Dr. Yorai ”Benny” Benzeevi is now a felon.
On Friday, the 61-year-old pleaded no contest to six felony and two misdemeanor charges stemming from crimes committed while acting as CEO of the Tulare Local Healthcare District from 2014 to 2017. Tulare County Superior Court Judge Michael Sheltzer accepted the plea agreement during a hearing on February 9.
Benzeevi will be sentenced in Tulare County Superior Court on July 19.
According to the conditions of the plea agreement, Benzeevi will not face jail time. He’ll be under house confinement with an ankle monitor for 120 days at his own expense and will pay $2.4m in restitution, of which $2m will go to the Tulare Local Healthcare District and $400,000 will go to the Southern Inyo Healthcare District, where Benzeevi and Healthcare Conglomerate Associates (HCCA) managed the Southern Inyo Hospital.
Benzeevi was also ordered to serve 420 hours of community service at any healthcare facility.
While the current plea agreement would have Benzeevi serve two years of probation in Los Angeles County after his sentencing, the district attorney’s office intends to ask for a year of jail time.
A statement from Tulare County District Attorney Tim Ward says his office has “requested a year in custody,” but that it will “respect the Judge’s decision at the time of sentencing just as we did with the previous sentencing of co-defendant Alan Germany.”
Benzeevi, through HCCA, managed Tulare Regional Medical Center and other Tulare district properties. During that period, Benzeevi defrauded the Tulare district and the Southern Inyo district through a series of deals designed to benefit him and his company.
Facing similar charges is Bruce Greene, an attorney who represented both HCCA and the Tulare district.
Through his attorney, Greene rejected a plea agreement from Ward’s office in September and maintains his innocence. The State Bar suspended an ongoing disciplinary hearing against Greene pending the outcome of the criminal case against him.
42 counts will be dismissed
Benzeevi and co-defendants Germany and Greene were charged in August 2020; Germany previously pleaded “no contest” in October 2023. Originally, Benzeevi faced 46 felony and misdemeanor counts relating to embezzlement, fraud, conflicts of interest and violations of the Political Reform Act.
Friday’s plea deal saw Benzeevi decline to defend himself against eight of those charges. The remaining 42 charges will be dismissed at the time of sentencing on July 19.
The six felony counts represent various criminal conflicts of interest. Specifically, Benzeevi used Tulare’s money to fund a lawsuit against Dr. Abraham Betre, former head of the Tulare Regional Medical Executive Committee who claimed the committee had been wrongfully dismissed.
Benzeevi also created a line of credit for Inyo using Tulare’s funds, made loans directly to Inyo through a financing company he created, and issued promissory notes to Tulare secured by a deed on district property.
Additionally, Benzeevi failed to disclose campaign expenditures in a timely fashion – including funds used to pay Psy Group, a now-defunct private intelligence agency that attempted to influence the recall election of former Tulare board member Dr. Parmod Kumar – and used his official position for personal gain. Both are misdemeanor crimes.
If Benzeevi were convicted of all 46 original charges, he could have faced up to 44 years behind bars, though Sheltzer told Benzeevi that “there’s no way that any court is going to sentence you to 44 years in county jail,” under existing sentencing guidelines and Prop 47, which Tulare County Deputy District Attorney Trevor Holly agreed with.
The maximum Benzeevi could have served under the charges he pleaded no contest to today was five years and four months.
Sheltzer said that the court was concerned both with punishment, which he believed the felonies served, and restitution.
“Without this type of sentence getting the $2.4m in full would be extremely difficult,” he said.
The restitution amount – $2.4 million – matches the amount of funds that ended up in Benzeevi’s bank accounts after he executed a sale and leaseback of Tulare Regional’s equipment to Celtic Leasing, according to past court filings. Officials with the District Attorney’s office did not confirm whether that restitution amount was intentional or simply coincidental.
Getting those funds to the two districts will be a lengthy process: Benzeevi’s funds were frozen in the United States and in Israel. Holly told the court that he would work with officials at the Department of Justice to craft an order that would unfreeze the funds so that they can be used towards restitution.
Kirk Davis, an Assistant Tulare County District Attorney, spoke to the media after the hearing.
He avoided commenting on the Greene case, including the possibility that Benzeevi could provide testimony against Greene, beyond stating that Greene was “still active in the case, and [that] the litigation is ongoing.”
Davis also declined to comment on any possibility the convictions could impact Benzeevi’s medical license, stating that the medical board was in charge of those decisions. Benzeevi had to report to the California Medical Board at the time he was charged with multiple felonies and must do so again now that he has pleaded no contest.
Nina Marino, Benzeevi’s attorney, did not return a request for comment by publication time. If one is received, this article will be updated.
District attorney’s statement and local reaction
The Tulare County District Attorney’s office touted the plea deal as a win for Tulare County and the Tulare Local Healthcare District in a press release.
“Healthcare is truly a basic quality of life issue and the rural health care system in California is fragile. I view the Tulare Regional Medical Center as a vulnerable victim, and I am pleased the hospital and the citizens of Tulare have persevered to arrive at this significant day,” the statement continues. “Moving forward our efforts and resources will be focused on the remaining defendant in a combined quest for justice for these victims.”
Officials with the Tulare hospital district welcomed the news of Benzeevi’s plea.
“The resolution of this case is long overdue,” Mike Jamaica, a district board member said in a statement.
Kevin Northcraft, the district board’s president, said that he “expressed gratitude to the DA and the citizens who supported the process for their unwavering pursuit of justice considering the crimes committed by Benzeevi.”
Citizens for Hospital Accountability, a group that initially formed eight years ago to oppose Benzeevi’s management of the hospital, also applauded the news.
“Eight years ago, a group of concerned citizens banded together to become one voice called Citizens for Hospital Accountability. We chose our title with care, to reflect that we were a grassroots organization comprised of citizens from all backgrounds within Tulare Local Healthcare District who understood the importance of our local hospital and its rich tradition within our community. We realized that action was necessary to restore accountability and trust. Over the course of the next three years, it became much more. We waged, at times, a heated and ferocious battle against those who wanted to extract every last dime from our healthcare system to satisfy their own power and their own greed at the expense of our young, our old, our sick, our vulnerable and our poor,” the statement reads.
“To our common purpose, today is a monumental day. Benny Benzeevi has finally acknowledged his wrongdoings and is pleading no contest to multiple felonies and making restitution. He is liable for the damage he has done to Tulare. On this day, it isn’t just a saying that justice shall prevail, it is reality. There can be no celebration that any of this happened at all, but there is a celebration to know we have all helped to put an end to it, against all odds,” a statement from the group reads.
“We again wish to thank Tulare County District Attorney Tim Ward, Assistant District Attorney David Alavezos, Supervising Deputy District Attorney and lead prosecutor Trevor Holly, Chief Investigator Lindy Gligorijevic, Assistant Chief Investigator Gregg White, former Tulare County investigator Rodney Klassen and all of the staff members who have worked tirelessly on this marathon of an investigation and to see it to completion. Your dedication is greatly appreciated and will not be forgotten. We will comment more specifically at the sentencing date, after we have digested the totality of today’s historic events.”
Winding road towards closure – literally and figuratively
HCCA came to Tulare in 2014 after prior management led the Tulare Local Healthcare District, which owns Tulare Regional, into financial losses and a tower construction project that remains unfinished today.
The district’s board searched for management partners, and multiple healthcare companies responded – including Adventist Health, which currently leases and operates Tulare Regional. The board instead settled on HCCA, though the consulting firm the board hired to advise it on the decision classified HCCA as an entirely unknown entity.
Initially, the partnership was touted as a rousing success, including audits which showed the hospital’s profitability and solvency had improved. A May 2016 guest column touted “24 consecutive months of profit,” “an annual return last year better than in the past twelve,” and a turnaround that was “recognized nationally.”
News of that success led HCCA to be tapped to take over the Southern Inyo Hospital in 2015 after Southern Inyo’s CEO and board resigned, and the hospital closed to the public. HCCA reopened it in March of 2016, and shepherded the Southern Inyo Healthcare District through a bankruptcy process.
Doctors in Tulare sounded the first alarms in 2016 after HCCA ousted the hospital’s existing Medical Executive Committee in what became a long-running court dispute that was only settled after HCCA ceased managing Tulare Regional.
Concerned community members began to band together and examine the HCCA-Tulare Regional deal more closely: Tulare’s contract with HCCA included provisions that moved all of Tulare’s employees over to HCCA and prohibited the district from hiring its own staff, required the district to pay an extra 30% “compensation premium” on top of an employee’s salary, and gave HCCA the ability to buy the hospital – after voter approval – with the option to defer that 30% premium towards a purchase.
The financial terms of the contract raised eyebrows: HCCA was granted a management fee of $2.7m per year, which rose yearly; on top of that, Tulare had to pay CFO Alan Germany’s salary, charged to the district from August 2014 to June 2017, which started at $39,000 monthly and rose to as high as $56,800 monthly.
At the Southern Inyo Hospital, less onerous terms and more independence were on the menu. The Inyo hospital board president at the time told a local media outlet that their contract was “different than the Tulare contract,” and that “there are no options to buy.”
The smaller hospital also paid a smaller management fee starting at $780,000 annually and got to keep a direct employer relationship with its employees.
Public distrust of the HCCA’s management was a key motivator in the failure of a 2016 bond initiative floated by the Tulare Local Healthcare District and HCCA to finish the hospital’s tower project.
The hospital’s operations and public image began to crumble after the loss: less than a month after the election, in September of 2016, HCCA acknowledged that some employees were laid off “in accordance with our planned and ongoing strategic realignment of the hospital’s operations.”
Reporting would find that as far back as November 2015, HCCA had left Tulare’s vendors unpaid, including $827k owed to a pharmaceutical vendor later repaid with a controversial line of credit, and $44k owed to a consulting vendor that specifically pointed out the irony of the hospital’s publicly-touted turnaround while it privately pled penury to its vendors.
By September 2017, voters had elected two board members – Northcraft and Jamaica – opposed to HCCA’s management of the hospital, and recalled Kumar, one of HCCA’s supporters, selecting Senovia Gutierrez to take his place.
The trio voted to take the hospital into bankruptcy after HCCA claimed the district owed it millions of dollars, missed payroll multiple times, and after Benzeevi told the board that HCCA would not continue to use its own funds to bankroll Tulare Regional’s operations.
The hospital closed on October 29, 2017, after HCCA laid off its employees. Tulare did not have a hospital until Adventist Health moved in and started operations almost a year later, on October 15, 2018.
To the east, in October 2017, Southern Inyo started the process to separate itself from HCCA, claiming in a court hearing that the company had mismanaged its finances and botched opportunities to earn easy revenue.
The first hints of an investigation into how Benzeevi, Germany and Greene conducted business at HCCA and Tulare Regional came in that same hearing, when Southern Inyo officials revealed the hospital was served with a search warrant by Tulare County investigators looking for evidence of transfers that had taken place between Tulare Regional and Southern Inyo.
The next month, a warrant was served at Tulare Regional – investigators were at the hospital for “well over 33 hours straight” collecting evidence, including emails, business records, and other data. The warrants spiraled into what Ward called “the largest investigation ever undertaken by the district attorney’s office” in 2018, including warrants served at Benzeevi’s home, the eventual freezing of Benzeevi’s bank accounts in the US and internationally, and the three criminal indictments.
The Voice will continue to cover the proceedings as Greene’s case continues in the Tulare County Superior Court and the California State Bar Court.