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Whistleblower Lawsuit Claims Startup NantHealth ‘Fraudulent’

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February 9, 2015

NantHealth, owned by the world’s richest doctor Patric Soon-Shiong, is facing a lawsuit filed by former employees claiming the company is a fraud.

Nant claims to provide an opportunity unlike any other for cancer patients, blending advancements in technology, medical tracking, and other treatments intended to offer state-of-the-art care. Some claim the company is promising far more than it delivers.

Nant Accused of Fraud

The lawsuit, filed in Panama City, Florida, alleges that Nant is engaged in fraudulent activity and has broken health privacy and billing laws. The two former employees filing the suit said the company has ignored warnings concerning its products and that its technology violates privacy requirements under the Health Insurance Portability and Accountability Act of 1996. There are also claims it does not meet Food and Drug Administration regulations. One internal report commissioned by Nant’s owner found the technology to be a decade behind in capability and not ready for large enterprises or cloud deployment.

The suit further claims customers of Nant had threatened to end their relationship with the company and planned to warn others to do the same. It also alleges Nant and Soon-Shion’s charitable foundation defrauded the government by using money from the Centers for Medicare and Medicaid services unlawfully. The claim states the charitable foundation donated money to area hospitals that then purchase Nant products with matching funds.

There are also claims Nant uses misleading marketing materials that end up costing patients huge amounts of money for products and treatments that do not work

The plaintiffs in the case, a cohabitating couple and former senior level employees of Nant, held positions in the marketing and professionals services departments. They claim they were fired after taking their concerns about Nant products, marketing, and technology to the company’s executive vice president. They filed their lawsuit under the Florida law prohibiting companies from firing whistle blowing employees.

Nant Denies Claims and Hints at Ulterior Motives

Nant’s current Chief Operating Officer, Steve Curd, claims the suit was filed after the company fired the two employees for improper behavior and turned down a request by the two to pay $2 million to avoid “… a smear campaign filled with false and damaging information.” Curd explains the pair was employed with the company for less than a year and after their termination contacted the CEO and stated “I love what we are doing and believe in the company,” in an effort to regain employment. When the request failed, the demands were made for money and then the lawsuit was filed.

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