This article has been updated to clarify that Benzeevi’s assets can be kept while he is being investigated.
The Tulare County District Attorney’s office can keep assets and property seized from Dr. Benny Benzeevi while the office investigates his actions managing Tulare Regional Medical Center, Hon. Judge John Bianco ruled today.
Proceedings lasted multiple weeks, beginning on February 19, and ending today, including a break during the last two weeks of February.
The evidentiary hearing centered on a single question: were the assets and property “contraband” from any crimes that Benzeevi may have committed?
If so, the office could keep them; if not, they needed to be returned to Benzeevi.
In August of 2017, Benzeevi established a $3m lease-back loan through Celtic Leasing by selling Tulare Regional Medical Center property. Benzeevi is CEO of Healthcare Conglomerate Associates, which managed the hospital at the time.
Through a series of transactions, Benzeevi eventually ended up with $2.4m in his personal bank account, according to court documents and the DA’s office.
The remaining $937,000 of the Celtic funds remaining in Benzeevi’s personal account was seized by the DA in April, 2018.
According to testimony in the case, no payments were ever made by HCCA or the district on the $80,000/mo lease agreement.
Elliot Peters, lead attorney for Benzeevi and HCCA, contended that HCCA’s wide-ranging management contract allowed Benzeevi to pay himself back for loans he made to the hospital district.
These loans – as evidenced by promisory notes – came with an interest rate of ten percent.
Trevor Holly, an attorney with the district attorney’s office, didn’t agree with that assessment, but did state that Benzeevi had a fiduciary duty to the hospital preventing him from “self-dealing.”
Benzeevi could potentially, Judge Bianco found, be prosecuted under California Government Codes 1090 and 87100, justifying the district attorney’s continued hold on the seized assets.
Government Code 1090 states:
“(a) Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Nor shall state, county, district, judicial district, and city officers or employees be purchasers at any sale or vendors at any purchase made by them in their official capacity.
(b) An individual shall not aid or abet a Member of the Legislature or a state, county, district, judicial district, or city officer or employee in violating subdivision (a).”
Government Code 87100 states:
“No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.”
“The withdrawl of these funds went to deprive the district,” Bianco said. “These funds were not taken openly and unavowed.”