This article has been updated to accurately reflect the jail time the three men could face.
Jail time could be on the horizon for three men accused of plundering the Tulare Local Healthcare District and its hospital, the Tulare Regional Medical Center, with the three facing a combined 46 charges. The full complaint is available to read below.
Dr. Benny Benzeevi, CEO of Healthcare Conglomerate Associates (HCCA); Alan Germany, the company’s former CFO; and Bruce Greene, a BakerHostetler attorney who largely handled Benzeevi’s business affairs, including those of HCCA, were accused of crimes ranging from money laundering to grand theft. HCCA managed the hospital between 2014 and 2017 after district officials sought to turn Tulare Regional around financially and operationally.
Benzeevi could face up to 40 years of prison time if found guilty of all charges, and Greene and Germany could face over 10 years worth of prison time if found guilty of their charges.
The charges are the first public look at the fruits of a multi-year investigation into the company’s conduct in Tulare. The investigation began in the summer of 2017, and by March 2018, Tulare County District Attorney Tim Ward stated that his office’s investigation would be the largest it has ever undertaken — and all indications are that his statement has held true.
“Since 2017, Criminal Investigators have traveled over 70,000 miles to 8 California counties and 6 U.S. states including Arizona, Idaho, Maine, Georgia, Colorado, Michigan, and Washington D.C. Fifty-eight total search warrants were served. Investigators, support staff, and prosecutors dedicated over 13,500 hours tothe investigation. The TCDA Digital Forensics Unit collected approximately 30 terabytes of digital evidence. To put that in context, it would take nearly 45,000 standard CD-ROM discs to hold the information,” Ward said in a press release.
Among a multitude of charges, Benzeevi and Greene were charged with “conspiracy to defraud another of property,” “grand theft of personal property,” and “grand theft by embezzlement of public funds” after HCCA sought out loans on behalf of the district and later used those funds to repay themselves – $499,727.93 to BakerHostetler, Greene’s law firm, and $2.4m to Benzeevi’s personal bank account.
Ward’s office seized approximately $937,000 of the $2.4m from Benzeevi’s bank account, resulting in a protracted legal battle that was decided in the District Attorney’s favor and is currently active in an appellate court.
Multiple charges relate to an intermingling of personnel and funds between Tulare Regional and the Southern Inyo Hospital, a public hospital in Lone Pine that found itself in dire straits and turned to HCCA for management expertise. Those crimes will be prosecuted in Tulare County with the consent of the Inyo County District Attorney’s office.
Benzeevi was also hit with a Conflict of Interest charge for hiring Dr. Parmod Kumar, a Tulare gastroenterologist — and, at the time, a Tulare hospital board member — as the medical director of the Southern Inyo Hospital. Another charge, levied against all three men, relates to a $500,000 line that HCCA unilaterally extended from Tulare to Inyo — without any knowledge or prior approval by the Tulare board.
The filing also alleges that Benzeevi and Germany worked to shuttle funds from Tulare to prop up the Southern Inyo hospital, according to a witness interview; the same witness also alleged that equipment was sent from Tulare to the Inyo hospital.
Southern Inyo and Tulare both launched legal efforts with HCCA as part of their bankruptcy cases; both were later settled.
Benzeevi and Germany also face multiple charges relating to nearly $4m of funds in subsidized interest on Build America Bonds issued by the district that went unpaid between August 2015 through 2017.
Ward previously spoke to the hospital board and stated that because the funds weren’t directed to their intended recipient, the Tulare County Tax Collector’s office, taxpayers paid too much in interest on those bonds.
“Since the tax rolls had to go out, those tax bills were sent out; and, in August of 2015, the taxpayers of Tulare paid interest on that bond that they were otherwise not obligated, through this program, to pay,” he said at the time. “We estimate that the taxpayers; the residents and business of the city, during those times, paid hundreds of thousands of dollars that they were not otherwise obligated to pay,”
Citizens for Hospital Accountability, a Tulare group which led the charge against what it claimed was HCCA’s mismanagement of the hospital, celebrated the news of the charges on Tuesday.
“Three years ago, representatives from Citizens for Hospital Accountability approached the District Attorney’s Office and presented serious allegations regarding our Tulare hospital’s management. It was our belief that criminal activities were occurring and we asked for an investigation by the District Attorney,” a release from the group reads. “Today, our initial efforts were finally legitimized in the filing of charges against Benny Benzeevi, Alan Germany and Bruce Greene. These three individuals did irreparable harm to our hospital, its employees and their retirement funds, its patients who trusted their health to this hospital, and the grieving families who have been devastated by the unnecessary deaths of their loved ones.”
The group thanked Ward and the District Attorney’s office members and investigators, including Lindy Gligorijevic, Gregg White, Rodney Klassen, and David Alavezos.
“We look forward in anticipation to the day when justice will prevail, and to a time when Benzeevi, Germany and Greene will no longer be free to prey on other unsuspecting victims,” the release states.
Where are they now?
Benzeevi left the United States in 2019 and has not since returned, according to the District Attorney’s filing, which states that flight records show he left in 2019 “and has not returned to the country since.” He may be residing in Israel, where he was born; a 2018 legal filing signed by Benzeevi indicates that he was residing in Tel Aviv at the time.
According to his LinkedIn, Germany has served in multiple financial roles since moving on from Tulare, most recently serving as a regional CFO for PeaceHealth in Washington state. Greene continues to serve as an attorney with the BakerHostetler firm; he and the firm severed their ties with Benzeevi in late 2017.
Representatives for Benzeevi and Greene did not respond by publication time; this article will be updated when a response is received.
The rocky road to today
Benzeevi and Germany, through HCCA, managed the operations of Tulare Regional and the Southern Inyo Hospital in Lone Pine. Both hospitals were struggling and looking for strong, stable management to turn their fortunes around: the Tulare district entered into an agreement with HCCA in 2013, against the advisement of a consulting firm hired specifically to pick a management partner.
The early portion of HCCA’s time at Tulare appeared from the outside to be a picture-perfect turnaround story, leading desperate officials in Inyo County — the Southern Inyo Hospital had been shuttered after its board and CEO resigned — to reach out to Assemblyman Devon Mathis’ chief of staff, who connected them with HCCA based on the success in Tulare, according to the Visalia Times-Delta.
Tulare had “beaten the odds” and was profitable for 35 consecutive months, with a clear path towards finishing the tower according to one HCCA promotional booklet made in March 2017.
But in the background, creditors, utilities, and even Tulare County went unpaid during this time: Southern California Edison claimed bills went unpaid as early as January 2017, rent to Tulare County for the Hillman Clinic went unpaid as early as February 2017, and Bank of the Sierra was owed $605,288.73 in principal, interest and late fees on an $800,000 line of credit — taken out to satisfy debt to a pharmaceutical vendor.
Regulators also found the hospital management at fault in deaths and accidents at the hospital, complaints which HCCA representatives called the “latest episode of the vicious attempts by a few disgruntled hospitals set to vilify and destroy Tulare’s hospital.”
Court filings would later show that as HCCA was touting profitability, it was unilaterally extending loans to the district at various points through 2015, 2016 and 2017, totalling some $10.2m in promissory notes. Those notes would become the basis for a deed that the company executed tying up the Tulare district’s Evolutions Gym as collateral.
HCCA executives and officials at each district continued to tout success, until the relationships between HCCA and its partner hospitals began to fray.
That fraying started in Tulare when Citizens for Hospital Accountability led a long campaign against HCCA’s management in Tulare — starting with a successful campaign against Tulare’s Measure I, a bond measure that would have financed the completion of a troubled tower construction project for Tulare Regional.
That tower had been financed with a prior bond — and critics wanted to know where that money went before approving another bond measure. HCCA’s lack of experience in hospital management — the company was legally formed in the State of California after it was chosen by the board — was another key element of the Citizens’ groups critiques.
The group claimed that the bond measure lacked oversight structures and was unthinkable without accounting for how a prior bond measure, ostensibly meant to build the tower, had left the construction project unfinished without an end in sight.
The Citizens group later saw two of its members elected to the Tulare hospital board — Kevin Northcraft and Mike Jamaica — and successfully campaigned for the recall of Parmod Kumar, then the longest-serving member on the hospital board.
Those members later led an effort to oust HCCA from the hospital, and the new board members said they were eventually forced to file bankruptcy and temporarily shutter the hospital due to financial mismanagement and the lack of a clear next choice for a management partner.
Subsequently, the district leased the hospital campus to Adventist Health, which now operates Tulare Regional as Adventist Health Tulare.
Investigation’s winding road
The first public inklings of an investigation came when a warrant was served on the Southern Inyo Hospital in October 2017. The hospital’s lawyer at the time, Ashley McDow, told the United States Bankruptcy Court that the hospital had been served with a warrant by the Tulare County District Attorney’s office.
Investigators were looking for “property they think has been [at the Inyo hospital],” and that “checkboxes” on the warrant included “that the property was stolen or embezzled,” “things were used for the means of committing a felony,” and “that these things are things that can be seized,” she said.
They also searched the hospital’s computers and left with “a couple thumbdrives full of files,” McDow said.
Tulare Regional was soon served its own warrant, and investigators spent “well over 33 hours” on the premises in November 2017. Investigators sought and seized “computers, cell phones, external storage devices, flash drives, payroll records and all emails for a total of seven email addresses,” according to a statement from the DA’s office.
HCCA’s attorney at the time, Mark Levinson, accused Ward’s office of being “under the thumb of the [Tulare Local Healthcare] District.”
The investigation continued onward when warrants were served on Benzeevi and Germany personally, and investigators this year seized further documents from the Tulare hospital when Greene came under the office’s crosshairs. Those warrants included the seizure of $937,000 from Benzeevi’s bank accounts.