Three senior executives who ran the management company operating the only hospital in the city of Tulare have been charged with 40 felony counts resulting from longstanding allegations of mismanagement.

The long list of charges – which includes six more misdemeanors – follows an intensive three-year investigation of the hospital’s former operators.

They include embezzlement of public funds, conflicts of interest, money laundering, embezzlement, theft and non-disclosure of funds intended to influence a political campaign.

The mismanagement of the hospital and its finances ultimately forced its governing body – the local health district of Tulare – to file for Chapter 9 bankruptcy.

The three men charged: Dr Benny Benzeevi, longtime CEO of Healthcare Conglomerate Associates; Alan Germany, chief financial officer of the company; and Bruce Greene, chief counsel of the firm.

Blurring of borders – geographically and financially

At the heart of many of the charges against Benzeevi and his associates are the blurred lines between the healthcare conglomerate’s relationship with the Tulare healthcare district and another local public hospital it managed – the hospital. Southern Inyo in Lone Pine.

Benzeevi has been charged with a conflict of interest for hiring Dr Parmod Kumar, Tulare Hospital District Administrator and Gastroenterologist, as Medical Director of Southern Inyo.

The three men were charged with criminal conflict of interest and Benzeevi and Germany were separately charged with a county with the felony of embezzlement and falsification of records for a $ 500,000 line of credit issued to the district of South Inyo Health District by Tulare Health District without the Tulare Board of Directors. ‘ awareness.

A confidential witness also told Tulare County DA investigators that Healthcare Conglomerate Associates sent equipment belonging to the Tulare Hospital District to Southern Inyo Hospital.

Benzeevi and Germany also faced three counts of embezzlement resulting from the failure of the Tulare health district to pay $ 4 million in interest on Build America bonds spanning July 2015 to July 2016.

The Doctor, the Country and the Mossad

Benzeevi and his company have enjoyed a strong relationship managing the Tulare Public Hospital for much of his tenure. That was until he collided with a looming problem for a decade.

The Tulare Hospital District had long sought to expand to cope with population growth and increased health care needs. In 2005, voters approved $ 85 million in bond debt to build a new tower at the Tulare Regional Medical Center.

In 2016 – eleven years after receiving voter approval – the first phase of construction of the tower was not completed. The Tulare County grand jury has begun to investigate.

Dubbing the project the “Tower of Shame,” the Grand Jury pointed to poor construction management and countless change orders, pointing the blame on the district and its leadership – Healthcare Conglomerate Associates.

A citizens’ group – Citizens for Hospital Accountability – has emerged to reorient the board of directors of the local health district of Tulare.

The group’s first target? Parmod Kumar, the gastroenterologist at the center of a criminal conflict of interest charge filed against leaders of the health conglomerate.

The recall campaign to oust Kumar had a bizarre wrinkle: the outside influence of so called “Private Mossad for Rent”.

A New Yorker article by Adam Entous and Ronan Farrow explains how Benzeevi hired Psy-Group, a Tel Aviv-based private intelligence contractor, to lead a smear campaign against top candidates seeking to oust Kumar, including his eventual successor – Senovia Gutierrez.

The Israeli intelligence firm set up astroturf news sites that disseminated opposition research from vague sources on Gutierrez and ditched campaign literature at the gates of Tulare with similar anti-Gutierrez messages.

The shadow operation backfired on Benzeevi – whose company also contributed $ 10,000 to Kumar’s campaign to retain the seat – as Kumar was successfully recalled.

Gutierrez voted to oust Benzeevi and Healthcare Conglomerate Associates, but not before a final dose of controversy.

One last payment

A major element of the accusations has been pressure from Benzeevi and Healthcare Conglomerate Associates to have the Tulare Hospital District take out up to $ 22 million in loans in 2017.

The resolution authorizing the loan limit stated that the purpose of the debt was to pay the running costs of the current hospital, the construction costs of the ill-fated “Tower of Shame” hospital project and the repayment of the debt.

The end result of the loan authorization was two money transfers. On September 11, 2017, $ 499,727.93 of the loan proceeds was sent to Greene’s law firm, BakerHostetler.

On September 13, 2017, $ 2.4 million was deposited into Benzeevi’s personal bank account.

In Tuesday’s criminal complaint, the Tulare County district attorney outlines the 14 steps he took to convert a proposed loan into a slew of felony charges for former hospital directors.

Among them: Benzeevi did not indicate that the proceeds of the loan would be used to repay the debts he claimed against the hospital district; Benzeevi and Greene failed to recognize a newly elected hospital board member – Senovia Gutierrez – as an official board member and did not count her vote to cancel the loan deal and terminate the district’s relationship with BakerHostetler; and a written legal opinion prepared by Greene clarifying that the loan transaction was legal under California law.

The end result: Benzeevi and Greene were charged with criminal conspiracy to defraud other property, grand theft through embezzlement of public funds and charges of money laundering for the transfer of funds to BakerHostetler.

Benzeevi was charged separately with an additional charge of money laundering for the transfer of funds of $ 2.4 million from the loan authorization – and presented an improved sentence for money laundering. money over $ 2.5 million.

Loaded but absent

Although the subjects of Tulare County’s largest – and costliest – criminal investigation, accounting for $ 1.5 million in personnel costs and travel across five states representing 13,500 man-hours, they are not not currently in custody.

Benzeevi left the United States on March 1, 2019. It is assumed that he left the country for Israel, his place of birth. If found guilty on all counts, he faces a prison term ranging from 13 to 40 years.

Germany moved to Arizona after being made redundant in March 2017. He has held other positions, out of state, for companies in the healthcare industry.

Greene remains with BakerHostetler as an attorney. The company severed ties with healthcare conglomerates in 2017.

Germany and Greene face a 10-year prison sentence if convicted.

Representatives for Benzeevi and BakerHostetler did not respond until the publication.

Officials from the Tulare Hospital District, which has since handed over the management of its hospital to Adventist Health after the bankruptcy, were delighted with the long-awaited criminal case.

“We are pleased that the investigation has resulted in charges against HCCA and Bruce Greene. We know that justice will be served to the residents of the district and have every confidence in the district attorney, ”said Kevin Northcraft, chairman of the district administration board.

“For as much damage as this has been done to the community, it is important that this case has its day in court.”

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