Wednesday, March 11, 2015

California Department of Justice Investigates Berkeley Health Center, Searches Clinic for Financial Records

By Sam Levin
Wed, Mar 11, 2015 at 2:20 PM

click to enlarge Medical records left behind at the Berkeley Health Clinic last month. - SAM LEVIN / FILE PHOTO
  • sam levin / file photo
  • Medical records left behind at the Berkeley Health Clinic last month.
In February, the Berkeley Health Center, a clinic that provided medical services to low-income patients, closed down in the wake of serious financial troubles, including allegations that it had mismanaged public funds. A federal judge forced the clinic out of its site at 2908 Ellsworth Street in South Berkeley after the nonprofit healthcare organization that ran the clinic, the Bay Area Consortium for Quality Health Care, filed for bankruptcy and was unable to pay its massive debts. Directors of the clinic vacated the property, but left behind thousands of confidential medical records in the building, which I photographed when I visited the shuttered clinic a day after federal marshals enforced the center's eviction. 

Now, it appears that the California Department of Justice is investigating the Berkeley Health Center and the Bay Area Consortium for Quality Health Care. A nearby resident tipped me off that state DOJ officials showed up this morning and have been searching the premises of the clinic. I subsequently obtained a copy of a search warrant signed by an Alameda County Superior Court judge authorizing the DOJ to search the property and seize a wide range of records. 

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The warrant state that there is probable cause to believe the property was "used as the means of committing a felony ... or that a particular person has committed a felony." The warrant goes on to authorize the seizure of "all records and documents" from January 1, 2011 to January 1, 2014 related to the Bay Area Consortium, the Berkeley Health Center, the consortium's executive director Gwendolyn Rowe-Lee Sykes, and any employees.

The warrant authorizes the seizure of a wide range of documents and mentions a number of financial records, seemingly with a focus on the organization's billing documents for patients covered by Medi-Cal, the state health insurance program for low-income people. The warrant specifically mentions records pertaining to denied claims for Medi-Cal patients and highlights those involved in the Medi-Cal AIDS Waiver Program. (The Berkeley Health Clinic had specialized in HIV and AIDS services). It's unclear what potential felony offense officials may be investigating, but the search warrant appears focused on financial documents, though mentions many other records as well. 


Berkeley Health Clinic last month before its closure. - BERT JOHNSON / FILE PHOTO
  • bert johnson / file photo
  • Berkeley Health Clinic last month before its closure.

In my print story last month, "The Collapse of Berkeley Health Center," I noted that the consortium had lost a number of government contracts over the years after state and county health officials repeatedly expressed concerns about how the nonprofit has accounted for its spending of public dollars. One state audit concluded that the organization had failed to document $206,206 in expenses of funds from a federal AIDS grant and said that the organization had impeded the audit by restricting access to its records. 

The warrant today also authorizes the seizure of appointment books, calendars, binders, notes, financial memos, personnel records, payroll documents, employment tax reports, bank statements, canceled checks, auditor reports, and many other internal documents. The warrant further calls for any "evidence tending to show the identity of the person or persons in control of the premises," and any medical records, including exam results, x-rays, records of procedures and appointments, and other patient files. Investigators are also authorized to search digital records and computer files, according to the warrant. 

A spokesperson for the state DOJ declined to comment citing an ongoing investigation. Sykes, who has repeatedly declined to comment for my past stories, has not yet returned a phone message I left for her today. Reached by phone this afternoon, Peter Hadiaris, attorney representing the consortium in the bankruptcy case, told me that my call was the first he had heard about a DOJ search warrant.

When I reported on the center leaving medical records behind last month, I noted that the organization had not warned patients or even its own workers about its closure and had failed to update its website or phone message. At least eight patients showed up on the day I visited only to find that the clinic had been evicted. Nearly a month later, it appears that the consortium has still failed to inform patients of its shutdown. As of today, its website still lists the Berkeley Health Clinic address, and a call to the clinic leads to a voicemail that makes no mention of the closure and says patients can leave a message if they have a question about an appointment. Consortium representatives had told me last month that the organization was searching for a new location, but Hadiaris told me today he had no information about that. 


Medical records room after the clinic closed last month. - SAM LEVIN / FILE PHOTO
  • sam levin / file photo
  • Medical records room after the clinic closed last month.

Hab Siam, a representative for the landlord of the Berkeley Health Center property, SLG 2908 Ellsworth LLC, told me  today that three patients arrived this morning for appointments — only to find DOJ officials searching the property. A sign on the door of the clinic now reads, "Search warrant execution in progress. Authorized entry only. Anyone entering this location is subject to search." 

Asked about the search, Siam said: "The landlord has fully complied with all of its legal obligations under the search warrant and will continue to do so." 

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