At one point, Sara Biden sent a person involved with fundraising a draft investor presentation “with a few minor revisions by Jim.” The presentation describes Jim Biden as a partner with Americore alongside a brief bio that begins by identifying him as “Brother and Campaign Finance Chair of former Vice President Joe Biden.”
‘Threatening the former vice president’
As the hunt for financing continued, Jim Biden increasingly focused on deep-pocketed investors from the Middle East. He said his connections there would help him land Americore a large investment, according to former Americore executive Tom Pritchard, who
spoke to POLITICO about the matter in 2020, as well as three other former executives at the company.
For help, he worked with a hedge fund manager, Michael Lewitt, with whom he was friendly, and Amer Rustom, the CEO of business development firm the Platinum Group, who has
boasted of ties to officials in the Middle East. Eventually, Lewitt and a group of Platinum-related companies committed to raise the $30 million for Americore, according to a complaint filed against Lewitt by the SEC.
Rustom did not respond to requests for comments sent to the Platinum Group.
In August of 2017, Jim Biden began workshopping a letter that Rustom was to deliver to Khaled Sultan Al Rabban, an official at the Qatar Investment Authority, according to emails obtained by POLITICO. He shared one version of the letter with White. A few days later, Sara Biden sent an updated version to Hunter Biden to review.
In this draft, which was among the documents found on Hunter Biden’s abandoned laptop, Jim Biden writes that, though the Bidens are not lobbyists, “My family could provide a wealth of introductions and business opportunities at the highest levels that I believe would be worthy of the interest of His Excellency.”
“On behalf of the Biden family, I welcome your interest here,” the letter states. Jim Biden’s representatives declined to respond to questions about his efforts to raise overseas capital, and the Qatar Investment Authority did not respond to a request for comment.
Whatever happened with the Qataris, months went by without an investment arriving. By January 2018, Americore was insolvent, according to the SEC’s complaint against Lewitt.
In the middle of that month, Lewitt’s fund extended Americore a lifeline in the form of a bridge loan, meant to hold it over until the real investment capital arrived. The size of the initial loan was $2 million, according to the SEC’s complaint.
A few days later, Americore wired Jim Biden $400,000. Bank records filed in Americore’s federal bankruptcy case describe the payment as a loan.
Around this time, Jim Biden — who has been variously described in internal documents and investor presentations as an Americore “partner,” “principal” and “advisor” — waded deeper into the business. He set up an office at Americore’s Fort Lauderdale headquarters and began participating in some hiring and firing decisions, interviews with former executives and emails show.
On March 1, Americore wired Jim Biden $200,000, again described in bank records as a loan. That same day, Jim Biden wrote a check to Joe Biden for $200,000, describing it as a loan repayment in the memo line.
The White House, which did not respond to questions about the transfer, has also characterized it as a loan repayment
in statements to
media outlets. POLITICO previously
reviewed bank records that show a $200,000 payment to Jim Biden from an account that appeared to belong to Joe Biden made several weeks earlier.
With Lewitt’s bridge funding keeping Americore afloat, the company continued to pursue a big overseas investment.
On Friday, March 9, Americore executives worked into the night to prepare materials for their investor pitch.
But according to a person present, those efforts hit a hitch when the company’s new financial officer, Tony Sudduth, refused to put together financial statements. Sudduth protested, the person said, that he had not been provided with enough information, such as bank records documenting the firm’s debts and revenues, to produce legitimate statements.
The next morning, a Saturday, Jim Biden summoned Sudduth to the office and fired him, according to emails and a person familiar with the situation. The firing set off a flurry of emails between Jim Biden, Americore executives and the company’s outside counsel.
In a memo drafted to memorialize the firing, Jim Biden wrote that White directed him to fire Sudduth. According to the memo, Jim Biden informed the ousted CFO that “The synergies weren’t right, and that for a myriad of reasons, some of which I may not even be fully aware, it was determined that it was necessary to terminate him.”
Two weeks later, Sudduth emailed Jim Biden and White to demand severance. “I have seen enough,” he wrote, “that I am pretty sure Americore’s partners would not welcome a public battle that will ultimately disclose and expose the complete workings of the organization.”
The email does not specify what Sudduth might expose, but a person familiar with the situation said that Sudduth had concluded during the course of his short tenure that the company’s business model was premised on overcharging for lab tests.
In a note to outside counsel, White remarked that Sudduth’s email, in which he alludes to the prominence of the Biden family, “reads like he is threatening the former vice president of the United States.”
Despite the company’s tight finances, Americore later drafted a severance agreement that offered Sudduth, who had worked there for about two months, $100,000.
Jim Biden’s representatives declined to respond to a question about Sudduth’s firing and Sudduth declined to comment.
At the time, the company still expected that a large cash infusion was imminent.
In late March, Jim Biden confirmed in an email to White that Americore would have a $30 million line of credit in place by mid-April to begin financing acquisitions.
But the money still did not materialize.
By mid-May, bickering began to ensue. White threatened to get financing elsewhere. Jim Biden responded with a soul-baring note, expressing hurt that White had undermined him in front of others.
“Believe it or not, I am a sensitive person where optics makes a big difference in my life,” he wrote.
He implored White to provide a more detailed financial picture of the operation, writing, “This kind of investment would generate a great deal of scrutiny both of the company’s financials and of me personally.” And he emphasized his own commitment to raising money for the company, writing, “I agreed to go to Qatar, Saudi Arabia and China (at my own expense).”
He also took exception to the suggestion that White did not need him. “I believe in my value” he wrote, “with the VA, Labor, the Blues, drug & rehab, the financial community, etc.”
A ‘blockage’ in Dubai
The strain reflected the company’s dire need for money as it awaited financing. The problem was made worse by pressure on its lab billing revenues.
Back in January 2018, the head of the Ellwood City Medical Center had emailed Americore executives, as well as the Langstons, with bad news: Blue Cross was suspending payments for lab services and refusing to pay for tests submitted by Ellwood’s lab that came from out-of-state patients.
The hospital in Pineville also faced financial problems. There, Americore had, without warning, stopped paying health insurance premiums for its Pineville employees. Staffers, who continued to have the premiums deducted from their paychecks, only learned of the problem when their insurance claims met with surprise rejections.
As a result, when the husband of one longtime employee, Betsy Marsee, died, her life insurance claim was denied, according to Pineville Mayor Scott Madon, a former executive at the hospital, and
a report in the Middlesboro News. Attempts to reach Marsee were unsuccessful.
In April of that year, the Kentucky labor department opened a criminal investigation into the unpaid premiums. The department did not respond to a request for comment.
As the financial strain grew, White increasingly came to rely on merchant cash advances — which in effect often amounted to high-interest loans — to keep his operation afloat.
In June, one of Americore’s lenders, GTR Source, obtained a $1.5 million judgment against it, one of several obtained by Americore’s creditors in New York. As a result, PNC Bank froze Ellwood City Hospital’s bank accounts, sparking panic inside the company and a protracted legal fight.
For a time, it appeared that financial relief was in sight as Lewitt tried to transfer funds between the United Arab Emirates and its neighbor, Qatar, in order to move them into the United States.
In late June, Lewitt wrote to Jim Biden and White, “We are working on moving the Dubai money into Qatar. The blockage is slowing things down but we are moving as quickly as we can… Amer would like me to join Jim for the presentation to the Finance Minister in Doha so as soon as we have the date I will plan my travel.”
Asked about the nature of the blockage, Lewitt declined to comment. Whatever issue was preventing Americore from accessing the overseas funds, it was not resolved in time to save the company.
Around this time, Jim Biden and Grant White were pursuing a more extensive partnership that would have given Jim Biden’s Lion Hall Group a roughly one-third stake in an Americore holding company that would own several subsidiaries, according to emails, documents and a proposed operating agreement, dated June 18, 2018, obtained by POLITICO.
Instead, on July 5, Jim Biden suddenly cut off contact with White altogether. “Based on information I have become aware of over the last several days, it has become increasingly clear to me that moving forward I can’t be involved with Americore,” he wrote.
Pritchard previously told POLITICO the departure was related to politics: “Jim needed to lay low because his brother was possibly running for president, and he didn’t need any bad press.”
That summer, Lewitt wrote in an email that emerged in later litigation that relations with White had soured because White had failed to disclose he had taken out merchant cash advances and generally managed the company’s finances poorly.
White declined to comment “for the time being.”
Despite the falling out with White, Jim Biden’s foray into health care was not over. He, Lewitt and Rustom continued to separately court two companies that had previously been in partnership talks with Americore.
Later, those companies sued Jim Biden, Lewitt, Rustom and others in federal court in Tennessee, alleging in filings that they engaged in a “classic fraudulent bait-and-switch.”
According to the Tennessee complaint, Jim Biden and his associates encouraged the two companies to make costly acquisitions while promising to fund them with an imminent overseas investment that never materialized. The complaint alleged that the intent of those actions was to drive the companies into bankruptcy so that Jim Biden and his associates could then take control of the companies.
Jim Biden and his associates denied wrongdoing in the Tennessee case, which settled on undisclosed terms.
‘Liquid gold’
While Jim Biden had cut off direct contact with Americore, the same was not true for all of his associates.
Lewitt’s fund lent the company additional funds, and Keaton Langston continued to provide lab testing services through Fountain Health.
But in the months after Jim Biden parted ways with White, Americore’s finances deteriorated, and scrutiny of its lab billing practices intensified.
In September, United Healthcare sent its hospital in Ellwood City an audit letter, obtained by POLITICO, saying that it was investigating a dramatic surge in billing claims for lab services that began in the third quarter of 2017.
A spokesman for the insurer, Bryan Fisher, declined to share the results of its investigation, citing the sensitivity of billing audits and the frequency with which their results attract attention from law enforcement.
Indeed, lab billing schemes have kept federal law enforcement officials busy in recent years, as loosely connected criminal networks swap tips about the most lucrative tests and the latest loopholes that people seeking to defraud Medicare can exploit to thwart detection.
Many of the schemes involve teams of marketers who fan out to well-trafficked locations like senior centers and health fairs and induce people, often the elderly, to provide cheek swabs on the promise of receiving a free disease screening. Another popular avenue for lab billing frauds in recent years has been drug testing, which can be so lucrative that some in the drug rehab have world taken to calling urine “liquid gold.”
At Americore’s hospital in Ellwood City, the alleged fraud had begun with drug tests, which were performed elsewhere and then billed to private insurers,
according to a complaint filed in federal bankruptcy court in Kentucky against Keaton Langston and others by Carol Fox, the DOJ-appointed trustee charged with overseeing Americore’s liquidation.