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January 29, 2014


IRS Gains Access to 60M Medical Records for Tax Fraud Investigation

The identity of one healthcare entity that filed a class action lawsuit against the Internal Revenue Service in March over allegedly seizing private records of 10 million Americans has been revealed. The lawsuit came after an extensive investigation into the company’s owner, who was indicted last summer on 13 counts of tax evasion for conspiracy and filing fraudulent tax returns.

Blaine Pollock, founder of Chula Vista, California based Three Rivers Provider Network transferred millions of dollars from his company’s accounts to secret offshore accounts for personal use. Pollock was anything but frugal, as he splurged on two yachts at $1.7 million and four homes across the U.S. and the Philippines for more than $9.6 million, among other things.

It is believed that Pollock transferred up to $7.1 million to various offshore accounts and nearly $2 million to domestic accounts for personal use.

The IRS began its investigation after three individuals with access to Pollock’s financial information sent his records to the IRS. The IRS executed four search warrants, one being at Three Rivers Provider Network, whose servers contained 60 million medical records of 10 million Americans, data protected under HIPAA.

As a result, U.S. Attorneys Laura E. Duffy and David D. Leshner asked the court for authorization to access the server, which was ultimately granted. However, Pollock’s attorney suggests these records were taken in violation of the warrant.

“The lawlessness of the government agents in this case” wrote Barnes in a July 22 opposition statement to the government’s request to view the computer server, “endangers the privacy of millions of Americans.” These Americans include, among others, California state judges, NBA and Screen Actors Guild employees, Barnes alleged.

Added Barnes, “A computer is conceptually indistinct from a filing cabinet; the right to seize financial records from the filing cabinet does not give the right to seize the entire filing cabinet, given that personal, privileged and confidential non-financial records will likely exist in the filing cabinet. Yet, that is precisely what the government did do, and seeks to do again, here.”

The U.S. government, disagrees. “Only evidence on the (server) that is within the scope of the search warrant will be provided to the prosecution team,” wrote Attorneys Duffy and Leshner in support of a motion to grant access to the computer.

Pollock pleaded not guilty to all 13 counts.

Tax Evasion