Chaudhuri & Cutler: a Crook & a Cheat

Bankrupted the physician practice management company (KPC Global Care) and left 300,000 patients without medical records. 2,500 employees and physicians were left without jobs. Several serious patient care concerns were raised, in 2000.

Whereas the management company went bankrupt, Chaudhuri siphoned off monies through real-estate holdings and off shore reinsurance companies.

Bankrupted a pharmacy company, Southern California Pharmacy, in 2000.

Used his ownership in Hemet Community Medical Group, an IPA, to borrow $ 3 million from Valley Healthcare System, a healthcare district to fund his private acquisition as part of shared risk pool (Jeff Lang, CEO of the hospital was gone).

Chaudhuri through a complex scheme became part owner of Integrated Healthcare Holdings, Inc. (IHHI) that operates four hospitals in Orange County; Chapman Medical Center, Coastal Communities Hospital, Western Medical Center – Anaheim and Western Medical Center – Santa Ana. 49% of the real estate is owned by Chaudhuri, Ganesha Realty, LLC. Whereas he was prevented from managing the hospitals by the State, he recently exercised the option to acquire 39.7 million shares of IHHI along with his attorney William Thomas and joint Bruce Mogul and Larry Anderson to take over the control of the Board. The Court appointed a retired judge to the Board. Judge Lewis said the future of IHHI’s hospitals was “too important to allow Dr. Chaudhuri any potential involvement with the running of this company.”

Chaudhuri orchestrated the Valley Health System’s Board to sell the three district hospitals to Select Healthcare that has no track record of operating hospitals. Board of Directors, Darren Magness is Chaudhuri’s henchman and Dr. William Cherry is a full time employee of Dr. Chaudhuri’s related company. Most of the supporting physicians receive substantial payouts from the affiliated HCMG in addition to being aspiring to be owners along with Chaudhuri in Select i.e., Drs. Nakka, Rastogi, Tiwari, Mathias, etc.

Chaudhuri has a management contract with the hospital district since 1998 with an annual fees of $ 9 million per annum. The operations have steadily deteriorated with an estimated $ 12 million in losses for fiscal year 2006 alone. Chaudhuri and his affiliated physicians that manage the operations to date now want to be owners.

The not for profit board can hire an able management company. If Select can borrow money, the District could borrow the same and improve the operations. After all, it is the same area and the same hospitals. Nothing is changing by Select with no hospital management experience and the same doctors that failed the system in the first place claiming to resurrect the operations.

Select has no track record of either owning or managing hospitals. Mat Cutler the infamous representative of Select operates out of his car and on a small residence (maybe an apartment) out of Del Mar. He cheated several physicians out of their investment in Perris Valley Hospital and bankrupted the place. There are no positive accomplishments that anybody could site of Mr. Cutler.

The Board needs to take the responsibility or failure and should resign. The Attorney Generals Office should step in and monitor the process whether sale or refinancing. A credible investment banker should be hired to recommend to the lay board. The best options in turning around the operations of the healthcare district.

Chaudhuri is simply a crook, that too a failed one. Mat Cutler of Select is a low level cheat (Chaudhuri and Cutler, a crook and a cheat).


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