consultant of ElectrifAi. As soon as the bureaucratic paperwork could be dealt with, Sherman would be sending over X-Rays to ElectrifAi.

Five months after that interview with Sherman and Scott, it’s not clear whether Catholic Health Services of Long Island actually ever used ElectrifAi’s PulmoAi. After inviting me to connect on LinkedIn once the initial story was published in April, Dr. Sherman recently did not respond to messages. He did not respond to a call either.

Separately, after several weeks of unanswered voicemails and messages to media contacts at the health system, one responded:

Thanks for your inquiry. Please connect with those who you spoke with for your original story. – Greg Sleter, Public Relations & Brand Reputation Manager, Catholic Health Services

Sleter didn’t respond to a follow-up email.

“We are unapologetic for our innovation”
After the MedCity story published on April 6, a somewhat defensive and lengthy blog post emerged from ElectrifAi a few weeks later. The company’s main argument that they return to throughout the piece is that it’s just pure math, 1+ 1=2 and they are simply trying to help people.

John Quackenbush, Henry Pickering Walcott professor of computational biology and bioinformatics and chair, Department of Biostatistics, at the Harvard T.H. Chan School of Public Health, decoded the post. He found the arguments,  “pretty nonsensical.” In an email, he wrote:

• They claim they trained their algorithm with 10 Covid patients. Anyone doing machine learning will tell you that [the] sample size is far too small to draw any meaningful conclusions. They might argue that they distort the images and that they add noise, so the effective number is larger, but the question is whether this captures the diversity of images that one would see in practice. The answer is simply that ten of anything this complex isn’t enough. Will it work on a Siemens or a Phillips or a GE machine? At what settings? If the machine is new or old? If the patient has been on a ventilator? If they were a smoker? If they had emphysema?
• [They] claim they only trained with Covid images. So the question is what did they train against? Simply put, if the algorithm is designed to answer the question, “Yes or no, does my patient have Covid?”, then you need examples of both “Yes” and “No.” If the algorithm is trained on a data set where the only answer is “Yes,” then the only answer it can give is “Yes.”
• They state, “We have no interest in publishing research in an effort for self-promotion and peer accolades. Our sole interest to open up the technologies so they can help people around the world.” But they never make their code available and they haven’t published anything, so nobody has the opportunity to actually review what they have done and they certainly haven’t “opened up” any technology.

While ElectrifAi is not interested in publishing research for that would be self-promotional, it appears that executives don’t have any qualms promoting PulmoAi in non-academic, non-peer-reviewed settings. Between March and May, Scott and other executives have appeared in at least five podcasts including the Empowered Patient podcast, THINK Business with Jon Dwoskin, one hosted by AI recruiting and staffing company Alldus, and a YouTube video. Over a five-month period as of mid-August, the company had 14 LinkedIn posts specifically promoting its AI capability in healthcare, though healthcare is not the only industry it serves. There have been positive external news coverage as well. 

This marketing narrative including laudatory news articles is what the ElectrifAi whistleblowers want to counter. They believe that Scott sees the pandemic as an opportunity to be milked.

“The company has rapidly lost revenues since Ed Scott took over. There are hardly any new clients. Most existing clients have not renewed their projects with the company due to extremely combative new management,” alleged one whistleblower in an email. “[Pulmo AI] is one of those schemes to quickly showcase something seemingly disruptive and make a quick buck. This will not stand any reasonable questioning or unbiased peer reviews done by qualified personnel in the field.” 

Another added that historically the company has had no clinical expertise, let alone medical imaging expertise, that Scott et al are showcasing:

“ElectrifAi has had experience with text data — classification & clustering algorithms. We have never worked on any image related machine learning algorithms. Georgios Ouzounis was hired as an expert in the field but it seemed he wanted to use the company resources to create a product based on his Ph.D. thesis. There was no team in place and no tangible expertise in the analytics team for any sort of image recognition or image machine learning capabilities. Hence, any product using CT and X-Rays is just a marketing gimmick.” [Ouzounis is vice president of data science who has appeared in at least one podcast about ElectrifAi’s AI prowess in healthcare and Covid-19.] 

Another explained that in its previous incarnation — as Opera Solutions — the company developed a healthcare product, but not on the clinical side.

“Opera Solutions has a product for identifying missing charges in hospital bills. This was a result of an analytics consulting project that was productized. People who were involved in the development of the product have since left or have been fired.” 

This product is still in commercial use. Indeed the company’s website explains that it can help providers detect missed charges and boost revenue. In the March phone interview with Scott, I asked him to explain how a company goes from having billing, fraud detection and procurement software to diagnosing Covid-19 using CTs and X-Rays. It was a leap, I felt, and he bristled.

“We continue to innovate, Arundhati … and we are unapologetic for our innovation,” he declared.

It’s important to note that while the whistleblowers call into question the healthcare AI product, ElectrifAi has been accepted into the Inception accelerator program of a Silicon Valley AI heavy-hitter – Santa Clara-based Nvidia.

“Inception is a virtual accelerator program that supports over 6,000 startups using GPUs for AI and data science applications during different stages of product development, prototyping and deployment, but being part of the program does not mean the company’s technology or business model has been fully vetted by us,” said Hector Marinez, director of corporate communications at the firm, in an email.

“ElectrifAi is proud of the contributions it has made in the fight against Covid-19”
After several weeks of radio silence in which Scott did not return emails either sent directly or through the original public relations professional, response came from Michael Sitrick, the crisis management expert hired to ensure that ElectrifAi’s side of the story gets fair play. [Personnel at White Oak Global Advisors, which owns the company, and White Oak’s lawyers also didn’t respond to emails.]

Sitrick displays some of the not-so-complimentary media profiles of himself as the “Ninja Master of the Dark Art of Spin” prominently on the website of the company he founded and which bears his name. The Columbia Journalism Review describes his prowess and manipulative capabilities writing that “he specializes in crisis PR and has made a name for himself as the man you call when you have money and step in some s***.”[CJR spells out the word and this portrayal is also on Sitrick and Company’s website.]

Sitrick, only too aware of his reputation and how reporters are hard-wired to represent both sides, rushes in to say via email that he has blue-chip life science-industry clients like Amgen, Glaxo-Smith Kline, Anthem and Tenet Healthcare. But he and his firm have had less savory clientele too: Los Angeles Catholic archdiocese during the sexual abuse cover-up scandal; Harvey Weinstein until payments weren’t made, and R. Kelly.

No ElectrifAi executive was made available for an interview, but in an email from Sitrick, Jim McGowan, head of product at ElecrifAi, contended that PulmoAi technology has been “favorably received by healthcare providers inside and outside the U.S.” “A premier Cancer Institute” was “impressed;” ElectrifAi had “multiple calls with radiologists in [Italy], who showed intense interest.” But the company declined to name any institution or healthcare professional that it was working with.

McGowan said that ElectrifAi realized in mid-March that it’s “minimal model algorithm” doesn’t work with X-Rays but it was able to resolve the problem and this was tested by Microsoft and a “practicing radiologist” after which the product was successfully added to the Microsoft Azure marketplace.

“The product was granted two awards by Microsoft, including a $100,000 grant …,” said the email.

Only it wasn’t really a cash grant as the above suggests. An email from Shannon Fitzpatrick, senior healthcare partner development manager at Microsoft, that Sitrick forwarded when asked for proof, shows that it’s a credit. The email dated April 22 says Microsoft was offering ” a one-time Microsoft Azure monetary commitment credit to cover unexpected increases in Azure consumption that stem from the increased utilization of your solutions in the healthcare and life sciences.”

In other words, should people download PulmoAi from the Azure marketplace and use it so much that ElectrifAi’s cloud subscription fees increase, then Microsoft is willing to waive them for a year up to $100,000.

When reached by phone Fitzpatrick didn’t want to be quoted without express approval from Microsoft’s communications team. David Houlding, director of healthcare experiences who is responsible for healthcare products on Microsoft’s cloud platform similarly declined to comment. Neither Microsoft nor ElectrifAi would comment on how many PulmoAi downloads have occurred. But one thing is clear: Like Nvidia, Microsoft has not vetted the company’s Covid-19 AI technology.

McGowan also claimed that the company has communicated with the FDA to get an emergency use authorization but offered no proof of such communications — in fact, the blog post from late April shows that at least at that time, ElectrifAi officials never had any intention to go to the FDA.

These technologies are not “US FDA Approved.”

They could never be in the timeframe available to ever have an impact.

“Inadvertent exception”
If the technology is as valuable during Covid-19 as ElectrifAi executives claim, why is it that they won’t name any active users of the product or the radiologists and cancer centers it is working with? Sitrick has an easy answer: the company doesn’t have permission from those very individuals and institutions.

During the pandemic and attendant public health crisis, the healthcare industry has been more open than usual in naming technologies and platforms being used in the spirit of collaboration. Press releases are replete with tech vendors’ touting their tech being piloted here or deployed there, naming specific hospitals. ElectrifAi’s stance of complete secrecy is counter to that observed change.

The company’s reticence also flies in the face of the joint interview Scott and Dr. Craig Sherman, service line director of Neuroradiology at Catholic Health Services of Long Island did with MedCity News in the spring even before the X-Ray based PulmoAi tool was supposed to be pushed out to ERs across Catholic Health Services hospitals. [Recall that Sherman described himself as a paid consultant of ElectrifAi in the interview.] 

When asked to comment on this inconsistency Sitrick described is as an “inadvertent exception to the rule” of not naming clients without permission. [Which raises the question, did Sherman have the blessing of Catholic Health Services when he spoke to MedCity or was he speaking as a paid ElectrifAi consultant?]

“Opera is safe for White people Again”
Other than trying to peddle, what they believe is, a questionable AI product in a pandemic, the whistleblowers also charge that Scott engaged in threatening, racist, misogynistic behavior and introduced employee-tracking and monitoring products into the workspace. Their allegations are corroborated in an employment discrimination lawsuit filed on Aug. 24 by Aparna Kumar, a senior vice president at ElectrifAi. Kumar names not only various entities including ElectrifAi and White Oak Global Advisors as defendants but also Scott and Nancy Hornberger, executive vice president of revenue and co-head of healthcare in her civil complaint.

In the lawsuit Kumar, an Indian woman who became an American citizen in 2002, states that she was hired in 2008 and until recently was an account manager for ElectrifAi’s largest client, the Centers for Medicare & Medicaid Services, overseeing 34 employees. She describes her upward trajectory in the firm from business school intern to SVP, and then a sharp reversal of fortune when Scott took over as CEO in the Fall of 2018. She was demoted and her role taken over by white people, she charged, who were, in one case, recently hired. The complaint states that Scott used the words “dirty Indians” on multiple occasions as well as the term “Indian mafia” to refer to the company’s previous senior leadership. Here’s a specific example:

… in April 2019, Kumar and Scott had a one-on-one conversation in which Scott described a story of having rehired a former Company employee, who is White. Scott said to Kumar that he told the rehired employee, “I got rid of all the dirty Indians and it is safe for White people at Opera again.”

Scott fired hundreds of people of color, including Indians, and the racial animus appears to have been directed at employees of non-Indian descent as well. The complaint states that sometime in the spring of 2019, Scott fired a black woman who led an ElectrifAi team that contracted with Johnson & Johnson. Scott had previously referred to this woman as a “fat lazy Black bitch.”

If true, the allegation stands in stark contrast to ElectrifAi’s public posturing, where it has displayed support for the Black Lives Matter movement and separately for LGBTQ people on its LinkedIn page.

The complaint also notes how Scott had web cameras installed in the office seating area in the presence of employees, and in July 2019 instructed employees to install an application named Carbonite. This allowed him to replicate an employee’s computer hard drive and access websites that the individual visited. The company’s HR for a time was in essence just Scott – the complaint notes how the CEO “forced out” the head of human resources and the two remaining HR personnel resigned thereafter.

The lawsuit goes on to depict how over time, Kumar saw her role diminished and she was excluded from meetings with the very client — CMS — with whom she led the relationship on behalf of ElectrifAi. When folks from the CMS lauded her skill and expertise, Scott and others felt compelled to include Kumar in meetings only to sideline her thereafter. She cites numerous examples of Scott using the f-word in meetings and humiliating her, according to the complaint, while treating men very differently.  She was stripped of responsibilities last year and ultimately earlier this summer, Kumar was removed as the account manager for the HHS-CMS account and made Daily Project Director instead. She had held the account manager for the HHS-CMS account since 2016. While formally still a senior vice president, Kumar is supervised by Margaret Cox, a White woman who holds the title of vice president and now manages the HHS-CMS relationship, she asserts in the complaint.   

Kumar attempted to bring the discrimination and misogyny to the attention of White Oak Global Advisors and met with a lawyer hired by the private equity firm to air her concerns about her employment in 2019. That was Kathleen Einhorn, a lawyer from Genova Burns hired to investigate Scott on behalf of White Oak. When the hours-long interaction led to no discernible change – in fact she was removed from the Management Committee — Kumar then filed a complaint with the Equal Employment Opportunity Commission on or about Jan. 15, according to the complaint. The lawsuit was filed on Aug. 24. 

Einhorn did not return an email seeking comment. Neither did Pamela Hart who leads human resources at White Oak Global Advisors. Meanwhile, Kumar remains an ElectrifAi employee and is seeking punitive damages and other relief from the courts. Her attorney after initially responding to a call requesting an interview with Kumar stopped responding to subsequent queries.

Sitrick categorically denied Kumar’s allegations about Scott and his behavior, calling them “incendiary claims.” He provided what appear to be grainy screenshots of Kumar’s texts with Scott to disprove her depiction as a hapless employee victimized by a misogynistic, racist boss. This is from May 22, 2019, seven months after Scott joined as CEO:

The last line is One team, one Opera(the previous name of ElectrifAi.)

Another from Aug. 17, 2019

That was the last screenshot Sitrick shared showing Kumar being appreciative of Scott. Sitrick said that Kumar “remains one of the 5 highest paid employees in the company,” “about 40% of ElectrifAi’s workforce are women and that  “women hold 5 of the top 11 positions in the company.”

As mentioned above per the lawsuit, on “October 16, 2019, Kumar and three members of her team visited White Oak’s offices in Manhattan. They hoped to speak in-person to a high-level executive about Scott’s unlawful conduct.” Six days after that visit, ElectrifAi announced that the company was appointing female leaders to executive leadership positions. In advance of this story appearing and more than two weeks after India celebrated its 74th Independence Day on Aug. 15, ElectrifAi posted drawings of children of employees celebrating the day on its LinkedIn page.

“ElectrifAi’s infringement was and continues to be willful”
Kumar wouldn’t comment, but the whistleblowers allege that pleasing Scott was crucial to working at ElectrifAi. They also refer to his mercurial nature.

“To be honest, the atmosphere felt like Soviet Russia, where people who were praised one day would be replaced the next,” wrote a source in an email. “Things deteriorated further when entire lower/mid rung consultants were fired. Campus offers were also rescinded. After this, only sycophants who agreed with Ed were hired or were retained.”

While the employment discrimination lawsuit alleges many objectionable behaviors by Scott, it doesn’t address the efficacy or lack thereof of ElectrifAi’s PulmoAi product. Sitrick pushed back on many of the whistleblower’s allegations about the technology but did not address their central criticism: that ElectrifAi/Opera has historically no experience with medical imaging or with clinical diagnoses. 

The whistleblowers are a bit divided over why Scott and the senior leadership team at ElectrifAi are promoting a product they believe was built without real clinical expertise. Some say it’s a desperate ploy to garner revenue amid Electrifai’s falling business fortunes [which Sitrick denies] while others say it is an example of outright deception.

The latter perspective seems to have gotten some legs. On July 28, a Palo Alto, California company filed a breach of contract and trade secret misappropriation lawsuit against ElectrifAi.  The complaint states that Actian, a data integration, management and analytics company terminated a licensing contract with ElectrifAi in November 2019 because the latter failed to make payments and fees for the use of its products, among other reasons. Actian alleges that even after it terminated the licensing agreement, ElectrifAi is still using its products, thereby constituting an infringement of its software copyrights.

“ElectrifAi’s infringement was and continues to be willful and intentional,” the complaint declared.  

 Photo: ElectrifAi