UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION UNITED STATES OF AMERICA, Plaintiff, Civil Action No. 3:18-01289 v. JUDGE CAMPBELL MAGISTRATE JUDGE NEWBERN MICHAEL KESTNER, et a1., Jury trial Defendants. DECLARATION OF PHILIP BANGLE 1, Philip Bangle, declare as follows: 1. I am competent to testify to the matters set forth herein, and I testify on personal knowledge, information, and belief. 2. I am an attorney in good standing, admitted to the Bar of this Court and the Tennessee Supreme Court. 3. I am an Assistant Attorney General with the Of?ce of the Tennessee Attorney General. 4. I am trial counsel for the State of Tennessee in a civil fraud case against Pain MD, LLC, MedManagement, Inc., Michael Kestner, Dr. Lisabeth Williams, and other related entities pursuing violations of the Tennessee Medicaid False Claims Act, Tenn. Code Ann. 71-5?1 81 to ?185. State of Tennessee v. Pain MD, LLC et CA. No. 2017?262 (Williamson Cnty. Cir. CL). 5. In that case, the court ordered defendants Pain MD and MedManagement to produce medical and certain business records in its storage facilities. (Att. 1, 5/30/2019 Order). 6. I became aware that Pain Chapter 7 trustee in its bankruptcy case sent letters to each of Pain storage facilities. I asked the trustee for copies of those letters on July 25, 2019, and he provided them the following day. 7. The language he used in those letters about disposal of the records caused me concern, so I immediately called the storage facilities on the telephone and was able to make contact with all of them. 8. My intention was to determine 1) whether any of the storage facilities had destroyed any records, 2) when Pain MD paid its last bill, and 3) how many boxes of records were at each facility. 9. Additionally, the State has sent each of the storage facilities a letter advising them to consult an attorney regarding their obligations under the Automatic Stay in bankruptcy (Att. 2, 4/12/2019 Gaske letter). Case Document 80 Filed 08/20/19 Page 1 of 2 PageID 659 10. On August 1, 2019, I spoke with Eva Westacott, an employee at Secure Storage Solutions in Lawrenceburg, Tennessee. She said she was glad she received my call, because, ?We were going to have someone burn it today.? 11. As of August 14, 2019, she has agreed to move the records out of the storage units and into another secure, locked location at Secure Storage Solutions? main of?ce building for the time being. 12. On August 7, 2019, I spoke with Barbara Allen, an employee at Stowaway Storage in Kingsport, Tennessee. She told me there were 209 legal-sized boxes of records. She said that 33 of the 209 were in ?ling cabinets and not actually in boxes, but ?by the box? is the unit Shred-It uses to estimate the cost of shredding documents. In an earlier telephone conversation with Ms. Allen, on August 1, 2019, she told me she had planned to call Shred-It and wanted to also call the trustee to see if he would pay the cost for shredding the records. 13. After I spoke with her, she has agreed not to have the records shred for the time being. 14. I do not believe, based solely on my telephone conversations with personnel at the storage facilities, that any facilities have yet destroyed any of the records for the time being, but I do not know for how long. The storage facilities are not being paid, and many cannot re-let their units. 15. Pain MD ceased payments to its storage facilities as of June 1, 2019, the day after the court?s May 30, 2019 order granting the State entry to Pain storage facilities for purposes of inspection and copying records. 16. At a hearing on August 1, 2019, I made the court and counsel for all defendants aware of the danger of imminent destruction of the records in Pain storage facilities. 17. I also put counsel for Pain MD, MedManagement, and Michael Kestner on notice of the danger of imminent destruction of its records in an August 13, 2019 email, stating: Thank you for your email clarifying your position regarding your obligation to comply with the Court?s May 30, 2019 Order. The May 30 Order addresses two categories of items that we understand are in storage facilities: (1) medical records for self-pay patients; and (2) documents pertaining to needle purchases. It is our understanding that Pain MD quit paying for the storage facilities as of June 1, 2019. These business records and medical records are in danger of imminent destruction. We put Pain MD and on notice of this danger at the August 1, 2019 hearing before the Court. Similarly, I believe the United States also made you aware of this danger by email yesterday. (Att. 3, 8/13/2019 Bangle email). I declare under penalty of perjury under the laws of the United States and the State of Tennessee that the foregoing statements are true and correct to the best of my information, knowledge, and belief. 11.3011 soda/UL 9/6 ?Iggy fngangle 5 523% Assi?ant Attorney General M- Tenness?f?ce of the Tennessee Attorney General 03., NOTARY 5? of du?a?V/?I 30/2 35 A 00 Case w! 7519 Page 2 of 2 PageID 660 Attachment 1 Case Document 80-1 Filed 08/20/19 Page 1 of 4 PageID 661 RECEIVED BY Judges' Chambers Fil ED Data: q/I/ at; I l'N THE CIRCUIT COURT FOR WILLIAMSON COUNTY, TENNESSEE AT FRANKLIN - lelg WW 29 PH 14:02 STATE OF TENNESSEE, ENTERED Plaintiff, Civil Action No. 2017-262 v. Judge Woodruff PAIN MD, LLC, MEDMANAGEMENT, INC., MID- SOUTH PAIN MANAGEMENT, P.C., CUMBERLAND BACK PAIN CLINIC, P.C., LEBANON BACK PAIN CLINIC, P.C., MICHAEL KESTNER, and LISABETH WILLIAMS nee SMOLENSKI, Jury Demand Defendants. ORDER THE COURT, haying considered the Plaintiff State of Tennessee?s motion to compel dis- covery (5/9/2019 Docket Entry), and for good cause shown, hereby GRANTS the motion and or- ders Pain MD, LLC and MedManagement, Inc., within ?ve days of entry of this Order, to: 1) Produce Dr. Williams? patient medical records for patients Dr. Williams treated in Vir- ginia from 2017-2018; 2) Produce Amy Self?s emails up to May 30, 2017 subject to the terms of the Court?s April 15, 2019 Order; 3) Provide the State with 1the address(es) of the location(s) of all facilities that might contain any document relating to the purchase of all needles used to perform any injection at any Pain MD, LLC or MedManagement, Inc. clinic and thereafter permit the State to enter such facilities for the purpose of inspecting and copying records; Page 1 of 3 Case Document 80-1 Filed 08/20/19 Page 2 of 4 PageID 662 4} Provide the State with the address(es) of the location(s) of all facilities that might contain any self?pay patient records for any Pain MD, LLC or MedManagement, Inc. clinic or pro- vider and thereafter permit the State to enter such facilities for the purpose of inspecting and cepying records; and 5) Produce to the State?s eDiscovery vendor, currently Legility, temporarily for the purpose of imaging, every mobile phone paid for by Pain MD, LLC or MedManagement, Inc. since May 30, 2017. The State shall thereafter have access to review the contents within the scope of its discovery requests subject to the terms of the Court?s April 15, 2019 Or- der. THE COURT FURTHER ORDERS that the above Order compelling discovery is stayed pend- ing ?thher order of the Court subject to brie?ng about whether any of the documents above are subject to the protections provided by the Fifth Amendment to the United States Constitution and any similar protections provided under the Tennessee State Constitution. Brie?ng shall be on the following schedule: 1) Michael Kestner, Pain MD, LLC, and MedManagement, Inc. shall ?le and serve their brief on or before June 6, 2019. The Defendants? brief may be ?led under seal, but Defendants shall deliver a copy to chambers. 2) The State of Tennessee?s responsive brief, if it chooses to respond, shall be ?led and served on une 13, 2019. If the Defendants? brief is ?led under seal, the State of Ten- nessee shall ?le its responsive brief under seal and shall deliver a copy to chambers. IT IS so ORDERED, this? day of 2019. EPH Judge Page 2 of 3 Case 3:18-cv-01289 Document 80-1 Filed 08/20/19 Page 3 of 4 PageID 663 APPROVED FOR ENTRY (Q 2611 Tony Hullenderk Philip Bangle Steve Jobe Medicaid Fraud Integrity Division Of?ce of the Tennessee Attorney General BO. Box 20207 Nashville, Tennessee 37202-0207 Philip.Bangle@ag.tn.gov SteveJobe@ag.tn.gov the State (yr Tennmee NLPH Jay 8. Bowen Will Parsons Lauren Kilgore John Paul Nef?en Shackelford, Bowen, McKinley Norton 47 Music Square East Nashville, Tennessee 37203 JBowen@shackelfordlaw.net WParsons@shackelfordlaw.net Lliilgore@shackelfordlaw.net (g rth-c (watch/47F?- '11,,ch Thomas A. Wiseman Kimberly G. Silvus Brooke McCleod Coplon Wiseman Ashworth Law Group, PLC 511 Union Street, Suite 800 Nashville, Tennessee 37219 Tom@wisemanashworth.com Kimberly@wisemanashworth.com Brooke@wisemanashworth.com Attamgn?r Dr. Maker!) Wif?mm, Mid- J'ontb Pain Management, P.C., Lebanon Back Pain Clinig RC, and Cruniwrfand Back Pain Clinic; RC. me??f kh- Attamgr?r Dg?wdnm?: Mirnna! Kertner, Pain MD, LLC, and Inc. Rage 3 of3 Case Document 80-1 Filed 08/20/19 Page 4 of 4 PageID 664 ATTACHMENT 2 Case 3:18-cv-01289 Document 80-2 Filed 08/20/19 Page 1 of 3 PageID 665 STATE OF TENNESSEE Office of the Attorney General HERBERT H. SLATERY ATTORNEY GENERAL AND REPORTER P.O. BOX 20207. NASHVILLE. TN 37202 TELEPHONE (615)741-3491 FACSIMILE (615)741-2009 August 12, 2019 All American Storage Units #132, #134 2005 Fisk Road Cookeville, TN 38501 Re: In re Pain MD, .LLC, Bankr. M.D. Tenn. Case No. 19-00016 Dear Sir or Madam, You may be in receipt of a letter dated June 25, 2019, from David G. Rogers, Chap- ter 7 Bankruptcy Trustee (?Trustee?) for Pain MD, LLC, Case No. 19-03 841 in the United States Bankruptcy Court for the Middle District of Tennessee. That letter indicated that your storage facility may house records that contain sensitive medical information and that ?[y]ou should consult an attorney as to your responsibilities as to disposal of same.? The Trustee has since ?led a July 26, 2019, Motion to Abandon Medical Records (attached). On August 2, 2019, United States Bankruptcy Judge Randal S. Mash- burn ordered that a hearing would be held on this Motion at 9:00 am. on August 27, 2019, in Courtroom One, Customs House, 701 Broadway, Nashville, Tennes- see. Since June 25, 2019, the Of?ce of the Attorney General has received credible in- formation indicating that such records were at risk of imminent destruction prior to the Bankruptcy Court?s August 27, 2019, scheduled hearing. The Of?ce of the Attorney General wishes to maintain these records in their current state to protect patient confidentiality and preserve evidence. Thus, you should consult an attorney regarding your responsibilities under the Bankruptcy Code?s automatic stay. Case 3:19-bk-03841 Doc 56?4 Filed 08/16/19 Entered 08/16/19 16:38:30 Desc 4 Case ?ame/20m E?aaerZQide PageID 666 Please have your attorney contact me with any questions. Sincerely, Matthew R. Gaske Assistant Attorney General PO. Box 20207 Nashville, Tennessee 37202 (615) 253-6121 Case 3:19-bk-03841 Doc 56-4 Filed 08/16/19 Entered 16:38:30 Desc 4 Case PageID 667 ATTACHMENT 3 Case 3:18-cv-01289 Document 80-3 Filed 08/20/19 Page 1 of 3 PageID 668 Philip Bangle From: Philip Bangle Sent: Tuesday, August 13, 2019 4:29 PM To: John Nefflen Cc: Jay Bowen; Lauren Kilgore; David Rogers; 'Bob Mendes'; Steve Jobe; Matthew R. Gaske Subject: RE: Pain MD State of Tennessee John Thank you for your email clarifying your position regarding your obligation to comply with the Court?s May 30 Order. The May 30 Order addresses two categories of items that we understand are in storage facilities: (1) medical records for self-pay patients; and (2) documents pertaining to needle purchases. It is our understanding that Pain MD quit paying for the storage facilities as of June 1, 2019. These business records and medical records are in danger of destruction. We put Pain MD and on notice of this danger at the August 1 hearing before the Court. Similarly, I believe the United States also made you aware of this danger by email yesterday. In addition, however, the May 30 Order addresses three other categories of items that, to our understanding, are not in storage facilities: (1) copies of Amy Self? 5 emails, which we understand Shackelford Bowen already prepared for production to us several months ago by placing them on a USB drive; (2) copies of Dr. Williams? Virginia patient medical records from 2017-2018, which we understand Shackelford Bowen already prepared for production to us several months ago by placing them on a USB drive; and (3) Pain and MMi?s mobile phones, which the Court ordered produced temporarily to the State?s eDiscovery vendor for the purpose of imaging, after which they would be returned. We have spoken with the Trustee, David Rogers, about these three categories of items. It is our understanding that David does not have any of these items. It is our further understanding that these items are not part of the bankruptcy estate and producing them?as the May 30 Order requires?will not interfere with the administration of the estate. David, can you con?rm? Lastly, although you state that you will have to wait until the August 27 hearing on the Trustee?s motion ?for further instruction from the bankruptcy court? before you can release any documents in your possession, we note that the motion pertains to ?pre-2014 PainMD medical records in multiple storage units in North Carolina, Tennessee and Virginia.? The motion does not address the USB drives, the mobile phones, or the documents pertaining to needle purchases. Philip Bangle Assistant Attorney General Of?ce of the Tennessee Attorney General PO. Box 20207 Nashville, Tennessee 37202 (615) 741-3054 From: John Nefflen Sent: Tuesday, August 13, 2019 10:37 AM To: Philip Bangle Cc: Jay Bowen Lauren Kilgore David Rogers 'Bob Mendes' Subject: Pain MD State of Tennessee 1 Case Document 80-3 Filed 08/20/19 Page 2 of 3 PageID 669 Philip, As you know, we have filed a motion to withdraw as counsel for Pain MD and MMI. As a result of Pain bankruptcy, the items listed in the Court?s May 30, 2019 Order are part of the bankruptcy estate and are in the control of the Trustee, David Rogers (copied). We have advised Pain MD and MMI of the need preserve all documents. However, those entities are without funds and are no longer in business. We have also advised the Trustee and Pain bankruptcy counsel, Bob Mendes (copied), of the ongoing litigation and the need to preserve documents. We will have to wait until the August 27 hearing on the Trustee's Motion for further instruction from the bankruptcy court before we can release any documents in our possession. Please give me a call if you would like to further discuss this matter. John P. Nefflen, Esq. Shackelford Bowen McKinley Norton, LLP 47 Music Square East Nashville, TN 37203 Direct: (615) 850-2295 Mobile: (615) 268-5349 Fax: (615) 329-4485 inefflen@shackelford.law Website: {Shackelford SHACKELFORD BOWEN NORTON, LLP E-MAIL NOTICE - This transmission may be: (1) subject to the Attorney-Client Privilege, (2) an attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you may not disclose, print, copy or disseminate this information. If you have received this in error, please reply and notify the sender (only) and delete the message. Unauthorized interception of this e-mail is a violation of federal criminal law. 2 Case Document 80-3 Filed 08/20/19 Page 3 of 3 PagelD 670