A three-year, seven-state, $1.5 million investigation into dealings at Tulare Regional Medical Center has produced 40 felony charges against three executives of the hospital’s former management company.

The announcement of the charges was made Tuesday morning by the Tulare County District Attorney’s Office in a news release.

Named in the criminal complaint: Healthcare Conglomerate Associates CEO Dr. Yorai “Benny” Benzeevi of Visalia, chief financial officer Alan Germany of Arizona, and HCCA attorney Bruce R. Greene of Los Angeles.

Charges Include Money Laundering, Embezzlement

It is alleged that the defendants used control of public hospital entities to enrich themselves through the improper use of taxpayer and private loans, and other public integrity crimes, the DA’s Office said. Crimes alleged include misappropriation of government funds, conflicts of interest, money laundering, embezzlement, theft, and failure to disclose funds intended to influence a political campaign.

“We are grateful for the support and patience of the community, as well as the Tulare County Board of Supervisors during this unprecedented investigation,” said Tulare County District Attorney Tim Ward. “The board’s commitment ensured that we were able to utilize our resources fully. We estimate the entirety of the investigation amounts to slightly over $1.5 million in staff hours and overtime, travel, and associated costs.”

Investigators traveled over 70,000 miles inside California and to Arizona, Idaho, Maine, Georgia, Colorado, Michigan, and Washington D.C., during the probe. Fifty-eight search warrants were served, Ward said.

Hospital’s History Under HCCA

Healthcare Conglomerate Associates was established as a management company in 2013 — the same year it won a request for proposal process to manage Tulare’s 112-bed hospital with promises of alleviating a difficult financial situation and completing construction of a stalled tower project.

HCCA began managing the hospital in 2014 and quickly began to report profits and financial stability. Along with concerns about the contract between the healthcare district and HCCA, HCCA’s lack of management experience, and the proposal of a new bond to finance the tower’s construction, this rapid turnaround raised suspicion among a number of residents, who organized a group called Citizens for Hospital Accountability.

CFHA worked to defeat the 2016 $55 million bond measure, Measure I, and, in the same year, elected two new members, Mike Jamaica and Kevin Northcraft, to the healthcare district board. That winter, CFHA members began gathering signatures for a recall effort of board member Dr. Parmod Kumar, who was successfully recalled and replaced by Senovia Gutierrez in July of 2017.

Throughout this time, CFHA also focused on patient care. As the financial situation grew murkier, fewer patients sought care at the hospital, which led to further struggles.

In October of 2017, the new board majority voted to relieve HCCA of its management duties. Once HCCA was gone and the financial mismanagement became clear, the hospital was forced to enter bankruptcy proceedings and soon had to close its doors.

In 2018, after a public hearing process, Adventist Health was hired to manage the hospital.

Alleged Crimes Also Took Place in Inyo County

Some of the alleged crimes are believed to have occurred in Inyo County, Ward said, but those crimes will be prosecuted in Tulare County.

“On behalf of the citizens of Inyo County, I appreciate the huge commitment of resources on the part of Tulare County and its district attorney,” Inyo County District Attorney Tom Hardy said in a statement. “Mr. Ward and his team notified me of their work very early in the investigation, especially as it related to the Southern Inyo Health Care District. …  Given the wide-ranging scope of the allegations and alleged interconnections between activities in Inyo and Tulare County, it is appropriate to combine all the charges in the Tulare County case. I am committed to providing Tulare County with whatever assistance we can.”

Citizens for Hospital Accountability applauded the charges.

“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,” Citizens for Hospital Accountability said in a news release. “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.”

Read the Criminal Complaint