On July 23, 2002, Jones learned that a check for $2,000 had recently been deposited into an unnamed bank account used by Steven J. Fiorello, the state’s chief pharmacist. Hardly a remarkable sum, yet Jones’s instincts, honed by years of investigating multimillion-dollar fraud schemes, were aroused. Fiorello and his superiors had failed to register the account’s existence with the state comptroller, which was a felony offense in Pennsylvania. Worse, the check was from Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson. Since Fiorello’s job was to choose which drugs were available for purchase by state hospitals, foster homes, prisons and elder care facilities throughout Pennsylvania, this money looked suspiciously like a bribe.

“It was the first of a series of ‘Oh my God!’ moments I had over the next months and years,” Jones remembers. “That check was like a loose pebble that started an avalanche.”

Today Jones is a slope-shouldered, rough-handed man of sixty who resembles a heavyset Chuck Norris. His close-cropped, grizzled beard is stained with nicotine around his mouth, and his face is reddened by weather. Beneath gray bangs and seams of concern across his forehead, his clear green eyes seem wary, though as he gets to know you they occasionally glint with humor. Jones likes to build things in wood and stone—houses, barns, drywall terracing—and spends much of his time alone in the forested foothills of the Appalachian region of central Pennsylvania, where he grew up. This is Pennsylvania Dutch country, where the Amish drive horse-drawn buggies with two gas lanterns for headlights, and the barns and clapboard houses stand square across the roof beam but often need a coat of paint. Jones grew up working with the Amish, and has some of their calm reserve. He chooses his words judiciously, like a good mason laying bricks, like a man accustomed to living at hazard before the law. He even swears judiciously: “The only way to accurately describe my state of mind at that moment,” he says of his realization that his own office was covering up massive pharmaceutical fraud, “was ‘fucking devastated.’ ” Jones has many friends who drop by his cabin at odd hours, to drink a beer and swap deer-hunting stories, but occasionally he’ll leave their company, walk out on his back porch and look over the frozen pond into the bare woods beyond, drawing hard on a cigarette.

Jones continued exploring Fiorello’s finances and found more checks written by Janssen, as well as by two other pharmaceutical companies, Pfizer and Novartis. “As an investigator I was taught to look for the big picture,” Jones says. “Not just what happened, but why it happened. So I started looking into what these drug companies were doing in Pennsylvania in the first place.” The funds were being used to support and expand the Pennsylvania Medication Algorithm Project (Penn-MAP), a protocol to diagnose and treat bipolar disorder, schizophrenia, ADHD and major depression. This protocol required doctors in all state facilities to treat these conditions with a new generation of drugs, called atypical antipsychotics, in preference to older, generic antipsychotic medications that had previously been prescribed. Jones discovered that the protocol was a carbon copy of one being used in Texas, TMAP, which Johnson & Johnson and other pharmaceutical companies had launched in the late 1990s, with generous funding to mental health officials, who in return had often helped market the drugs. Jones also found evidence that Johnson & Johnson, together with acquiescent state officials, was rolling out similar programs in at least ten other states.

The more Jones learned about these protocols, the more disturbing they seemed. They made Risperdal and other atypical antipsychotics the treatment of choice for a wide range of mental disorders. Since atypicals were far more expensive than first-generation antipsychotics—Risperdal cost about 45 times more than previous medications—Texas Medicaid payments for atypicals had skyrocketed from $28 million in 1997 to $177 million in 2004. The same was happening in Pennsylvania: between 2000 and 2003 alone, Medicaid spending for atypical antipsychotics rose by 55 percent.

Yet despite their cost, Jones discovered that much of the supposedly impartial medical research used by pharmaceutical marketers to convince state officials that Risperdal and other atypicals worked better than older medications had been ghostwritten by the pharmaceutical companies. Unbiased clinical trials not only suggested no increase in effectiveness but revealed serious side effects caused by atypicals, which the pharma-sponsored studies had downplayed. Risperdal could cause muscle spasms, medically serious weight gain, and an increased risk of diabetes, stroke, pituitary tumors and death. Patients on Risperdal might develop disfiguring and irreversible twitching of the face, torso and limbs. Some male patients grew lactating breasts, and required mastectomies. Though Johnson & Johnson apparently concealed major research from the Food and Drug Administration (FDA), the FDA knew enough about Risperdal to forbid the company from claiming that the drug was superior to earlier antipsychotics; to require warnings of the neurological side effects, weight gain and diabetes it could cause; and to impose, in one demographic, the agency’s strongest, or “black box,” warning, reserved for drugs with life-threatening side effects. The FDA approved extensive use of the drug only for adult schizophrenics. Johnson & Johnson, Jones found, had ignored many of these prohibitions, and downplayed or denied them in its marketing campaigns; in Texas, the company had aggressively marketed Risperdal for children, adolescents and elders, to treat anxiety, insomnia, mood disorders, agitation and mild emotional discomfort. In fact, the Texas protocol mandated Risperdal for these conditions in state prisons, hospitals, reform schools and nursing homes, whose captive patient populations had little or no say in their medical care. Now the company and Pennsylvania officials were starting to impose the same regime in Jones’s home state.

Thinking he might be misunderstanding the evidence, Jones traveled to Janssen headquarters in New Brunswick, New Jersey, to question marketing executives and company lawyers. Apparently dismissing him as a harmless paper-shuffler, they blandly confirmed his worst suspicions. “I’d never seen anything so blatant,” he remembers. “They had co-opted state healthcare, and were using it to sell billions of dollars of dangerous drugs in illegal ways.” Among the documents that Jones reviewed was a “drug usage evaluation” that Steven Fiorello, at the request of Janssen Pharmaceuticals, had performed on 756 diagnosed schizophrenics in eight Pennsylvania mental hospitals, who were given Risperdal or one of four other atypicals. Janssen then paid for Fiorello to fly to New Orleans and present this research to pharmacists from across the country. Behind the chill, clinical language, Jones saw evidence of terrible suffering. One patient on Risperdal had lost 59 pounds during the study, while another had gained 85 pounds. A patient on Zyprexa, an atypical produced by Eli Lilly, had gained 240 pounds. “Someone in a white coat sat by and watched those poor people, and jotted everything down,” Jones says. Certain patients exhibited extreme swings in serum glucose and cholesterol levels, putting them at high risk of diabetes, heart disease and other conditions. Stefan Kruszewski, a psychiatrist working as a reviewer at one of the hospitals, told Jones that he believed the deaths of several children in mental health facilities had been linked to the use of atypical antipsychotics.

Healthcare fraud, like other thefts of taxpayer dollars, creates countless victims, yet few of us see them. They are hidden behind a scrim of marketing and earnings reports and objective-looking research, presented by executives and researchers in suits and white lab coats who are clever and ambitious, perhaps a bit like us. This is the subtle treachery of corporate crime.

Jones knew firsthand what it meant to be invisible, powerless. He’d grown up at the end of a mile-long dirt road, in a solitary house in the middle of an apple orchard, with an outdoor privy and no hot water. When Jones was three, his father was hit by a car while helping another motorist; he was an invalid, in and out of hospital, for several years, and was left with permanent damage to his left arm and leg. His mother worked in a shoe factory and a chicken processing plant, and the rest of the time cared for his father. They ate souse, scrapple, occasionally chops or ham, and game shot by Jones and his relatives. His paternal grandmother, a stout, hard, profane woman straight out of Faulkner, stole the family Christmas tree from a tree farm one foggy December morning, and made squirrel stews that sometimes had fur and claws lurking at the bottom of the pot.

A hard life took its toll on Jones’s parents, and on their relationship with him. He was drawn to work with addicts and the mentally ill, he says, to “prevent others from living through the kind of things I had.” Once, after staying with a neighboring family of farmers for a couple of nights to help with chores, he called his mother to ask if he could stay a night or two longer. She brought a box of his clothes and told him, “Stay as long as you want.” Jones explains: “I learned to distance myself from them. I cared for them, but spent very little time with them.”

Instead, Jones worked. He tanned deer hides for five dollars a skin, planted and tended half-mile rows of tomatoes, and was a chaser at a local chicken ranch. In ultraviolet light the birds are blind to, he’d herd them to one end of a long barn and snatch them up, scratching and pecking, by a leg. “It was like a vision from hell,” he remembers. Later he began building houses up from the bare studs, and renovating dilapidated buildings with minimal cash down and lots of sweat equity. He’d built a house of his own by the time he was twenty-five.

Perhaps because of his solitary childhood, Jones sought out tight-knit communities. He often worked as a hired hand with local Amish farmers, and was the only “Englishman,” or non–Pennsylvania Dutch speaker, invited to several barn raisings. He was also drawn to outsiders and underdogs. The 1972 massacre of Israeli athletes at the Munich Olympics stunned and horrified him, and awakened an affinity for Israel. He moved to a military base in the central Galilee, and served two tours of duty as a civilian volunteer in the Israel Defense Forces, helping soldiers with nonmilitary jobs like painting and building repair. Although he was an atheist, he spent Shabbat weekends with Israeli families on nearby moshavim, and accompanied them to services.

Early in his stay, Chaim, the patriarch of his host family, pointed inland to the horizon. “See that line? That’s the Mediterranean.” He turned 180 degrees. “And that line? That’s the West Bank. This is the narrow waist of Israel. The people in those hills want to put us in that sea.” At the top of the hill on which the settlement was built stood a playground, a concrete defense tower at its center. At first, Jones wondered how Israel had survived, even prospered, in such adverse conditions. Gradually, he says, he understood. People lived with an intensity he’d never before experienced: “You have good food, you eat it,” an old Israeli man told him. “Cigarettes? You smoke them. Today, you live!” His host family led a communal existence utterly unlike his own solitary upbringing. “When they broke the bread together, I saw all the love and respect they showed to each other, and to Chaim. All the men at the table were soldiers; all the women were, too. And I said to myself, ‘Okay, so this is how Israel has survived.’ ”

Back in the States, Jones continued to be drawn to underdogs. After a few years at the newly founded Pennsylvania Office of the Inspector General (OIG), he took a job as a state probation and parole officer, where he specialized in working with addicts, foster children and the mentally ill. To this day, when he visits poor inner cities, he often buys two fast-food dinners and offers one to a homeless person, then coaxes out his new acquaintance’s story as they eat together. “I try to give them the respect and attention they deserve. I take them seriously. I guess I’ve always tried to stand up for the little guy, the person with no voice,” he says. “These are my people.”

Now, on his second tour of duty at the OIG, Jones knew that Pennsylvania, following Texas’s lead, had begun to medicate countless voiceless wards of the state with strong, unproven and potentially harmful chemicals, at huge cost to taxpayers and enormous profit to the pharma companies. He also knew this was the kind of wrongdoing the OIG had been created to fight.

Soon after his trip to New Jersey, the atmosphere at his office changed. His superiors instructed him to treat the case strictly as a personnel matter concerning Fiorello, and to stop investigating the pharmaceutical companies that were paying him. When Jones objected, his boss, Dan Sattele, told him, “Morally and ethically, you’re right, but politically this is dead.” Sattele suggested that the drug firms had purchased impunity by contributing money to state politicians in both parties. “These companies are very aggressive marketers. They write checks to both sides of the aisle.”

Nevertheless, Jones continued to gather evidence about the pharma protocol in Pennsylvania and Texas. He requested clearance to conduct interviews with officials in Corrections, the Department of Public Welfare, and other state agencies that also appeared to be receiving pharma money and taking part in the Pennsylvania protocol. Sattele refused. “These are not the good old days,” he told Jones. Then, visibly dejected, he added: “If you want to find waste, fraud and abuse, you don’t have to look outside the OIG. It’s all here.” (Sattele, in a later deposition, remembered their conversation differently, saying that Jones expressed frustrations—many of which Sattele shared—about changes that had occurred in the OIG since his first stint there. “Allen, accept the team concept,” Sattele says he told Jones. “Accept the attorneys are here to stay.”) Soon an order came down from the office of Tom Ridge, the Republican governor of Pennsylvania, to close the investigation and to shred Allen Jones’s fat dossier of corruption.

When Jones persisted in his pharma investigation, Henry Hart, the deputy inspector general, stopped at his cubicle and announced in a voice audible throughout the office that they needed to talk. He led Jones past the desks of the other investigators to the law library, where they sat in full view of the office. There he announced a “problem”: the office receptionist had accused Jones of sexual harassment, for which he could be disciplined or fired. Jones concluded that the charge had been fabricated as a way of shutting down his probe.

Later that day, in what Jones calls “a classic good cop–bad cop routine,” Dan Sattele took Jones aside in the lunchroom and asked him what had happened. Jones repeated what Hart had said, and told Sattele he was worried he would be fired. “Am I a marked man? Is there a conspiracy against me? What do I have to do?”

Sattele said there was no conspiracy against him among front-line investigators, though his eye contact and body language told Jones there was probably one higher up. “Quit being a salmon,” Sattele told him. “Quit swimming against the current with the pharmaceutical case. Go with the flow.”

It had taken Allen Jones nearly six months of “Oh my God” moments to reach this point. Now he made a rapid mental inventory. He had settled his parents in a comfortable home that he had built. His daughters had finished college and were financially independent. If he lost this job, he could still work construction for a living. He was free to act.

“But the odd thing was, even while I was running through these facts, I never actually felt there was a choice,” Jones remembers. “I’d just been ordered to go against the principle and mandate of my office, and to participate in the cover-up of corruption. I felt like a soldier who has received illegal orders. At the same time, I now knew that defenseless, mentally ill people were suffering and dying, and taxpayers were being ripped off by the pharma companies. Once I knew all this, I couldn’t let it go, or I’d have become complicit, and part of the moral responsibility for these crimes would have been mine. I realized I’d become a whistleblower.”

Jones pretended to submit to his superiors, while continuing his investigations of the drug companies as an undercover operative in his own office. “I was thinking, ‘You’re the enemy,’ ” he recalls. “ ‘And I’m going to prove what you’re doing, when you’re doing it, and why it’s wrong.’ ” Jones surreptitiously gathered more evidence about the protocols in Texas and Pennsylvania, and traced their deep political root structure. He sent letters detailing the fraud to the Department of Justice and the Department of Health and Human Services (HHS) in Washington, DC, as well as to the attorneys general of Texas, Arkansas, Louisiana, Virginia, South Carolina and other states where Johnson & Johnson and its competitors were operating some version of the scheme. The DOJ and HHS took no action. Some states declined to investigate the case. Most simply did not answer.

Eventually, his bosses at the OIG discovered that Jones hadn’t stopped digging, and they relieved him of...