Hepatits C Lawsuit Seeks $16.5 Million from Bankrupt Doctor’s Family

A hepatitis C lawsuit is seeking $16.5 million from a bankrupt doctor’s family. Dipak Desai is facing a murder charge over a hepatitis C scare that made headlines four years ago in Nevada.

As we’ve written, the outbreak, which likely infected as many as 115 clinic patients with hepatitis C, was the result of unsafe injection practices. Now, Desai’s wife and daughters are being taken to court by his estate’s bankruptcy trustee, William A. Leonard Jr., said The Vegas Sun. Desai hid nearly $16.5 million from creditors.

Leonard, Jr. filed two complaints in U.S. Bankruptcy Court against Desai’s wife and daughters and, in one of the complaints, states that by 2005, the disgraced physician transferred just about all of his property–$12.5 million—through trusts to his three daughters—Amishi and Anjali Desai and Avani Bhambri—to ensure the money was sheltered from creditors, said The Vegas Sun.

The other lawsuit alleges that in 2009, Desai’s wife, Dr. Jusu, Desai, moved $3.5 million from her husband’s Gastroenterology Center pension plan into a money purchase plan under her business, Kusum Desai, M.D. Chartered, “for the purpose of protecting her assets from existing and potential creditors,” according to The Vegas Sun. The lawsuit also states that the $3.5 million represents community property and may be used in bankruptcy actions against Desai and his company and also alleges that the money purchase plan does not meet federal Employee Retirement Income Security Act mandates and is, therefore, not protected from the Chapter 7 bankruptcy proceedings. The lawsuit also seeks Kusum Desai’s assets, which are valued at $458,000 in two IRA plans and in a profit-sharing plan, said The Vegas Sun.

As we’ve said, the hepatitis C outbreak was linked to the Endoscopy Center of Southern Nevada and its sister clinic, Desert Shadow Endoscopy Center, and could have been prevented. First detected in late 2007, the outbreak led to at least 50,000 former Endoscopy Center patients and 13,000 former Desert Shadow Center patients being notified to receive testing for hepatitis B, C, and HIV. Two of Desai’s staff were accused of spreading the hepatitis C virus through unhygienic practices, said The Vegas Sun.

In July 2009, both endoscopy centers and the Gastroenterology Center of Nevada filed for Chapter 7 bankruptcy liquidation. To further protect himself, during U.S. Bankruptcy Court proceedings in June, Dipak Desai asserted his Fifth Amendment rights against self-incrimination and refused to testify. Desai and two of his former nurses—Keith Mathahs and Ronald Lakeman—all pleaded not guilty to second-degree murder charges associated with Rodolfo Meana’s death. The Vegas Sun explained that Meana, 77, was a patient who contracted hepatitis C at Desai’s clinic and who died earlier this year over issues believed to be related to the infection.

A status check hearing was recently scheduled by Judge Stefany Miley and Desai and his nurses are scheduled to stand trial next month on 28 felony charges, including neglect of patients, insurance fraud, and racketeering, said The Vegas Sun.

We previously wrote that Desai surrendered his license to practice medicine during health district and police investigations and that he and other former clinic owners were facing over 120 lawsuits alleging medical negligence, as well as a separate class-action suit initiated by patients who did not fall ill but are claiming emotional distress. The outbreak was the largest health-care-related hepatitis C outbreak in U.S. history, and could cost as much as $21 million in investigative and medical expenses. The Health District’s report said more than 9% the county’s households had a member who could have been exposed; more than 14% of the county’s residents ages 65-69 were at risk.

Through interviews and observations, investigators identified a combination of unsafe injection practices at the clinics, including reusing syringes on a single patient and reusing vials of anesthetic between patients. Some nurse anesthetists told investigators they were instructed to use the unsafe practices. While they could not definitely tie these practices to the infections, they ruled out all other possible sources of hepatitis C.

After announcing the outbreak and patient notification in February 2008, health officials set up a hot line that took 35,391 calls through the end of October 2008. At one point the line took 510 calls in one hour.

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