U.S. agents raid offices of McMillen firm in D.C. Action was part of health fraud probe, investigator says

November 19, 1997|By Tom Bowman and Ellen Gamerman | Tom Bowman and Ellen Gamerman,SUN NATIONAL STAFF Sun staff writers Mark Matthews, Scott Higham and Carl M. Cannon and research librarian Robert Schrott contributed to this article.

WASHINGTON -- Federal agents descended yesterday on the Capitol Hill offices of the Complete Wellness Centers, a medical management company headed by former Rep. Tom McMillen of Maryland and spent nine hours seizing records and computers as part of a health care fraud investigation, a federal investigator said.

The details surrounding the raid were sketchy, and one official said all affidavits and search warrants had been sealed. The investigation is being handled by the U.S. attorney's office in Northern Virginia, which could not be reached for comment last night.

Nearly a dozen agents from the U.S. Postal Investigative Service and the Defense Department Criminal Investigative Service seized the records at 725 Independence Ave., according to witnesses and sources involved in the investigation. Officials from the Department of Health and Human Services and Office of Personnel Management are also involved in the inquiry.

McMillen, 44, who is co-chairman of the President's Council on Physical Fitness, is listed as chief executive and chief financial officer of the company. From 1986 to 1992 he served as a Democratic congressman representing Anne Arundel County and part of Prince George's County.

McMillen was in Los Angeles last night to attend a wellness conference and could not be reached for comment.

"He doesn't have the foggiest notion what this is about," said Robert A. Libauer, a consultant and stockholder with the company, who said company officials have discussed the raid with the former congressman.

"No one has any idea what this is about," said Libauer, a retired investment banker who lives in Baltimore. "There was no indication we had any problems."

Libauer said he spoke last night with another company director -- Robert J. Mrazek, a former New York Democratic congressman -- who said he was equally puzzled by the seizures. "He doesn't know what it's all about."

Libauer said company attorneys would issue a statement this morning.

A source familiar with the raid said law enforcement officers entered the company headquarters around 10: 30 a.m. and asked about a dozen employees working there whether they had seen any "illegal activities." Authorities barred the employees throughout the day from alerting clients to the raid, the source said.

Last night, a burly federal officer standing outside the company's office in a Capitol Hill townhouse would say only that he was with the Pentagon's Criminal Investigative Service. Inside, agents removed boxes and suitcases full of records, along with computers. They later placed the materials inside cars and drove away.

Eric S. Kaplan, a senior vice president of the company, condemned what he called "Gestapo-ish" tactics of the raid. He said that the company had not been warned of the search and that employees were subjected to a "form of harassment."

Kaplan, who has been a colleague of McMillen's for more than three years, defended McMillen as an upstanding and moral businessman.

"I swear on my children, I have never met a more honest and ethical man," said Kaplan, reached at his home in West Palm Beach, Fla. "I'd throw myself in front of a car for him and his integrity."

Complete Wellness Centers Inc. is a 3-year-old health care organization that provides traditional medicine and alternative care such as acupuncture and chiropractic treatment. The company began with six clinics around the country and has since expanded to 135.

Within the last year, Libauer said, the company also purchased Smokenders, a company set up to provide services for people to try to stop smoking.

McMillen represented what was then Maryland's 4th District for six years. He was unseated in 1992 by Rep. Wayne T. Gilchrest, a Republican, after the district had been redrawn.

In late July, McMillen was arrested on a charge of simple assault after a friend told police that McMillen had pushed her down the stairs during an argument in his Capitol Hill home. He was kept in police custody for 12 hours. Prosecutors dropped the case after the woman later told authorities she did not want to press charges.

A Rhodes scholar and former University of Maryland basketball star, McMillen played professionally for the former Washington Bullets. In 1993, President Clinton named him co-chairman of the President's Council on Physical Fitness and Sports.

Pub Date: 11/19/97

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