The Fall of Universal Healthcare Amid Illegal Kickbacks and Extravagant Spending
Extravagant spending and criminal conduct may have led to the demise of Universal Health Care, a once-thriving St. Petersburg Medicare insurer. At one point Universal Healthcare was a $1.5 billion health care company with more than 140,000 members in 23 states. That success, however, was largely an illusion.
It has been alleged by a bankruptcy trustee that Dr. Akshay “Doc” Desai, founder of the company, received kickbacks from various vendors seeking to do business with the Medicare insurer. A major bank, BankUnited, has alleged that Desai had an insider stake in a Indus BPO Services, an Indian outsourcing company that collected millions from an affiliate of Universal Healthcare for handling claims and other back-office services.
Months ago, the court official charged with liquidating Universal's assets and paying creditors hired a top Miami law firm to coordinate with prosecutors in connection with any criminal related matters that took place at Universal Health Care.
Universal's parent company filed for bankruptcy on February 6th and their finances have been under intense scrutiny since then. Federal agents seized several boxes of documents from the company's downtown headquarters.
During a U.S. Bankruptcy court hearing in Tampa last week, former general counsel Sandip Patel, chief strategy officer Deepak Desai, and former marketing director Jeff Ludy all confirmed that they are currently the subjects of an ongoing criminal investigation by the U.S. Attorney's office.
Denise Barnett of the U.S. Trustee's office described the kickbacks with Desai, Jeff Lundy Universal's sales and marketing chief, and Sandip Patel, the former chief counsel. Allegedly, these individuals would reach out to vendors and inform them that if they desire to do business with Universal, they would have to appoint these individuals as board members or provide them with stock options. Barnett says she has copies of the agreements, which were not between Universal and those vendors. They were with those vendors and the particular officers personally.
Patel, Ludy, and Desai are currently seeking permission to pursue legal action against two insurance companies that were supposed to pay attorney's fees and claims arising from their tenure as Universal officers. It is alleged that the companies refused to pay.
Even as Universal spiraled towards a collapse, Desai and the leaders of Universal Healthcare continued to live lavishly at the company's expense. Top executives drove BMWs and joined dozens of other employees on a company funded Mediterranean cruise. It wasn't the only cruise either. Invitees included favored employees dubbed FOD's: Friends of “Doc”.
Amidst a growing congressional concern that payoffs such as these could influence decisions and result in inappropriate or poor quality health care, a law was passed in 1997 which prohibited anyone from accepting payments for “referring, recommending, or arranging” for the purchase of items being paid for be federally funded programs. As a company annually receiving millions of federal Medicare dollars, Universal would have certainly been bound by anti-kickback legislation.
Desai was once named by President Bush to his Advisory Commission on Asian Americans and Pacific Islanders. Governor Jeb Bush appointed him to the Board of Governors overseeing Florida's University System. Years later, the man and his billion dollar company have collapsed amidst serious accusations of illegal business transactions as well as the very real threat of facing criminal prosecution.