Former Tulare hospital manager accused of stealing $3 million

VISALIA, Calif. (KFSN) -- A hearing this week will determine whether nearly $1 million legally belongs to the former manager of Tulare Regional Medical Center.

In 2017, the hospital closed, filed for bankruptcy, and parted ways with Healthcare Conglomerate Associates (HCCA) and its CEO Dr. Benny Benzeevi.

The hospital has since reopened, but Benzeevi and his company are still under criminal investigation.

The Tulare County District Attorney's Office has called their criminal investigation into HCCA the largest in the department's history.

A Tulare County judge only allowed still pictures while court was not in session Tuesday.

On one side of the courtroom, you can see attorneys for Dr. Benny Benzeevi.

On the other side, you can see an attorney and investigator with the Tulare County District Attorney's Office.

Not seen is hospital board president Kevin Northcraft, who was called to testify in the hearing.

"I've got 19 hours invested in this and I'm not a party to the suit, so it is a little bit frustrating," Northcraft said about testifying. "But in the interest of justice, I'm contributing my time."

Northcraft didn't want to talk about why he was called to testify in the hearing, which relates to Dr. Benzeevi's request to return money that was taken from him.

Last August, the DA's office served a search warrant, seizing more than $900,000 from Benzeevi's JP Morgan Chase Bank account, alleging he stole it.

The DA's office has yet to file criminal charges against Benzeevi, but court documents filed earlier this month by a company called MB Financial Bank reveal more about the allegations against him.

MB claims it was a victim of Benzeevi's criminal acts, saying he stole $3 million from the company through a sale and leaseback transaction completed in August of 2017.

In October of 2018, MB says it was notified by the DA' office of the $900,000 seizure.

"Those stolen funds amount to stolen and/or otherwise misappropriated monies directly traceable to underlying transactions between Benzeevi and MB, wherein Benzeevi defrauded MB," a court document states.

But Benzeevi's attorneys argue the seized money should be returned to their client.

"...(The) state withheld the relevant contents of the Master Services Agreement ("MSA") and Resolution 852 from the Court when applying for the search warrant," another court document states. "Critically, these two documents are official enactments of the Tulare Local Healthcare District ("the District") and they expressly authorized the acts that the state now portrays as embezzlement."

This hearing is expected to go through the rest of the week.