Virginia Tech Settles Ex-Worker's Discrimination Suit - NBC29 WVIR Charlottesville, VA News, Sports and Weather

Virginia Tech Settles Ex-Worker's Discrimination Suit

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ROANOKE, Va. (AP) - Virginia Tech has settled a former employee's lawsuit that claimed she was paid less than male co-workers and faced retaliation when she complained.

The Roanoke Times  reports that Virginia Tech paid $55,000 to Shana Maron and $100,000 to her attorneys in August. The Blacksburg school denied that there was any retaliation.

The newspaper says Virginia Tech spokesman Larry Hincker released the agreement Tuesday under the state open records act.

Maron's attorney declined to comment.

According to the agreement, both sides wanted to end the case rather than hold a third trial.

The previous trials were held in 2011 and 2012 in U.S. District Court in Roanoke.

Maron filed the lawsuit in 2008 after she resigned.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Information from: The Roanoke Times, http://www.roanoke.com



Department of Justice Press Release

ABINGDON, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that GMSouthwest Inc., and the company's CEO and former owner, have pled guilty to charges of racketeering and money laundering.

In a 57-count indictment filed April 8, 2013, John Paul Gutschlag Sr., 73, of Aubrey, Texas and GM-Southwest Inc., were charged with racketeering, wire fraud, mail fraud, money laundering and conspiracy charges. Today in District Court, Gutschlag pled guilty to one count of conspiracy to violate the Racketeering Act and two counts of money laundering by engaging in monetary transactions involving  property derived from wire and mail fraud. In addition, GM-Southwest, through its corporate counsel, pled  guilty to the same three charges.

"Mr. Gutschlag and GM-Southwest bilked Virginia Tech and thousands of the university's students  out of more than a million dollars," United States Attorney Timothy J. Heaphy said today. "This conspiracy was sophisticated and wide-ranging and caused considerable harm to its victims. In an age where health care costs are rising for each and every American, the Department of Justice will do  everything possible to identify and prosecute waste, fraud and abuse in the health care delivery system."

"Healthcare is a very important issue for students, parents and the public. Mr. Gutschlag and GMSouthwest's conspiracy negatively impacted thousands of students who depended on them to provide a very important service," said Thomas J. Kelly, Special Agent in Charge of the IRS-Criminal Investigation,  Washington DC Field Office. "IRS-CI will continue to work closely with the US Attorney's Office to investigate corporate fraud and to hold corporations and executives accountable for complying with the  law."

According to evidence presented at today's guilty plea hearing by Assistant United States Attorney  Anthony Giorno, GM-Southwest was in the business of collecting health insurance premiums from students and universities, paying claims and providing reports related to the premium collection and claims payment both to the university and the carriers. The carriers, in turn, paid GM-Southwest a set commission or fee, typically a percentage of the gross premium collected. From August 2003 through the end of the 2010-2011 school year, GM-Southwest, under the direction of Gutschlag, provided student health  insurance for Virginia Tech's undergraduate and graduate students.

Today in District Court, the defendants admitted that beginning in 2005, Gutschlag, and others,  devised a scheme to defraud colleges and universities by providing false and fraudulent claims reports and  other misrepresentations designed to increase the income of GM-Southwest and to personally enrich Gutschlag. They did this by devising and utilizing a "claims modifier" to alter the claims numbers to produce an inflated dollar amount which overstated the claims paid and loss ratios, causing students and Virginia Tech to pay significantly higher premium costs.

 Gutschlag and GM-Southwest admitted to overstating the amount of claims paid on behalf of Virginia Tech by over $1 million from 2003-2004 through the 2009-2010 academic years. The plea  agreement provides for restitution to Virginia Tech and the students in the amount of $1.2 million and  forfeiture of an additional $1.2 million to the government. The defendants agreed that the restitution figure agreed to by the government would not prevent Virginia Tech or the students from seeking  additional restitution through the civil courts.

 In a related matter, in July 2013, James Lane, of Botetourt, Va., entered into a deferred prosecution agreement with the United States for his role in the fraud. He has paid $250,000 to Virginia Tech as restitution for his conduct. This is in addition to the restitution to be paid the Gutschlag and GMS. Lane also pled guilty to one-count of filing a false tax return for tax year 2008 and one count of filing a false tax return for tax year 2009.

In addition, Carolyn Beck , Gutschlag Sr.'s administrative assistant, has previously pled guilty to one count of conspiracy to commit wire fraud, mail fraud and money laundering. Beck had access to the  false premiums and claims data on the GM-Southwest computer system at the company's office in Texas.  At Gutschlag's direction, she provided false claims reports to Lane, who in turn provided the false reports to Virginia Tech.

 At sentencing, Gutschlag faces a maximum possible penalty of up to 20 years in prison on the racketeering charge and up to 10 years in prison on each of the money laundering charges.

The investigation of the case is being conducted by the SA Phillip Barnett of the Internal Revenue Service Criminal Investigation. Assistant United States Attorneys Anthony Giorno and Randy Ramseyer  prosecuted the case for the United States.

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