The trial process for Dr. Yorai ‘Benny’ Benzeevi, Bruce Greene and Alan Germany could begin — after three years — with a preliminary hearing on November 7 at 10 a.m.
Court Threatens Grand Jury Indictment
Attorneys for the co-defendants were back in front of Tulare County Superior Court Judge Michael Sheltzer for hearings on Tuesday afternoon, August 1, including setting a trial date.
It marks the 16th time the court has scheduled a start of proceedings in the felony case against the trio. On this occasion, Sheltzer made it clear the court and prosecution would allow the case to be transferred to a grand jury should there be further attempts at delay. Indictment by a grand jury would eliminate the need for a preliminary hearing, moving the case directly to trial.
The original criminal complaint – including dozens of felony accusations of fraud, embezzlement of public funds and money laundering – was filed three years ago on August 11 2020.
Hearings held Tuesday also addressed several other pending matters.
Co-Defendants Greene, Germany Seek Settlement
The first of the hearings involved only attorneys for Greene and Germany, who met in a closed conference with Sheltzer to discuss the possibility of settling the case. The outcome of this initial talk was not discussed in open court. A continuation of the settlement is set for 10 a.m. on August 22.
A hearing to confirm the November 7 trial date is also set for that time.
All of the co-defendants are charged with a long list of felony crimes associated with their management of Tulare Regional Medical Center (TRMC). Benzeevi acted as CEO and president of Healthcare Conglomerate Associates (HCCA), a company hired by the Tulare Local Healthcare District (TLHCD) — which owns TRMC — to run its hospital.
The trio is also accused of similar behavior while acting as the management group for the Southern Inyo Healthcare District’s Southern Inyo Hospital.
The behavior of the co-defendants while they controlled TRMC led to multiple felony charges detailing alleged widespread criminal behavior and intentional fraud. The charges were filed initially in 2020, but several changes in legal representation for the accused – as well as attempts to have the venue changed and the Tulare County District Attorney’s Office barred from prosecution – have delayed the matter repeatedly.
Greene acted as legal counsel to both TLHCD and HCCA, while Germany was employed as HCCA’s chief financial officer. The California State Bar’s listing page for Greene warns that the attorney is currently facing felony charges.
Benzeevi’s Attorney Objects to Co-defendants’ Settlement Conference
Greene and Germany did not appear at the hearings. Benzeevi and his attorney, Nina Marino, appeared via teleconference.
Marino immediately asked why her client had been asked to appear once the court session began.
“Your honor, I’m a little unclear as to what the court intends to accomplish today with respect to Dr. Benzeevi,” she said.
Sheltzer replied he hoped to set a preliminary hearing date for the co-defendants’ trial.
“Ah, I see, that makes sense,” Marino told the judge. “Although you know I’m objecting, but I know that’s what you want to do anyway. I know.”
Marino took over the role of defending Benzeevi in June. This followed the departure of former U.S. attorney McGregor Scott as defense counsel.
The judge set November 7 for the start of the hearing. The prosecution estimates the length of the preliminary hearing – limited to three courtroom sessions a week – could be as long as two months. Deputy district attorney Trevor Holly told the court he expects to summon 80 witnesses against Benzeevi, Greene and Germany.
Marino complained her office has yet to receive a list of potential witnesses against her client. She also appeared to be overwhelmed by the vast amount of evidence in the case against the trio.
“I’ve made my position clear before your honor,” she said. “I do not believe I’ll be ready to do a preliminary hearing in November given the volume of discovery in this case which exceeds 125 gigabytes and more than 1.5 million pages.”
Sheltzer, however, was firm.
“This case needs to move forward,” he said. “We’ve been in a holding pattern for a couple of years now essentially, and so I’m anxious to move forward.”
DA Holly promised to provide a list of potential witnesses to Marino.
Benzeevi’s Finances at Issue
Taking up the issue of Benzeevi’s current finances, Holly told the court his office has discovered irregularities in Benzeevi’s banking records. Those records were supplied at a recent hearing in order to gauge Benzeevi’s compliance with court-ordered restrictions on his spending.
Further, the DA is alleging possible criminal behavior by Benzeevi’s former attorney Scott. Holly, in a letter sent to Sheltzer on July 13, said Scott failed to set up a trust account for Benzeevi’s assets. Further, Holly said Scott should not be relieved of his duties in the case until it is determined why he did not set up the court-ordered trust account.
“We request that the court not excuse Mr. Scott, as further information is required of him, and he may have to take some responsibility for the failure to set up an account,” Holly wrote. “We also request the court provide the information it has received from the defense, as we have a right to evaluate any nonprivileged information prior [to] any hearing or decision on the matter.”
Scott was ordered to provide the court a written explanation of why he failed to open a trust account for Benzeevi. He has not done so, according to Holly’s letter.
Benzeevi’s Spending Violated Court Order
The court also instructed Benzeevi not to open a personal bank account in a December 13, 2022 ruling, and Holly alleges he violated that order.
“The funds were to be placed in a trust account as only expenditures for specific purposes were to be permitted,” Holly wrote. “This is one of the reasons that the court specifically denied Dr. Benzeevi’s request for a private bank account and required a trust account, which he has done in violation of the court’s order. A full accounting must not only provide a list of transactions, but document what those transactions were for.”
A review of banking documents for Benzeevi’s private account show tens of thousands of dollars in gaps and unauthorized expenditures. The records provided also appear to be incomplete.
Apparently unauthorized payments include $7,000 to an Israeli law firm and a $25,000 payment to Scott’s law firm, King and Spalding. There may be more spending irregularities to discover, Holly told Judge Sheltzer during Tuesday’s hearings.
“I think there is a lot more here that needs to be explored, a lot more that needs to be discussed,” he said. “And we saw some other payments, so I think we had come up with at least $70,000 roughly that was unaccounted for.”
Holly implied Scott was simply overwhelmed by the requirements of defending Benzeevi, leaving them unable to comply with the court orders.
“I understand what was brought up previously that it may have been untenable for the law firm to do this, but it was incumbent upon them to then come to the court and tell us,” Holly said. “[Scott should have not allowed] the defendant to start spending money, and certainly not spending money in ways that were not authorized at rates authorized by this court.”
Benzeevi ‘Thumbed His Nose’ at Court Orders
Sheltzer said an additional hearing is required to sort out Benzeevi’s current finances.
“I do think that we need to have a hearing regarding both what the reasonable attorney fees are and, in addition, what reasonable living expenses are,” he said.
Marino told the court she was “troubled” by the DA’s approach to ironing out Benzeevi’s financial standing, hinting at a lack of professionalism on Holly’s part.
“I had contacted them last week by a letter. I made a proposal to them,” Marino said. “I responded to their inquiries as they were at our last court appearance. They never responded to me. If they have questions about specific expenditures, I don’t really think that this is something that happens in open court. I don’t see why we as professionals can’t resolve this outside of the court being necessarily involved.”
Marino requested better communication with the DA’s office. She also claimed additional scrutiny of Benzeevi’s expenses and spending might further delay the opening of the trial.
“If we’re going to have a hearing about what constitutes reasonable attorneys fees and living expenses then that will obviously take time away from me being able to prepare for preliminary hearing,” Marino said.
DA Holly, however, urged caution, as Benzeevi is accused of crimes involving the hiding of money. Issues with his finances were not created by his current counsel, he said, but by Benzeevi himself.
“It’s incumbent upon my part to remind the court that specifically with these funds and things of this nature this has been going on for multiple years with Dr. Benzeevi,” Holly said.
Benzeevi’s foreign bank accounts were seized when they were used for unauthorized transfers. The behavior, Holly said, reflects a norm of behavior for Benzeevi.
“The defendant has thumbed its nose at this court’s orders the entire process,” he said.
Holly said strict control of Benzeevi’s accounts has already led to new information about his financial status. Benzeevi, in the early stages of the legal process, claimed to be unemployed, according to the DA.
“It wasn’t until the court said, ‘I’m not giving you the seized funds’ that he magically had a job,” Holly said.
Benzeevi’s New Lawyer Threatens to Quit Case
Benzeevi’s defense claims the DA has failed to distinguish between “untainted” and “tainted” funds, meaning the money Benzeevi is accused of defrauding from his alleged victims and the money he has since earned legally through employment or other sources. Marino said she wants another chance to work the issue out off-the-record.
“I would ask you to give me an opportunity again to try to work this out with the district attorney between now and [the next hearing on August 22] and respond to their inquiries and come to an agreement,” she said.
Holly, however, said his office still has additional concerns about Benzeevi’s spending and income sources, which he called “a continued pattern by this defendant.”. Marino appeared frustrated.
“Well, they have concerns that they want to address, then I’ll address them,” she said. “Then ask me, right?”
The DA and judge then discussed the possibility of an interim spending agreement. A cap on attorney’s fees was suggested, drawing an objection and a threat from Marino.
“I object to that, your honor. If this court is going to put any kind of interim order of $10,000 a month of attorney’s fees I’m going to ask to withdraw right now,” she said. “There’s absolutely no way on God’s green earth that I can work this case for that amount of money a month. It is absurd. Absurd! I guess Dr. Benzeevi can start again with another lawyer.”
Lawyer Has ‘Family to Feed’
When the judge then asked Marino what a reasonable amount for attorney’s fees would be while a formal arrangement is made, she again objected, this time taking Sheltzer to task and refusing to consider any spending limit for her services.
“That’s not the way this works that I should have to, right now, say what I think is reasonable per month,” she said. “What is reasonable per month is what I bill. Period. That’s reasonable.”
In an apparent contradiction, Marino later told the court Benzeevi’s current salary was inadequate to cover the cost of her services.
“Let me be very clear: My attorney’s fees are not even covered by Dr. Benzeevi’s salary, and I am losing money every month,” she said. “I’m not going to continue to do that by some interim court order. I can’t, your honor. I’m a small firm. I have a family to feed.”
She asked the court to allow Benzeevi to continue spending from a personal bank account without oversight until a formal hearing decides the matter. The DA objected to maintaining a status quo that allowed an ongoing violation of the court’s orders.
Sheltzer then took matters back under control.
“All right, here’s what we’re gonna do. We have a hearing in a couple of weeks. I would like to have pleadings with respect to reasonable attorney fees with some law as to what standard the court should apply,” he said. “it’s not just whatever you say. It’s not carte blanche.”
And he did not allow the matter of Benzeevi’s apparent violation of his orders to slide out of notice. He apparently expects Benzeevi and his attorney to explain his extralegal behavior.
“Then there’s simply the issue also of what happened between the time the court made the order and the time that we came back to court the last time, when essentially it seems, to the court at least, that the Court’s order was flaunted, because exactly what the court refused to allow Dr. Benzeevi to do, is exactly what he went ahead and did.”
The next hearings in the case – a continuance of the settlement hearing for Greene and Germany and a return to the matter of Benzeevi’s finances – is set for August 22.