HCCA CEO who put 'profits over people' sentenced, Benny Benzeevi skips jail in Tulare case
Former Healthcare Conglomerate Associates CEO Yorai “Benny” Benzeevi, 62, was sentenced in an historic public corruption case that spanned six years.
On Thursday, Tulare County Judge Michael Sheltzer sentenced Benzeevi to pay restitution of $2.4 million dollars, which has been paid in full to Tulare Local Healthcare District ($2 million) and Southern Inyo Healthcare District ($400,000), along with two years probation, time already served in custody and 600 hours of community service, which have been completed.
The case revolved around HCCA's controversial 2013-2017 administration of Tulare Regional Medical Center that led to patient deaths, a failed bond measure, a half-built tower, recalled board members, unpaid employees, closure of the hospital and bankruptcy. In 2018, Adventist Health took over the public hospital.
Benzeevi previously pleaded no contest to six felony counts and two misdemeanors. They included:
Felony conflict of interest (contract related to funding lawsuit)
Felony conflict of interest (related to the Tulare/Southern Inyo line of credit)
Felony conflict of interest (related to Benzeevi’s loans to Southern Inyo)
Felony conflict of interest (related to HCCA loans and promissory notes to Tulare Hospital)
Felony conflict of interest (related to Celtic leasing transaction)
Felony conflict of interest (related to deed of trust filed against Tulare Hospital District)
Misdemeanor failure to timely disclose campaign expenditures
Misdemeanor using an official position for personal gain (related to refusal to recognize former hospital board member)
When a defendant enters a no-contest plea, they agree to accept the court's sentencing without admitting guilt.
Tulare County District Attorney Tim Ward said he was pleased the victims had been compensated.
"The bedrock of this conviction is payment of restitution amounting to $2.4 million," he said following the February plea. "A major goal was to do everything we could to financially restore the losses caused by the defendant while having the defendant admit responsibility."
Although the victims in the case have been paid in full, Ward said the impact on the city of Tulare can't be forgotten. He urged Sheltzer to send the doctor to jail.
"We cannot forget the human and extremely personal toll the defendant’s actions took on the community," Ward stated on Thursday. “Though we advocated for time in custody, we respect the court’s decisions today. We now look forward to focusing our efforts on the remaining defendant in this case.”
Ward has said this case was his office's most expensive prosecution ever.
'Operating a third-world hospital'
During Thursday's sentencing, victim impact statements were read in front of Benzeevi.
"It cannot be overlooked that there was physical harm done to patients — in some cases, resulting in the ultimate sacrifice of death," Dr. Patricia Drilling-Phelps stated in her letter. "There were victims who suffered and died. Let that sink in a moment. They died because of greed and the need for power, placing profits over people."
Drilling went on to say that under Benzeevi, the hospital had inadequate supplies, faulty equipment, lack of infection control and disrepair across the hospital. She said these issues occurred "because money was being hoarded rather than put back into the hospital."
"HCCA touted first-world financial success while operating a third-world hospital," she said. "Morally, these were intentionally cruel, careless and inhumane acts."
Benzeevi was facing up to 40 years in prison for his criminal counts. When charges were filed in 2020, the district attorney's office had estimated that Benzeevi could have been ordered to pay up to $20 million in restitution to the hospital district if convicted on all counts.
It was unclear how the plea will affect Benzeevi's medical license. According to the Medical Board of California, Benzeevi's license is valid through 2025 and is based in Sherman Oaks.
The fall of HCCA
In 2020, Benzeevi, hospital CFO Alan Germany, and HCCA attorney Bruce Greene were charged with more than 80 combined crimes, including grand theft, conspiracy, money laundering and multiple counts of embezzlement by public officers.
"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 Tulare County DA's Office wrote in a 2020 press release announcing the charges.
In 2020, Ward estimated prosecutors spent $1.5 million in staff hours and overtime, travel and associated costs during the 13,500 hours of investigation.
That total does not include the court time since the charges were filed. A series of the trio's lawyers battled the DA's office over frozen bank accounts, conflicts of interest with the Tulare County District Attorney and defense attorney billing issues as the case went on for more than three years.
This article originally appeared on Visalia Times-Delta: HCCA CEO who bankrupted Tulare hospital skips jail, Benny Benzeevi pays up
