May 2018 file photo of Tulare Regional Medical Center
The former CEO for Tulare Regional Medical Center (TRMC) is criminally liable for stealing funds and other charges, according to a report released by Tulare County District Attorney Tim Ward.
In a court document from Oct 5 prepared by Ward and his deputy, Trevor Holly, allegations were made against Health Conglomerate Associates (HCCA) and its CEO, Dr. Yorai “Benny” Benzeevi that include — but are not limited to — violation of conflict of interest, misappropriation of funds, unlawful sales of public property and the flow of stolen money into his personal account. This document is in response to Dr. Benzeevi’s previous requests for the return of seized property.
“I think it substantiates and documents what many of us have long felt,” said Kevin Northcraft, president of the district’s current board of directors. “That illegal activity occurred in the management
HCCA ran the Tulare hospital from December 2013 until October 2017, with the hospital filing for bankruptcy that September. According to the office of California State Auditor Elaine Howle, the closure of the hospital can be attributed to mismanagement on the part of Dr. Benzeevi’s company and the previous board of directors.
Since last year, Dr. Benzeevi and HCCA have been under investigation by Ward’s office, and in his latest filing, he pointed to missing and misappropriated funds, including those from the Build America Bonds program. Under this program, the Tulare Local Healthcare District received biannual payments of approximately $800,000, which would flow through the district to the tax collector’s office. However, from February 2015 to August 2017, more than $3.8 million failed to reach the appropriate recipients.
Ward revealed this information to the public in May.
“County officials made the required payments,” Ward’s statement said, “but this required that tax payers pay a higher ad valorem tax than that which have otherwise been required.”
The document from Ward’s office also highlighted the transactions between HCCA and Celtic Commercial Financing, an equipment lease and finance company located in Irvine. According to the information provided, an agreement with Celtic was reached that TRMC would sell hospital equipment to Celtic for $3 million. TRMC would then lease the equipment from Celtic for three years at a cost of $3 million.
After the agreement was made, Celtic wired $3 million into Dr. Benzeevi’s Tulare Asset Management account at Bank of Sierra. On Sep. 13, 2017, Dr. Benzeevi transferred $2.4 million into his HCCA Chase Bank account, according to the report. Five days later, it was reportedly transferred again, this time in the form of a check deposited into a personal account he owned with his wife, Amy Benzeevi. A further $2,454,432.17 of Benzeevi’s own “clean” money was also in the account.
“There is no dispute that the $2.4 million deposited into Dr. Benzeevi’s account derived directly from the Celtic loan transaction,” the filing reads. “During the time period from the deposit of the stolen funds and seizure of the account, the account balance never fell below the $937,931.04 that was seized from the account.”
According to Ward, Dr. Benzeevi had no legal authority to make this transaction, and “unlawfully refused to recognize” Boardmember Senovia Gutierrez’s authority in order to obtain the loans.
“To accomplish this goal, he and his confederates sabotaged regularly scheduled board meetings in order to prevent Senovia Gutierrez from taking the office granted to her by the voters of her district,” Ward wrote. “He then unlawfully sold $3 million of public property to Celtic Commercial Financing.”
Efforts to reach Benzeevi for comment were unsuccessful.
According to Northcraft, a date for an evidentiary hearing is expected to be determined in November.