Blue Shield, Ex-Tech Exec Swap Suits over “Whistleblowing,” Credit Cards and Bowling with Tara Reid

Tuesday, April 28, 2015
Tara Reid (photo: Instagram)

Probably no top executive of a multi-billion-dollar enterprise wants to see a change in their employment status brought to the public’s attention in a headline like this: “Tara Reid's Lover FIRED from Insurance Firm.”

Former Blue Shield of California chief technology officer Aaron Kaufman and his ex-employer have exchanged nasty accusations of late about who did what to whom during his two-year tenure. They include raunchy pictures of his “Sharknado” actress girlfriend, thousands of dollars in personal expenses charged to company credit cards, sweetheart deals with vendors and an abrogated bonus agreement. 

Kaufman was fired last month after two years on the job. He sued (pdf), alleging that Blue Shield Senior Vice President and Chief Information Officer Michael Mathias had him canned when he “blew the whistle” on alleged financial irregularities that “bilked” the company out of $3 million. Kaufman claimed that Mathias chose a vendor for its Veritas Data Project that charged significantly more than one he had suggested.  

His termination allegedly came one day before the company would have been obligated to pay him a $450,000 bonus. Kaufman, who is now executive vice president and chief product officer at SocialWellth in Las Vegas, managed 30 employees at Blue Shield and managed a budget of $25-million.

Kaufman claimed the choice of vendor looked suspicious. “This was especially true since Mathias could not explain why he was beholden to this single, overpriced ABC Corp vendor, why he would want to contract with a vendor with no fixed cost that exposed Blue Shield to an unlimited flow of revenue into ABC Corp's bank account, a vendor agreement not in the best interests of Blue Shield.”

Mathias is not named as a defendant in the suit, but he is not spared in the text:

“Mathias retaliated against Kaufman because he refused to go along with and participate in his unlawful conduct and financial improprieties. In fact, if anyone should have been fired it should have been Mathias, not Kaufman, that it was Mathias who got caught bilking $3 million from California consumers and 3.4 million Blue Shield members.”

In his complaint, Kaufman made a passing reference to the absurdity of an unsupported allegation made by Blue Shield that he “caused some undefined and unquantifiable ‘reputational damage’ to one of California’s largest insurers who had 3.4 million members, 65,000 physicians, 5,000 employees and turned a profit of $13.6 billion, year after year.”

Kaufman, who is reportedly going through a divorce, was opaquely referring to his girlfriend, Reid.

Blue Shield fleshed out the details a bit when it countersued last week. In detailing Kaufman’s alleged abuse of company credit cards, it noted $879.84 charged for a bowling party, which would probably have flown under the radar if Reid, who was in attendance, hadn’t overdone a good time.

“At some point during the evening, Mr. Kaufman's girlfriend acted inappropriately, taking inappropriate photographs of herself and sharing them,” the company said in court documents seen by the Los Angeles Times. “Word of the behavior at the bowling alley event spread quickly at Blue Shield and caused a great disturbance within the company. Employees were embarrassed.”

Blue Shield said that 75% of Kaufman’s company charges were illegitimate, including $17,491 spent on a Florida vacation with Reid in attendance.

–Ken Broder


To Learn More:

In Suit, Blue Shield Cites Extravagant Spending by Fired Executive (by Chad Terhune, Los Angeles Times)

Blue Shield Exec Fired for Trying to Save Money (by Maria Dinzeo, Courthouse News Service)

Tara Reid's Lover FIRED from Insurance Firm After “He Blew $100,000 of Company Money on Vacations” and “Embarrassed” Bosses with Her Raunchy Bowling Alley Pictures (by Kieran Corcoran, London Daily Mail)

Aaron Kaufman v. California Physicians’ Service (Los Angeles County Superior Court) (pdf)

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