A twenty-eight year old Floridian, John Andrew Welden, who forged a drug prescription with fatal consequences is now facing murder charges. The prospects of criminal charges for the pharmacists and health care bureaucrats who did not follow laws to prevent prescription of the fatal pills is not yet known.
This sad single case follows the first phase of a sweeping counterattack on medical fraud detailed by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius on May 14. The dynamic duo told journalists that 1,500 people have been arrested in connection to medical fraud schemes, including many doctors and individuals pretending to be doctors. Weldon also pretended to be a doctor, but no one challenged his claim in time to save a life.
While many Americans could benefit from this long overdue action, the DOJ’s “no excuses” policy has special importance for former NFL players whose physical condition prompted bad advice to create a so-called “Special Needs Trust.” These types of trust vehicles were designed so that the former athletes receiving payments do not have to pay taxes on trust funds used for physical therapy, pain treatments and other expenditures normally subject to limitations on income tax deductions. But in many cases, the annual management fees of $10,000 or more far exceed the potential tax savings.
Careless forwarding of boilerplate “Special Needs Trust” documents by Academy of Special Needs office assistants has uncovered a likely cause of the high rate of bankruptcy among some retired professional athletes from the NFL and other leagues. The NFL has disclosed that over three-quarters of retired NFL players file for bankruptcy or are insolvent following their football careers.
High ongoing medical and physical therapy expenses make some former athletes bankrupt all on their own. But predatory clauses buried in the lengthy “Special Needs Trust” documents can also ambush unsuspecting athletes with schemes that result in bankruptcy. The text above is the textbook definition of “self-dealing.” It states that the so-called professionals managing the trust can arbitrarily declare that assets in the trust like a timeshare, sports memorabilia, contact lists, club memberships or a Maserati are worth little or nothing and then turn around and sell the assets to a business or trust that the manager owns or a relative or business partner of the manager owns. Would you like to buy a 2011 Maserati for just $100? Most people would, but only the managers of these kinds of “Special Needs Trusts” have been able to get away with it.
While this kind of “self-dealing” is prohibited by international treaty, Canada is the only foreign country that has substantial interaction with the NFL. More vigorous efforts by the U.S. Department of Justice to hold organizations that claim that are acting in the interests of patients’ health may be the most effective way to combat player abuse in the future.