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The case against the Whittemores and the importance to the neuro-immune disease community

Sunday 5 February 2012


From Age of Autism:


GavelThe Case Against the Whittemores and the Importance to the Neuro-Immune Disease Community

By Kent Heckenlively, Esq.

The Reno Gazette-Journal and the Las Vegas Review Journal are both reporting that Harvey and Annette Whittemore, founders of the Whittemore-Peterson Institute for Neuro-Immune Diseases at the University of Nevada/Reno have been sued by their former business partners for embezzlement in the amount of more than 40 million dollars. The articles can be accessed HERE.

This development may have an enormous impact on the ME/CFS community (myalgic encephelomyelitis/chronic fatigue syndrome) and also end up being of great importance to the autism community.

The readers of this blog will no doubt be aware that Dr. Judy Mikovits, the former research director of the Whittemore-Peterson Institute presented information at a poster session of the First International Conference on XMRV in September of 2010 that in a small study 14 out of 17 children with autism, who had parents with ME/CFS, tested positive for signs of a retroviral infection. (This was in addition to her reporting that 66 out of 101 patients with ME/CFS showed signs of retroviral infection. The research was published in the journal Science. It has since been retracted, although further research is continuing, and the controversy shows little sign of abating.)

The outcry that research into this possible retroviral connection to neuro-immune diseases has often reached fever pitch. Accusations of contamination, and counter-claims of government cover-ups based on concerns that the retrovirus might be contained in vaccines or that vaccinations might cause the virus to flare-up, and fears of enormous corporate and governmental liability have filled the news. When the news reported that Dr. Mikovits was first fired by the Whittemores, then sued for theft of intellectual property, and eventually jailed for five days, many may have wondered if everybody involved had lost their collective mind.

However, even scientific figures like Dr. John Coffin, who had sharply questioned Dr. Mikovits' work were reportedly critical that a researcher would be jailed in a dispute over intellectual property. These matters are generally settled in a civil court, rather than a criminal court. The fact that the Whittemores were able to find a judge willing to take such an unusual step raises other disturbing questions as well.

Harvey Whittemore's position as one of the most politically influential men in Nevada, often identified among a group nicknamed the "Power Rangers", (after the popular Saturday morning cartoon show) further added to suspicions among the patient community that Dr. Mikovits had in some way run afoul of the Whittemores and was now being unfairly punished by them. The Whittemores are also long-time friends of Senator Harry Reid, majority leader of the United States Senate.

Added to this mix is the common practice that while institutes own the results of research by scientists employed by them, the scientists are entitled to copies of their work. According to accounts, Mikovits was not allowed to take a copy of her work. While the story is still murky in several respects it doesn't seem that all of this drama would be taking place if the research was fundamentally flawed.

In my opinion there are only one of two possibilities regarding the research into a retrovirus and neuro-immune diseases; either it is of great importance, or it is not. Everything else is unimportant, at least, to the members of the neuro-immune disease communities who suffer with their maladies every day.

The charges against Dr. Mikovits have been spread around the world even before the case has been heard. In determining the truth or falsity of a accusation against a person one generally needs to consider the character of the person making the claim. While the accusations against the Whittemores are similarly unproven, the fact remains that such charges have been made and they are a part of the public record, just as they are with Dr. Mikovits. As this is a matter of public interest and comment I think it is relevant to share what is already in the public record and let the reader come to their own conclusion.

According to the Reno Gazette-Journal the Whittemores have claimed "These allegations are false. We will take any and all steps necessary to preserve the reputation for integrity that we have built in this state for over 40 years."

The forty-two page complaint was filed on January 27, 2012 in Clark County, Nevada and a copy of this publicly available document was obtained. It can read in its entirety HERE.

Harvey Whittemore was a manager of the Wingfield Nevada Group Holding Company, a limited liability company along with developers Thomas A. Seeno and Albert D. Seeno, Jr.

The general overview of the complaint states, "Whittemore has admitted and confessed to engaging in over 20 different financial transactions designed to deplete Wingfield of its assets for the sole purpose of enhancing and promoting Whittemore's financial condition and to further his standing in the political community of Nevada. By engaging in misappropriation of corporate assets, by misusing and exploiting corporate assets, by failing to document corporate and personal transactions, by misleading and lying to other Wingfield owners and employees, by discouraging employees from disclosing key facts to the other Wingfield owners, and by using the bank accounts of Wingfield for his personal purposes, Whittemore has breached his fiduciary duties to Wingfield and its owners, has committed a series of fraudulent transactions designed to financially harm plaintiffs, and has conspired to use Wingfield improperly and illegally advance his personal and financial interests."

The specific acts of financial misconduct alleged in the complaint include:

Approximately $2,179,898.19 for unreimbursed air expenses for family and friends.

Approximately $346,546.73 for unreimbursed air expenses for personnel of the Whittemore-Peterson Institute.

The unauthorized use of Wingfield personnel for the Whittemore-Peterson Institute.

The unauthorized payment of an outside agency to assist with lobbying, public relations and marketing which was supposed to be used by Wingfield was instead utilized by the Whittemore-Peterson Institute. Although no dollar amount has been set for the hours the Seenos claim were misappropriated, the agency charged a $70,000 monthly retainer and over the course of five years approximately $3,986,504.16 was paid to this agency.

Approximately 75% of the salary of Dr. Judy Mikovits, a research scientist at the Whittemore-Peterson Institute, was paid by Wingfield, as well as moving expenses of approximately $42,000. Further investigation is continuing on payments made by Wingfield to other employees of the Whittemore-Peterson Institute.

The unauthorized withdrawal of $450,000 by Harvey Whittemore between March and July of 2007.

Payment above and beyond Harvey Whittemore's agreed upon salary which over the course of seven years amount to more than $900,000.

Certain contractual agreements which would be to the benefit of the Whittemores, but not the Seenos, in relation to a project undertaken with the Nicklaus Design Group.

Fees which should have gone to an entity controlled by the Seenos, but which instead were appropriated by Harvey Whittemore. The amount is believed to total approximately $100,000.

Money that Harvey Whittemore withdrew in cash which he later instructed Wingfield employees to charge to company meals and entertainment expenses. In 2006 the amount was approximately $315,000, in 2007 it was approximately $115,000, in 2008 appoximately $80,000, in 2009 approximately $60,000, and in 2010 it was approximately $16,000.

Use of the Wingfield owned restaurant at Red Hawk golf course in Sparks, Nevada "for extravagant, non-company related private parties, family dinners, and other family events as well as political and campaign fundraisers" in the amount of at least $572,000.

Use of the Wingfield owned restaurant at the Red Hawk golf course for events of the Whittemore-Peterson Institute which are believed to total at least $157,000.

The unauthorized use of the Red Hawk golf course by friends and family of Harvey Whittemore.

The payment of "rent" by Wingfield for a house owned by Harvey Whittemore in the amount of $154,000 as well as $58,666.64 in redecorating costs and payment of a personal assistant to take care of the property.

Unauthorized payments to sub-consultants in the amount of $572,693.60.

Having Wingfield pick up the cost of the Whittemores yearly tax preparation from 2004 to 2009, an amount estimated to be $140,000.

The writing off of an investment by Harvey Whittemore in 2006 for his interest in Argus Media in the amount of $207,000. The current value of this interest is supposedly $2,280,000. It is believed Harvey Whittemore "incorrectly wrote off the investment amount when it had asserted substantial value or retained the investment amount for himself."

The failure to disclose consulting or kickback fees in relation to the acquistion of a property known as Geyser Ranch. These fees included approximately $300,000 in consulting charges which should have gone to the real estate agent and which were never disclosed to the Seenos.

The unauthorized distribution of elk hunting tags to family and friends, which are valued at $15,000 a tag.

Donations to charitable organizations tied to companies for which Whittemore acted as a lobbyist and received substantial lobbying fees. The full amount of these donations is currently under investigation.

Substanial loans of hundreds of thousands of dollars to personal friends and business contacts of the Whittemores and subsequent write-offs of the amounts. One loan made in 2004 was in the amount of $250,000.

The unauthorized loan by Wingfield at Harvey Whittemore's direction of $358,895 to an entity known as Uniforms Express.

The use of Wingfield services in funding the construction of his home. These amounts were not reimbursed.

The sponsorship by Harvey Whittemore of the pro golfer Rich Barcelo in an amount totaling several hundreds of thousands of dollars. The complaint states, "At Whittemore's direction, approximately $58,000 of Barcelo's sponsorship costs were charged to one of Wingfield's affiliated entities." The Seenos believe the Whittemores are continuing to sponsor Barcelo while in massive debt to the Seenos.

The payment by Wingfield for the construction of the personal residence of Harvey and Annette Whittemore in Reno, Nevada at the cost of approximately $3,000,000.

Questions remain about a 2004 transaction with the St. Thomas Trust in which Harvey Whittemore was listed as a "minority profits owner" which were purchased by various Wingfield entities for the amount of $13,500,000.

The unauthorized use of Wingfield funds to pay for the purchase and leasing of automobiles and golf carts. This includes an amount for Annette Whittemore's Land Rover totaling approximately $61,709.53 and investigation is continuing on the improper use of Wingfield funds for the leasing of golf carts for use at the Whittemore residence in Lake Tahoe, California.

The Seenos assert that Harvey Whittemore's brother, David Whittemore had lost or surrendered his law license and yet that between November 2005 and July 2006, David charged Wingfield $121,093.75 in legal and consulting fees despite not having an active, valid law license.

Annette Whittemore was the president of a Wingfield affiliated entities, Wild West Sound Company, Inc. and had the company move to a building and pay rent to the Whittemores. The Seenos were not advised that the Whittemores were owners of the building. Annette also attempted to sell the business for $50,000 to an employee, which would have caused loss to the Seenos in excess of $350,000.

In 2009 the Whittemores failed to disclose their interest in the sale of Wingfield's interest in an entity called King 888, the manufacturer of an energy drink product.

The Whittemores used Wingfield's affiliate, Wild West Sound Company to install $186,000 worth of stereo equipment in their home and allowed the Wild West mamager to run up a personal debt for company inventory in the amount of $58,000.

The Whittemores repeatedly took advantage of financial strength and business reputation of Wingfield and the Seenos in their personal financial dealings with banks and lending institutions. This resulted in Whittemore obtaining a loan for $44,000,000 (forty-four million dollars). Whittemore allegedly stated in his confession of September 16, 2010 that he used these bank loan proceeds for lifestyle choices rather than putting them back into Wingfield.

In September of 2008 Harvey Whittemore advised the Seenos that he "was broke" and that the Seenos would have to make his capital contribution to Wingfield. In September of 2008 Harvey Whittemore led the Seenos to believe he had spent the entirety of the $44,000,000 (44 million dollars). However, the Seenos allege that in 2008 Whittemore acquired nine homes in the names of his children and an employee. The last of these homes was purchased two months before Whittemore declared to the Seenos that he "was broke."

In 2009 and 2010 Thomas Seeno loaned approximately $1,454,939 to Whittemore, personally, to maintain his lifestyle.

Harvey Whittemore failed to make good on a debt of $2,777,000 owed to Wingfield for debts incurred by ownership in several outdoor electronic billboard signs.

Whittemore received $660,000 from Wingfield's development partner, Pardee Homes for lobbying activities on January 4, 2008 as well as an additional $660,000 on May 5, 2008. This relationship was not disclosed to Seeno in a timely manner and represented a clear conflict of interest.

Harvey Whittemore solicited and received a $100,000 grant from Nevada Energy for the benefit of the Whittemore Peterson Institute. Nevada Energy was a critically important partner in Wingfield's 43,000 acre Coyote Springs Development and thus this information should have been disclosed to the Seenos.

Whittemore also failed to report to the Seenos that he had solicited and received contributions from Pardee Homes, engaged the services of the lobbying and public relations firm with whom Wingfield was doing business, as well as engaging law firms to act as registered lobbyists for the Whittemore-Peterson Institute.

The Reno Gazette Journal article on this case quotes Kent Robinson, one of the Wingfield attorneys as reporting in an e-mail that "the allegations have been reported to the Reno Police Department." Also quoted in the article is Sgt. Dave Macauly of the Reno Police Department Financial Crimes Unit who stated he had received a copy of the lawsuit and that his office would review the allegations to determine whether a criminal investigation is necessary.

The Whittemores will no doubt contest these charges and until the charges are proven in a court of law or otherwise acknowledged it's important for the public and the members of the neuro-immune disease communities to keep an open mind. Perhaps there are innocent explanations. We will wait to see how all of this unfolds. (Update - The Reno Gazette Journalis now reporting that the Whittemores have filed a 180 million dollar counter-suit against the Seenos, claiming they are the victims of racketeering, extortion, and fraud, and that death threats were made against them by the Seenos. The attorney representing the Seenos, Kent Robison calls the suit "Retaliatory" and went on to say about the claim "We've looked at it. It's garbage. It's a desperate act by a desperate man. But most important, game on. We have three or four witnesses to his confession (of misappropriating funds)."

However, if these charges are proven it will perhaps give greater clarity into what has until now been a mysterious pattern of disputes with members of the medical and scientific communities, starting with Dr. Daniel Peterson, Dr. Connie Knox, Dr. Jamie Deckoff-Jones, the alienation of Dr. Ian Lipkin of Columbia University, and the legal actions against Dr. Judy Mikovits, including the curious judicial manuevering which led to her being incarcerated for five days.

The true tragedy of these events, though, is the impact on the neuro-immune disease community, particularly those with ME/CFS (myalgic encephelomyelitis/chronic fatigue syndrome). When the Whittemore-Peterson Institute along with others reported the possibility of a retroviral cause for the disorder it was an amazing ray of hope. Based upon what I understand of the science it is still a strong possibility.

The troubles of the Whittemores have significantly complicated those efforts. As for the autism community, I have spoken with scientists close to the research, and the possibility remains that the retrovirus which might affect the ME/CFS community could also be causing many of the problems in autism. These theories remain tantalizing, but unproven. I have known enough mothers of children with autism who display at least sub-clinical signs of chronic fatigue syndrome to know that this possibility must be fully investigated.

Despite the problems of the Whittemores, it appears the research to determine whether a retrovirus is a potential causative agent in ME/CFS is going forward at Columbia University under the able guidance of Dr. Frank Ruscetti of the National Cancer Institute, Dr. Mikovits, and Dr. Jose Montoya of Stanford University, as well as many others. I understand we should have the results of this study sometime well before the start of summer, although everything seems to take longer when it comes to this issue.

For the benefit of all those who suffer from neuro-immune disorders we should pray that other issues do not derail this vitally important scientific research.

Kent Heckenlively is a Contributing Editor to Age of Autism


The above, with comments, originally appeared here.



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