Prominent US Modi supporter Dr. Akshay Desai in hiding, running from law in $25M defrauding case


Federal agents raid Universal Health Care headquarters Dr. Akshay Desai goes into hiding; investors lose $25 million

By A Correspondent, Indiatribune.com

St. Petersburg, FL: Indian American physicians and entrepreneurs, who invested over $25 million in Dr. Akshay Desai’s Universal Health Care Group, Inc., are seething in anger after the company filed for bankruptcy. The Surat-born 55-year-old Dr. Desai, a high profile entrepreneur in Florida, who was a luminary of the Republic Party for his fundraising abilities and was closed to presidential contender Mitt Romeny, has gone underground according to report.

Dr. Desai, in an interview six months ago, had claimed: “My company is now doing business in 20 states and this year we are expecting revenue of $1.5 billion.”

The state documents portray Universal, as a company in deep financial distress and badly mismanaged. Universal Health Care executives overstated assets and submitted “misleading financial statements” to the state and a major creditor, according to state documents released on March 28 by the Office of Insurance Regulation.

After Federal Bureau of Investigation agents on March 28 raided the headquarters of Universal Health Care Group Inc, in St Petersburg, Florida, which has gone belly up and filed for bankruptcy throwing over a 1,000 employees out of work, the Department of Justice has called on the bankruptcy court to appoint a trustee for this major Medicare provider.

Guy G Gebhardt, a DOJ official and a US Trustee in Florida, in court documents filed on April 3, in the wake of the search-and-seizure warrant executed by the FBI as part of an investigation that federal laws may have been violated and criminal indictments are likely, reiterated that it was imperative that a trustee take over the reins of Universal.

He said he strongly believed there are grounds to suspect that the hierarchy of the company has committed fraud through false statements amounting to criminal conduct in its financial reporting.

The Miami investment group led by Miguel “Mike” Fernandez earlier had expressed interest in buying Universal, but backed away two days later without comment after seeing the presentation.

Universal listed its Medicare Advantage membership as 90,000, Medicaid enrollees as 64,000. About 43 percent of the HMO members in Florida are patients, who require extra care — and bring in higher premiums from Medicare — because they have diabetes, lung disease or dementia.

A chart shows the company has brought in more than $1 billion in premiums a year, most of it from Medicare. Yet, according to another chart, the company lost $61 million in 2011 and $3 million last year.

Among some of the major investors in Universal were doctors Zach Zachariah, another longtime major Republican Party fundraiser, who had ploughed in over $6 million, and Raj Gupta, who had invested over $4 million.

“He is going to pay for his mistakes because something is not right,’’ Dr. Gupta, a Fort Lauderdale physician, said. “He told me he can do whatever he wants and does not have to listen to me or any other investor.’’

Several other Indian American physicians, including Dr. Raghavendra Vijayanagar, founder and former chairman of the Indian American Republican Council, and several entrepreneurs, and even some academics had invested anywhere from $250,000 to $1 million each, and among them there was an overriding sense of deep disappointment and despondency, with one of them saying, “All the investors have been right-royally screwed.”

“Who the hell knows what he did with all the money,” one said. “Hundreds of millions of dollars and God only knows where the money went,” this investor said, adding, mockingly, “He was living larger then life, flying in private jets and talking big to Romney and all those people, and of course, nobody wants to talk to him now, and all the politicians have washed their hands of him.”

According to its Web site, Universal provided federal- funded entitlement insurance programs such as Medicare and Medicaid to nearly 200,000 customers in 19 states and had 40,000 Medicare and 60,000 Medicaid members in Florida alone, who were now in a quandary regarding the future of their health insurance.

The Tampa Bay Times reported that when the FBI agents raided the Universal headquarters on March 28, employees were ordered out and told to immediately get away from their computers.

The FBI raid was carried out during the same week that the bankruptcy court trustee had alleged “a pattern of dishonesty or gross mismanagement,” including “side deals” that benefited insiders, and had cited examples where more than $18.3 million had been transferred to a Universal subsidiary also founded by Dr. Desai and $2.2 million in “bonuses and other compensation” to company officers Desai, Patel and Ludy in addition to their salaries, also in 2012.

The trustee said that even as Universal was knee-deep in financial trouble, Desai had continued to draw a $900,000 salary and another $2.5 million or more in bonuses and other compensation in 2012.

After the FBI raid, Desai, who was easily accessible, couldn’t be reached and Zachariah, Gupta and others who had invested in Universal, said they could not reach him either and believed he had gone underground or may have left the country.

Starting in 2006, Universal’s Any, Any Any plan — members purportedly could see any doctor anywhere at any time — drew thousands of members but also complaints of false advertising, poor customer service and denied medical treatments. The company temporarily suspended enrollment, and in 2008 signed an agreement with state regulators to beef up reserves to handle the swelling volume of claims.

Over the next few years Universal continued to grow, eventually expanding to 23 states and serving 140,000 members. In 2010, it spent $9 million for a new headquarters on Central Avenue in St. Petersburg and another $750,000 for renovations.

It paid more than $500,000 for a 28th floor condo in nearby Signature Place, known for its sleek architecture and sweeping views of the waterfront. Employees joked that Universal needed the condo as temporary housing for the many executives who cycled through — the company had five chief financial officers in six years.

For the past three years, Medicare officials hammered Universal for poor quality, urging potential members to use caution before selecting it.

The first public notice that Universal was in serious financial trouble came in November when it agreed to stop selling Medicare policies in Georgia. That state’s insurance commissioner cited Universal’s net loss of $22.1 million in the first six months of the year as reason for the halt.

On Feb. 4, the Florida Office of Insurance Regulation deemed Universal nearly insolvent and accused executives of a broad pattern of financial mismanagement — including fraud and diversion of funds — under Desai’s leadership.

Two days later, Universal Health Care Group filed for bankruptcy, listing $50 million to $100 million in assets and $10 million to $50 million in liabilities. Among those to whom the company said it owes an “undetermined’’ amount: Desai and his wife, Seema.

The Tampa Bay Times also said that Desai could not be reached and that “no one answered the door at his $2.6 million bay front Snell Isle mansion. A burgundy SUV and a dark silver Audi R8 sports car sat in the driveway, but the gates to the property were closed.

 

Immediate Release-Jan Swasthya Abhiyan Calls For National Debate for ‘Universal Health Care’


Press Statement on the occasion of World Health Day – April 7th 2012

Jan Swasthya Abhiyan Calls For National Debate On Design Of Proposed System For ‘Universal Health Care’

Ensure quality, free health care for all as a right: Give priority to expansion and improvement of Public health services, regulate Private medical sector

Over the past year there has been a lot of interest in and visibility of the concept of Universal Health Care. The Planning commission had set up the High Level Expert Group (HLEG) on Universal Health Care (UHC) which has submitted its recommendations in Nov. 2011. The Planning Commission is now considering implementation of Universal health care in some form during the XIIth Five year plan. JSA welcomes this interest and commitment to Health care for All by the Government of India. On the occasion of 7th April, 2012 World Health Day, JSA would like to set out clearly our views on the issue as well as express serious concern with the direction in which the discourse on Universal Health Care seems to be taking.

THE HLEG AND PLANNING COMMISSION STEERING COMMITTEE REPORTS

The JSA welcomes a number of key aspects of the HLEG-UHC report. Most importantly we appreciate:

 The emphasis on the concept of “universal”, of including every citizen, unlike the currently dominant approach of “selective” approach of targeting the poor

 Clear emphasis on tax-based financing of the health system, rejection of insurance in the financing and provisioning of universal health care.

 Recommendation to abolish user fees in the health system.

 Definite commitment to “Free Medicines for ALL” in the Public Health System.

 Recommendation of strengthening and the expanding the public sector

 Recommendation to establish Urban UHC system.

Defining the need and urgency of private sector regulation, as well as outlining a potential regulatory structure.

 Bringing Community based accountability mechanisms to the center stage.

More recently the Steering Group on Health of the Planning commission finalized its report which incorporates (interprets) the findings of the HLEG into the Planning Commission process. However the Steering committee report contains recommendations that would defeat the purpose and spirit behind any evolving process of Universal Health Care.

 The reduction of the comprehensive Essential Health Package suggested by the HLEG into just RCH and National Health Programes. This is NOT a Universal health care entitlement.

 The concept of giving financial and operational autonomy of the public health facilities is also very problematic. Financial autonomy means leaving the public health system to “fend for themselves”. This will be very damaging to any hopes for a Universal System.

 The concept of “provider choice” to choose between private and public providers is also unacceptable. Especially during last 20 years, the public health system has been neglected and made sick whereas the private sector has received encouragement for un regulated growth.

 JSA believes that the private sector should play a complementary / supplementary role, on the terms defined by a strengthened public health system accountable to the people.

 Steering Committee report suggests that one district in each state pilot this concept in the first year of the plan. We would strongly suggest that the unit of pilot should logically be the state, and more over that such pilots be initiated only after full discussion and public debate.

JSA’s VISION FOR A UNIVERSAL HEALTH CARE SYSTEM

We firmly believe that the public health system has to be the back bone of any universal health system. Our emphasis should be on strengthening of the Public Health system, especially the primary level of care. The public sector should be brought up to its full functional capacity and expanded.

The private sector needs to be involved in the UHC system only on the terms of public good. Integration of the public and private sector is to be seen in terms of an integration of the “logic” of the health system. Corporate profits should not be allowed to lead or define health provision. The health system has to be effectively and transparently regulated with its primary goal being the people’s welfare rather than private profit. It is only under such circumstances that we can develop a UHC system that will truly serve the needs of the people equitably.

UHC system should be based on tax based financing. Present models of publicly financed commercial insurance (such as Arogyasri scheme in Andhra Pradesh) have proved to be highly problematic in terms of scope and rationality of care, and become financial drain on the exchequer without delivering anything like Universal health care.

The governance of the whole UHC system must be firmly people centered and rights based, with a community led and focused process. We visualize institutionalizing a process of community based monitoring, planning and action for health which is evolved based on experiences in a number of states of the country in which JSA partners are involved.

Jan Swasthya Abhiyan call for action on Universal Health care

Given this situation the JSA calls for the following:

 A national public debate on the contours of the proposed universal health care system. Such an important issue cannot be rushed through and its various strands need to be understood, discussed and commented upon widely by the people.

 Definition of a clear, transparent and time bound road map for strengthening and expanding the public health system while improving its functioning and accountability; this must include allocation of adequate, enhanced budgets.

 Enactment of adequate laws guaranteeing the right to health, including National and State Health acts, which would lay down the framework for regulation of the health system, particularly relevant for private medical providers. Providing entitlements must be accompanied by a clear framework for accountability and grievance redressal.

 While developing and operationalising the universal health care system, highest priority must be given to significant expansion and improvement of public health services. Regulated private providers should not be competing with public providers for common resources, rather they may be in-sourced to provide services, but never as a substitute to the public sector.

 Ensuring forums for participation of community members, community based groups and civil society organizations along with elected representatives and public health functionaries at various levels, for planning, monitoring and reviewing the functioning of the universal health care system.

We must be aware that the direction of developing universal health care in India must be towards strengthening the public health system and socialization of health care, rather than promoting further expansion of unregulated, profit-oriented private medical care. Hence a national debate is essential and there should be no haste in rolling out these concepts – even the looming large of the General elections should not become an excuse for the government to short circuit and distort the concept of Universal Health Care for narrow political gains.

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