BCHF: Where's the Money?
Last updated 11/1/2021 at 12:40pm
The multiple and alleged fraudulent practices of Borrego Community Health Foundation (BCHF) have no relationship to the Borrego Springs clinic. Clinic employees had nothing to do with the legal mess that the former CEO’s, officers, and Trustees created. The problems came from the top, not generally from the employee level; and certainly, not at the Borrego Springs clinic.
The clinic’s focus, underserved populations, was the victim, as were professionals, like Jan Jones and Dr. Pam McEvoy. The term “Borrego Health” also refers to the administration and Board of Trustees of the Borrego Community Health Foundation (BCHF), and not the local clinic. Board or Board of Trustees refers to the volunteer community members that have fiduciary and regulatory oversight of the CEO’s management of the clinics and their services.
The issue of quality of care at the clinic is only indirectly connected to the millions upon millions of dollars that were siphoned from the funding prerogatives of the Foundation into the bank accounts of private individuals at the executive and administrative levels. The people who got rich were not employees of the Borrego Springs Clinic. The only role the local clinic had was to give the deceased and founder of BCHF, Bruce Hebets, his first clinic in 2004. Along came the FQHC status, offering higher Medicaid and Medicare reimbursements and better access to government healthcare grants. What grew into a massive theft of taxpayer funds and explosive expansion of BCHF into 25 clinics was what Hebets was doing with help from some friends.
Can the Foundation recover the millions of dollars Hebets and his successor, former CEO Mikia Wallis, gave to the likes of Daryl Priest? And, not just for the $11.5 million in inflated rent fees, the subject of Borrego Health’s current legal suit. But the estimated $100 million sucked from the BCHF budget and the clinics by Priest’s privately-owned company – Premier Healthcare Management.
Where are the mountains of dollars illegally stolen from the non-profit organization that could have saved lives, set children on the path to a lifetime of health, and served the clinics, employees and patients, in so many positive ways? And what about others who were complicit and benefited financially, besides Hebets and Priest?
For example, was the previous Board required to give Wallis, Hebets’ clone, a $500,000 settlement to extricate her from the CEO’s position?
The members of the Board are all new to Borrego Health with the exception of Board Chairwoman Sandra Hansberger; board member and former chairman, Dan Anderson; and Borrego board members, David Hernandez and Martha Deichler. It’s important when trying to untangle the complex web of deceit to understand the role previous boards and executive committees, handpicked by Hebets played, versus the role of the current board. Hansberger’s Board is struggling to keep the clinics open, and juggle the legal demands placed on it by the Department of Health Care Services, to cleanse the house of Hebets.
When Hebets retired in 2018, he lost control of the board. When Anderson took over the board, he began appointing new members from Riverside, who knew nothing of Hebets or his shenanigans. Another change in the board came in July 1, when Hansberger took over as chair of the Borrego Health Board of Trustees, and has been faced with the daunting challenge of untangling the layers of corruption ever since. Hansberger, and the current board of trustees are tasked with resolving legal and financial problems created by Hebets-appointed Boards. These people either didn’t know the laws, even though it would be a priority for a Board member, blindly trusted Hebets, or didn’t care as long as the earnings were growing.
The Hansberger’s Board is under the thumb of the state regulators. DHCS has mandated a “Correction Action Plan” forcing Borrego Health to comply with recommendations designed to prevent future abuse of health care funds and resolve the misuse of government funds during the Hebets/Wallis regime. One requirement is that Borrego Health Trustees immediately create a policy prohibiting nepotism. What to do about the ones that benefited from the family and friends hiring policy is only one question, facing the board of trustees legally and practically?
According to Hansberger, Borrego Health did not have a nepotism policy. The only policy the Foundation had relating to hiring conflicts was written by Hebets, and urged executives to “Hire family and friends.”
Under former CEOs Hebets and Wallis, the state and federal governments were taking really good financial care of a hoard of BCHF executives and officers at the administrative level. There were big benefits, big incentives and big salaries. All needed to buy big homes, expensive cars, boats, and support years of Bruce and Karen Hebets’ $1 million in annual salaries. Can any of Hebets ill-gotten gains, along with others who benefitted, be recovered?
The issue of salary compensation and what is competitive versus overkill, is another thing the Board is wrestling with. According to Hansberger, “Over the past two years the Board has taken a serious look at compensation and has hired experienced firms to look at employee compensation and benefits. The studies found both over and under-compensation. Since receiving the results of the studies, the Board has acted on implementing a more equitable pay scale.”
Fraud and misuse of government health care insurance also drives costs up. If for some reasons the salaries are comparable then how about getting rid of $20,000 in benefits? Please discontinue the $17,500 of insurance for officers. Known as the special gift to high performers, the sketchy life insurance policy is underwritten by Borrego Health and tax-free. Everything one needs to know about this bonus is that it was sold to the Foundation by Hebets’ brother, Bill, the Borrego Health Benefits Officer.
The costs of cleaning house are piling up. One more blow to the clinics’ budgets. The Board has been forced to hire attorneys, fiscal and other consultants, whose fees are added to salaries of the state-appointed monitors that oversee Borrego Health’s compliance with the rules. The Board needs to continue to try to recover stolen funds, and find new sources of revenue to survive the loss of their contract dental revenues, which provided over 60 percent of Borrego Health’s funding.
For example, remember the Borrego Independent Physicians Association (BIPA) owned by Hebets’ wife Karen, who received “A support donation” from Borrego Health to the tune of $2.7 million and a loan of $440,000 under Hebets leadership. Was the loan paid back? Others that probably received a financial share of the BIPA were Mikia Wallis, and the infamous, and very wealthy, thanks to Borrego Health, Dr. Alfredo Ratniewski. Wallis was the legal counsel and Ratniewski was the executive director of the BIPA. Both were also drawing salaries from Borrego Health.
The BIPA hung around for a couple of years and was closed down after it served its purpose of collecting free money from BCHF. So, who’s got that money and who’s going to repay Borrego Health? Or, an even bigger question facing this Board is: Who’s going to pay back the state and federal Medicaid and Medicare programs for taxpayers’ money that went to underwrite Hebets’ multiple, get rich health scams.
In 2018, when Hebets retired, and died in January 2019, that Board, under the leadership of Dan Anderson, gifted Hebets $1.9 million, considerably reduced from the $5 million some were recommending. The gift was illegally disclosed to the IRS as Hebets’ salary for working 40 hours a week, even though he died six months into his supposed work schedule. The Sun asked Hansberger about the original payment and the $504,667 additional payment to Hebets in the 2019 IRS disclosure. She couldn’t really explain why the $1.9 million was reported as salary. However, she agreed to look into it.
About the additional funds to Hebets last year, Hansberger explained the Board consulted with experts about payouts and benefit settlements owed to a former CEO, and were told it was proper to pay him, and disclose as “former CEO.” It’s unknown how much the Hebets’ family owes BCHF, given that there were probably more gifts the Hebets’ family accrued, also hidden as expenses in the IRS reports, or never reported, like Premier dental.
Then there’s Dr. Ratniewski, the clever fellow, who found a way to get rich without working. From 2010 to 2013, as Chief Medical Officer, he made $1.4 million. And he was still earning his salary of $669,000, with additional compensation of $21,000, in 2019-2020 earning him another $5.6 million. Basically, he was earning $1.3 million every two years. Ratniewski admits to having a few clients he sees at the El Cajon Clinic. Actually, his elevated income comes from being the beard for all of Hebets’ crimes. No disrespect meant to his daughter, Janet’s talents, but doesn’t she come under the new “No Nepotism Policy?”
One of the lingering questions is why was Ratniewski paid so much for doing so little? Some sources, who have credibility, say that Hebets actually promised Ratniewski $7 million for seven clinics and the salary is Hebets’ way of paying off the debt.
Actually, what is known is that Hebets paid Ratniewski $2.3 million for two medical practice lists. In 2012, they tried to convince the state the lists were the equivalent of a clinic. The state denied the claims, and twice refused to reimburse Borrego Health. Why not sue Ratniewski for that money? He is very sneaky and hard to pin down. Supposedly resigning in 2020, he was secretly kept on the payroll as a consultant, only earning around $400,000 - two-thirds of his salary. So, what’s he doing now, besides hiding his money?
Speaking of recovering money spent by Hebets’ crew, there’s $400,000 paid for property in Borrego Springs owned by a former Borrego Health Trustee. The property was to be the site of a new clinic that never happened. There was also a $2 million loan to a Trustee that was written off.
So much money lost; finding it, let alone recovering, is going to be difficult. Hopefully, the FBI’s forensic people are up to the task.
Getting paid to commit fraud describes the Hebets/ Priest dental scam, earning contract dentists, like Husam Aldairi of El Cajon, $6 million in 2018, and $8 million in 2019, conveniently split between his personal office and his corporation. While other dentists were also earning big dollars in the $4 million range, Aldairi was the high roller. How could gains of 200,000 clients yearly, with such extraordinary amounts of money being disclosed, did no one wonder about all that money piling up in dental appointments. Didn’t anyone besides the Borrego Sun, consider that fraud was happening?
While Trustees under Hebets rubber stamped his budgets and false IRS reports, Anderson’s Board took a mixed bag approach. They supported Wallis, who followed in Hebets footsteps, even throwing an expensive $300,000 coronation party for her. They continued supporting the inflated salaries and benefits for the officers; and, mostly, acknowledged little or nothing about any irregularities. The excuse was that Board Members were not getting the right information from either Anderson or Wallis. In other words, as long as Board members didn’t make the effort to ask questions, push or sue for answers, or read their own IRS report, they could claim innocence.
For some, claiming they didn’t have the history or know about any alleged illegal activities doesn’t ring true. Dan Anderson, for example, served on the Board for more than 10 years. Yet, he doesn’t seem to understand what the term “conflict of interest” means, since his non-profit is renting two buildings to Borrego Health at an inflated market rate.
Anderson did hire a legal firm to check out the issues the Borrego Sun was reporting. Yet, when his own attorneys recommended getting rid of all the officers as complicit, he dismissed the FBI/DOJ raid as, “No big deal; Everything’s fine – just a bunch of bad dentists.” Did he really believe that? The Anderson Board continued to act as if everything was fine with one exception. They fired Wallis as CEO.
And that was big. From that change in leadership, and the raids, the lid to Pandora’s Box was finally being lifted. Unfortunately, Dan Anderson, as chairman of the Board, chose to play down the facts, rather than being honest with the employees, the clinics, and the newspapers. The big trigger for the FBI/DOJ investigation was Premier Healthcare Management Company and the mind-boggling millions of dollars that flowed to Priest and a few doctors. Once the cover was off, there was no more hiding.
How did Dr. Timothy Martinez, Borrego Health’s Chief Dental Officer, liaison between Premier and Borrego Health, not know there was cheating going on right under his nose? An intelligent man with a solid resume, Dr. Martinez probably helped Hebets develop the idea of contract dentistry and the management structure. Martinez has a professional history of advocacy for contract dentistry as a way for dentists to benefit, and reach more of the underserved.
Actually, the one thing Martinez can’t say is that he didn’t know about Aldairi’s illegal activities. Dr. Maura Tuso, a dental endodontist, went to great lengths to alert him and others that Dr. Aldairi was breaking the law.
She knew, because she witnessed it, working in Aldairi’s office. She also taped her conversation with Dr. Martinez in 2019, advising him that Aldairi was using unlicensed foreign nationals to treat patients; the office violated sanitary rules; and that they were violating Borrego Health’s contract agreement of one treatment, per visit, per patient, by loading up treatments and then having the bookkeeper postdate the invoices.
“In every other office I worked in each dentist recorded the date of the treatment, the patient’s name and scope of work. In Aldairi’s office, I was told to leave off the date of the visit and that ‘the bookkeeper would date the invoices.’ It was just one of the many weird and uncomfortable things I encountered working in that office.”
Minor offenses perhaps, but they upset Dr. Tuso; and in her pursuit of exposing illegal activities, she became the victim.
“The Dental Board didn’t seem to care; the San Diego FBI was interested in Aldairi and his wife, but not for dental fraud; the state’s Attorney General, who oversees the Dental Board, wasn’t interested, and neither were any of the state’s DHCS investigators, or officers, like the top guy, Will Lightbourne.
“I finally tracked down Dr. Nithya Venugopal, Borrego Health’s Dental Ethics officer. When I told her my story, she sounded very interested and eager to set up a meeting with Dr. Martinez and me. I thought finally, someone cares,” said Dr. Tuso.
Unfortunately, there was not a meeting, only a phone call with Martinez and another party, believed to be Nickolas Priest, son of Daryl Priest and executive director of Premier.
“I was surprised that Dr. Venugopal was not on the call. When I asked why, Martinez explained that, ‘She has nothing to do with this anymore. I am handling this from now on.’”
When Dr. Tuso attempted to follow up on the meeting, she discovered she had been blocked from Dr. Venugopal’s phone, and told by the administrative assistant, “Not to ever call her again.” Not sure what she had done, Dr. Tuso asked, “Why,” and the assistant replied, “They don’t want a paper trail.”
Martinez was warned in early 2019 about Aldairi, and did nothing for the two years prior to the FBI raids. While millions of dollars flowed into the hands of unscrupulous dentists, Martinez was trying to stop Dr. Tuso from exposing Aldairi’s behavior, according to her account of events. She was fired from working in another dental office in Escondido that also had a contract with Borrego Health, when Dr. Martinez paid an unusual visit to the Dental Offices’ female owner early one morning.
“I was fired that afternoon. I couldn’t get an explanation and was desperate to understand how I had gone from being told, ‘I was the best;’ ‘loved;’ and, ‘one of the family;’ to being fired on the same day. My former boss would not speak with me, and the receptionist’s only explanation was the unusual meeting of my boss with Dr. Martinez.”
That was only the beginning of the retaliation aimed at Dr. Tuso. The Dental Board threatened to revoke her license. One of the witnesses at the hearing before the Dental Board in support of revoking Dr. Tuso’s license was none other than Rawaa Aldairi, wife of Husam and office bookkeeper. The wife, mockingly, according to Dr. Tuso, called her “delusional and “psychotic about Borrego Health.”
The reasons given for revoking her license was that Dr. Tuso was “unethical and mentally ill” and must pass a mental health evaluation to practice dentistry. She’s still trying to exonerate herself so she can go back to work after two years. Dr. Tuso is also unable to figure out how her license was pulled without one complaint from a patient, and despite letters attesting to her professional attributes and integrity from other dentists.
One answer comes to her mind. Dr. Timothy Martinez is president of the California Dental Hygiene Board, a sister to the governor-appointed Dental Board with powers to license and revoke hygienists’ licenses. The Dental Board has the same power to license and revoke dentists’ licenses. Although this prestigious appointment is not mentioned in any of Borrego Health’s bios of Martinez, and the state’s Dental Hygiene website mentions all of his back ground until 2012, but never discloses he is employed by Borrego Health.
Those are big omissions. Makes one wonder. Perhaps, Martinez used his relationships with his peers on the Dental Board to revoke Dr. Tuso’s license, and, maybe, had intervened to protect other BCHF employees.
Dr Martinez’s defenders say that there was nothing he could do; given the situation he was in, working under Hebets and Wallis, who needed to protect the Premiere Contract. Evidently, he came to the Board of Trustees, after Wallis resigned, and admitted that there was fraud and he was prepared to share the facts. This, before the FBI raid. He also supposedly offered to share everything he knew with the FBI.
Dr. Martinez’s detractors say, “He protected Dr. Aldairi, ruined Dr. Tuso, and is a coward, at best, covering his backside with the new CEO and Board. He had options. If the fraud was really disturbing him, he could have become a protected whistleblower, or resign to save his integrity. Others took the risk, quit the great salaries, and told their stories to the Attorney General and the Borrego Sun.”
The ever-unfolding story of Borrego Health is chilling and cautionary. Like the old parable, it shows how easy it is for bad men or women to prevail, if good men or women do nothing.