SUCCESSFUL SOCIOPATHY IN CANADA
Ron Koval and King's Medical Centre.
I have written about the disturbing characters who see opportunities for gaining social status, crerating empires, and making their fortunes in health care. Their characters make them very successful, at least for long enough to cause a great deal of suffering. I have called them successful sociopaths. The best examples have until now come from the USA. The latest VERY embarrassing example comes from Canada.
The downsizing of the Canadian public medicare system over the last 5-10 years creates opportunities for the greedy and unscrupulous to make themselves rich. The most unsuitable people are attracted and the business and political elite welcome them. They are opposed only by the commitment of the people to medicare.
King's Medical Centre in Toronto, founded in 1993 was the brainchild of Ron Koval. It rapidly became the largest and most opulent private facility in the country catering to the "demands" of wealthy Canadian's and Americans. Through Koval's eyes the opportunities for profit seemed limitless and perfectly legitimate. It was hailed as the future of Canadian medicine by the business community. It was used as a model by politicians.
Koval, a financier was outgoing, friendly, apparently credible, persuasive, and well trusted. He lived lavishly and spent freely, entertaining staff. He was generous to the doctors promising large rewards and helping them to make money.
In October Koval and his wife disappeared and Kings Medical Centre collapsed. It was unable to pay its staff. When the books were examined Kings had never made any profit, not even enough to support Koval's life style. A US $10 million fraud was immediately apparent. As the books were explored this has grown to more than $100 million. In addition it seems that the Centre and the doctors who had been caught up in Koval's enthusiasm may also have been defrauding medicare, although there is as yet no evidence.
Interpol and Scotland Yard were called in and there was a world wide search for the Kovals. It was thought that they were hiding up in a country that did not have extradition treaties - possibly Panama. All this was decidedly embarrassing for the Canadian politicians who are dismantling medicare and replacing it with facilities built by entrepreneurs like Koval!
The Canadian police threatened to arrest the Kovals daughter and charge her. This brought the Kovals out of hiding in an obscure Myrtle Beach, South Carolina motel. They gave themselves up and pleaded guilty. They were sentenced to 7 years but will get parole in 14 months.
The final press reports are remarkably revealing. The Kovals almost emerge as unfortunate heroes. The judge praises them. I have included large sections of the press reports. It seems that the Kovals had a dream of themselves and the sort of health care empire which would realise this. They simply set out and lived that dream doing whatever was necessary to maintain it. They systematically defrauded a series of large financiers in order to maintain their health clinic, support their doctors and maintain their flamboyant life style. The criminality of their actions and the fact that the clinic was not making money does not seem to have gone past the eyebrows.
They were clearly charismatic in an odd way and very persuasive. They created their own world and no one doubted it. The lived illusionary roles which others found credible. Corporations and doctors never questioned their conduct.
Their odd charisma is revealed in the court action. They present themselves as an endearing and loving couple who were school sweethearts.
"We've let them down and I know many of them are struggling now to get new jobs," Loren Koval said, reading from handwritten notes. Then turning to her family she became tearful and said, "to my family and my beautiful daughter Amy I am particularly sorry. They have forgiven me and now I need to be sentenced and start forgiving myself."
Ron Koval's voice trembled as he lamented the demise of the King's Health Centre.
"We had a dream to become the standard for private health care providers in this province and our dream was threatened," he said of the clinic, which was touted to be the Canada's version of the renowned Mayo Clinic in Rochester, Minn., when it opened in 1996, but instead lost about $25-million a year until it shut.
The judge is so persuaded that he pays tribute to their loving relationship. I quote the truly remarkable comments
Ontario Superior Court Justice David Watt, in a sometimes lyrical speech that lauded the couple's tight-knit family and former sterling reputation, said the Kovals have been "equal partners in life and equal partners in this scheme."
Although they were dishonest in their dealings with lenders, they committed no breach of trust, he said. Nor did they place the lives or health of any patients at the health centre in jeopardy.
"The victims [chiefly the Royal Bank of Canada and Société-Générale (Canada)] were not without resources to protect themselves from this fraud," the judge said.
It was remarkable that these apparently sophisticated lenders could be ``duped repeatedly,'' Watt said.
This was a couple which had systematically carried out a $95 million fraud, yet had "committed no breech of trust". The judge did not consider that his statement was contradictory and that he was also being duped.
Everyone was duped. They were variously described.
Ron Koval, a college dropout and self-made equipment leasing financier, was hailed as a visionary, along with Loren, his high school sweetheart.
Loren was a warm and well-liked former psychiatric nurse. Only Ron knew she alone was keeping track, in her head, of all the fraudulent leases, which were being repaid on schedule to keep up appearances.
Meanwhile, Ron wanted nothing but the best. ``He had carpeting at King's that was specially manufactured to have the King's (crown) logo in it,'' Bronfman said.
"And (there were) other furnishings and statues and artwork and large computer installations.''
``He was a bit of a buffoon,'' Bronfman recalls, a man who substituted image for knowledge. --- Ron Koval managed to fool some pretty high-powered doctors, however.
But Ron Koval had charm. "I always found him very pleasant, personable,'' Walker recalled. "He was a rough diamond.''
Toronto Police Detective Steve Burnham has a different view. "Those Kovals thought they were kings," he told reporters. "They boasted to people that they were not millionaires but billionaires."
I am not criticising the judge, the insurance company or the Kovals but drawing attention to the psychological and sociological dynamics of the situation - the sort of people that the Kovals are and the way in which the community, doctors, large institutions and even the judge respond to them. This is a reflection of sometimes less obvious patterns of behaviour in the conduct of most of the big health and aged care corporations and their directors. US regulators and even Australia's Dr. Woooldridge has responded similarly when dealing with motivated corporate criminals.
A final quote
The maximum sentence is 10 years, but the judge took into account their guilty plea, clean records, co-operation with authorities and the likelihood they won't reoffend.
If my analysis is correct then it is very likely that given a similar situation the Kovals will offend again. We need only think of the two very charismatic Canadian ladies who were in trouble over nursing home care in Canada some years ago. They moved on to Florida and promptly duped everyone there as well.
The newspapers tell the full story far better than I can. I have made extracts from press clippings and placed them in a www page. They go back to 1995 and tell the story. The last few are most revealing.
CLICK HERE -- to read extracts from the reference material