Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5084 Page 1 of 789
`
`JOSEPH R. LAMAGNA (State Bar No. 246850)
`JORDAN KEARNEY (State Bar No. 305483)
`HOOPER, LUNDY & BOOKMAN, P.C.
`101 W. Broadway, Suite 1200
`San Diego, California 92101
`Telephone: (619) 744-7300
`Facsimile: (619) 230-0987
`E-Mail: jlamagna@health-law.com
` jkearney@health-law.com
`DEVIN M. SENELICK (State Bar No. 221478)
`TARYN A. REID (State Bar No. 328772)
`HOOPER, LUNDY & BOOKMAN, P.C.
`1875 Century Park East, Suite 1600
`Los Angeles, California 90067
`Telephone: (310) 551-8111
`Facsimile: (310) 551-8181
`E-Mail: dsenelick@health-law.com
` treid@health-law.com
`Attorneys for Plaintiff Borrego
`Community Health Foundation
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
` Case No. 3:22-cv-01056-L-SBC
`Hon. M. James Lorenz
`
`SECOND AMENDED COMPLAINT
`
`Trial Date:
`
`None Set
`
`BORREGO COMMUNITY HEALTH
`FOUNDATION, a California nonprofit
`public benefit corporation;
`Plaintiff,
`
`vs.
`KAREN HEBETS, an individual;
`MIKIA WALLIS, an individual;
`DIANA THOMPSON, f/k/a DIANA
`TRONCOSO, an individual;
`HARRY ILSLEY, an individual;
`DENNIS NOURSE, an individual;
`MIKE HICKOK, an individual;
`CHUCK KIMBALL, an individual;
`PREMIER HEALTHCARE
`MANAGEMENT, INC., a California
`Corporation; SUMMIT HEALTHCARE
`MANAGEMENT, INC., a California
`Corporation; DARYL PRIEST, an
`individual; NICHOLAS PRIEST, an
`individual; TRAVIS LYON, an
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5085 Page 2 of 789
`
`individual; HUSAM E. ALDAIRI,
`D.D.S., an individual; ALDAIRI DDS,
`INC., a California corporation; AYED
`HAWATMEH, D.D.S., an individual;
`HAWATMEH DENTAL GROUP, P.C.,
`a California Corporation; ALBORZ
`MEHDIZADEH, D.D.S., an individual;
`ALBORZ MEHDIZADEH, INC., a
`California Corporation; JILBERT
`BAKRAMIAN, D.D.S., an individual;
`MOHAMMED ALTEKREETI, D.D.S.,
`an individual; MAGALY VELASQUEZ,
`D.D.S., an individual; MAGALY M.
`VELASQUEZ DDS PROFESSIONAL
`DENTAL CORP., a California
`Corporation; ARAM ARAKELYAN,
`D.D.S., an individual; NEW
`MILLENNIUM DENTAL GROUP OF
`ARAM ARAKELYAN, INC., a
`California Corporation; MICHAEL
`HOANG, D.M.D., an individual;
`WALEED STEPHAN, D.D.S., an
`individual; W.A. STEPHAN, A
`DENTAL CORPORATION,
`a California Corporation; SANTIAGO
`ROJO, D.D.S., an individual;
`SANTIAGO A. ROJO, D.D.S., INC., a
`California Corporation; MARCELO
`TOLEDO, D.D.S., an individual;
`MARCELO TOLEDO, D.D.S., INC., a
`California corporation; MARLENE
`THOMPSON, D.D.S., an individual;
`MARLENE THOMPSON, D.D.S., INC.,
`a California Corporation; DOUGLAS
`NESS, D.D.S., an individual; NESS
`DENTAL CORPORATION, a California
`Corporation; JAMES HEBETS, an
`individual; THE HEBETS COMPANY, a
`Missouri Corporation; KBH
`HEALTHCARE CONSULTING, LLC;
`and DOES 1-250, inclusive.
`Defendants.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5086 Page 3 of 789
`
`TABLE OF CONTENTS
`
`Page
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`IV.
`V.
`
`INTRODUCTION/SUMMARY ....................................................................... 8
`I.
`JURISDICTION AND VENUE ........................................................................ 9
`II.
`III. CAST OF CHARACTERS ............................................................................. 10
`A.
`BORREGO COMMUNITY HEALTH FOUNDATION ..................... 10
`B.
`FORMER BORREGO INSIDERS ....................................................... 11
`C.
`PREMIER, PRIESTS AND OTHER PRIEST-RELATED
`ENTITIES ............................................................................................. 13
`DEFENDANT DENTISTS ................................................................... 14
`D.
`JAMES HEBETS AND HIS COMPANIES ........................................ 17
`E.
`OTHERS ............................................................................................... 18
`F.
`ALTER EGO AND DOE ALLEGATIONS ......................................... 19
`G.
`PLEADING REQUIREMENTS ..................................................................... 28
`THE SCHEMES THAT DAMAGED BORREGO HEALTH ....................... 32
`A.
`The Scheme to Form and Sell Entities to Borrego Health (the
`“Borrego MSO/IPA Scheme”) .............................................................. 32
`The Scheme to Contract with Premier Allowing Premier to Get
`Paid Tens of Millions of Dollars to Purportedly Provide
`“Management Services” It Was Not Capable of Providing (the
`“Premier Scheme”) ............................................................................... 34
`i.
`The Contract Dental Program is Formed .................................... 34
`ii.
`Hebets Proposes an MSO Idea, Which Is Rejected by
`Borrego Health ............................................................................ 35
`The Borrego Health Insiders Enter Into a Management
`Services Agreement on Borrego Health’s Behalf Anyway ........ 38
`The Damages Suffered by Borrego Health Due to the
`Premier Scheme .......................................................................... 53
`Certain Contract Dentists Submitted Fraudulent Bills with the
`Knowledge and Support of Premier, Daryl Priest, Nick Priest and
`Travis Lyon and Karen Hebets, Mikia Wallis, Diana Thompson,
`Harry Ilsley, Dennis Nourse, Mike Hickok, and Chuck Kimball
`(the “Fraudulent Dental Billing Scheme”) ............................................ 56
`i.
`Husam E. Aldairi, D.D.S. ........................................................... 62
`
`B.
`
`C.
`
`iii.
`
`iv.
`
`7496429.4
`
`3
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5087 Page 4 of 789
`
`TABLE OF CONTENTS
`
`Page
`
`Ayed Hawatmeh, D.D.S. ............................................................ 69
`ii.
`Alborz Mehdizadeh, D.D.S. ....................................................... 74
`iii.
`iv. Magaly M. Velasquez, D.D.S. .................................................... 78
`v.
`Aram Arakelyan, D.D.S. ............................................................. 81
`vi. Michael Hoang, D.M.D. ............................................................. 85
`vii. Waleed Stephan, D.D.S. ............................................................. 86
`viii. Santiago Rojo, D.D.S. ................................................................. 88
`ix. Mohammed Al Tekreeti, D.D.S. ................................................. 90
`x.
`Jilbert Bakramian, D.D.S. ........................................................... 92
`xi. Marcelo Toledo, D.D.S. .............................................................. 94
`xii. Marlene Thompson, D.D.S. ........................................................ 97
`xiii. Douglas Ness, D.D.S. ............................................................... 100
`Since Premier Was Unable and Unwilling To, a Program
`Integrity Process is Implemented by Borrego Health ......................... 103
`Premier, Daryl Priest, Nick Priest and Travis Lyon and Karen
`Hebets, Mikia Wallis, Diana Thompson, Harry Ilsley, Dennis
`Nourse, Mike Hickok, and Chuck Kimball Coverup Fraudulent
`Billing (the “Coverup Scheme”) ......................................................... 107
`Karen Hebets, Mikia Wallis, Diana Thompson, Harry Ilsley,
`Dennis Nourse, Mike Hickok, and Chuck Kimball Entered into
`Leases with Daryl Priest-Owed Entities for Above Market Rents
`and Terms Many Times the Market Amount (the “Priest Leases
`Scheme”) ............................................................................................. 116
`Karen Hebets, Mikia Wallis, Diana Thompson, Harry Ilsley,
`Dennis Nourse, Mike Hickok, and Chuck Kimball Paid Above-
`Market Compensation and Granted Themselves Improper
`Benefits and Covered It Up (the “Compensation/Benefits
`Scheme”) ............................................................................................. 126
`Karen Hebets, Mikia Wallis and Diana Thompson Used
`Nepotism and Cronyism to Funnel Money to their Friends and
`Family (the “Nepotism and Cronyism Scheme”) ............................... 130
`
`D.
`
`E.
`
`F.
`
`G.
`
`H.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`4
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5088 Page 5 of 789
`
`TABLE OF CONTENTS
`
`Page
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`I.
`
`J.
`
`K.
`
`Mikia Wallis, Diana Thompson, Harry Ilsley, Dennis Nourse,
`Mike Hickok, and Chuck Kimball Tried To Purchase a Country
`Club to Personally Benefit Themselves (the “De Anza Country
`Club Scheme”) .................................................................................... 131
`Karen Hebets, Mikia Wallis, Diana Thompson, Harry Ilsley,
`Dennis Nourse, Mike Hickok, and Chuck Kimball Attempted to
`Pay Bruce Hebets a $5 Million Payout (the “Payout Scheme”) ......... 134
`Karen Hebets, Mikia Wallis and Diana Thompson Funneled
`Money to Bruce Hebets’ Brother, Jim Hebets, and Jim Hebets’
`Firm (the “Jim Hebets Scheme“) ........................................................ 138
`Borrego Board Member Chuck Kimball Leased a Barn to
`Borrego Health (the “Julian Barn Scheme”) ....................................... 142
`Borrego Insider Dennis Nourse Sold Property to Borrego Health
`to be Developed by Priest (the “Property Development Scheme”) .... 145
`Bruce Hebets and Karen Hebets Create a Sham “Consulting”
`Company and Contract with Premier To Obtain Payments From
`Premier for the Various Schemes Which Benefited Premier,
`Summit, Daryl Priest, Nick Priest and Travis Lyon (the “KBH
`Healthcare Consulting Scheme”) ........................................................ 148
`VI. CLEANING HOUSE .................................................................................... 152
`VII. CHAPTER 11 BANKRUPTCY .................................................................... 152
`VIII. THE RICO ENTERPRISE ............................................................................ 153
`B.
`Facts Common To RICO Cause of Action ......................................... 156
`C.
`Racketeering Activity Distinct from Enterprise ................................. 158
`D.
`RICO Liability .................................................................................... 159
`E.
`Issuance of Constructive Trusts .......................................................... 165
`SPECIFIC ALLEGATIONS AGAINST DEFENDANTS ........................... 165
`A.
`Defendant Karen Hebets ..................................................................... 166
`B.
`Defendant KBH Healthcare Consulting, LLC .................................... 169
`C.
`Defendant Mikia Wallis, Esq. ............................................................. 169
`D.
`Defendant Diana Thompson, formerly Diana Troncoso .................... 175
`E.
`Defendant Harry Ilsley ........................................................................ 178
`
`L.
`
`M.
`
`N.
`
`IX.
`
`7496429.4
`
`5
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5089 Page 6 of 789
`
`TABLE OF CONTENTS
`
`Page
`
`Defendant Dennis Nourse ................................................................... 181
`F.
`Defendant Mike Hickok ...................................................................... 185
`G.
`Defendant Chuck Kimball .................................................................. 188
`H.
`Defendant Premier Healthcare Management, Inc. .............................. 192
`I.
`Defendant Summit Healthcare Management, Inc. .............................. 196
`J.
`Defendant Daryl Priest ........................................................................ 197
`K.
`Defendant Nicholas (“Nick”) Priest, Esq. .......................................... 202
`L.
`M. Defendant Travis Lyon ....................................................................... 206
`N.
`Defendant James “Jim” Hebets ........................................................... 211
`O.
`Defendant The Hebets Company ........................................................ 211
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`6
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5090 Page 7 of 789
`
`B
`
`C
`
`APPENDIX OF EXHIBITS
`DESCRIPTION
`EXHIBIT PAGES
`275-284 PHCM Management Agreement dated (Effective Date
`A
`“ED” 3/1/16)
`285-287 PHCM Amendment No. 1 to Management Agreement
`(ED 12/22/16)
`288-290 PHCM Amendment No. 2 to Management Agreement
`(ED 7/1/17)
`291-307 Summit Healthcare Management Contract (ED 9/8/17)
`308-336 Aldairi Agreement (ED 5/27/16)
`337-367 Aldairi DDS, Inc. Agreement (ED 5/29/18)
`368-395 Hawatmeh Dental Group Agreement (ED 10/18/17)
`396-424 Alborz Mehdizadeh, Inc. Agreement (ED 9/28/16)
`425-458 Long Beach Care Dental, Inc. Agreement (ED 12/11/18)
`459-487 Velasquez Agreement (ED 11/5/14)
`488-515 Arakelyan Agreement (ED 11/17/16)
`516-546 Arakelyan DDS. Inc. Agreement (ED 11/29/18)
`547-609 Arakelyan DDS. Inc. Agreements (ED 11/29/18)
`610-640 Hoang Agreement (ED 11/28/18)
`641-669 W.A Stephan Agreement (ED 10/1/16)
`670-697 Rojo D.D.S., Inc. Agreement (ED 3/29/17)
`698-729 Toledo D.D.S., Inc. Agreement (ED 6/16/15)
`730-760 Thompson, D.D.S., Inc. Agreement (ED 4/18/13)
`761-789 Ness Dental Agreement (ED 5/2/16)
`
`D
`E
`F
`G
`H
`I
`J
`K
`L
`M
`N
`O
`P
`Q
`R
`S
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`7
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5091 Page 8 of 789
`
`Plaintiff Borrego Community Health Foundation (“Borrego Health”)1, hereby
`complains and alleges as follows:
`I.
`INTRODUCTION/SUMMARY
`1.
`Borrego Health was a California nonprofit public benefit corporation
`operating a Federally Qualified Health Center (also known as a FQHC). Borrego
`Health provided primary and related healthcare services to historically underserved
`areas of San Diego, Riverside, and San Bernadino counties.
`2. While Borrego Health was attempting to complete its mission of
`providing healthcare to underserved communities, certain individuals and entities,
`both inside and outside of Borrego Health, siphoned off money from Borrego Health
`that should have benefitted to the community it serves. The schemes of those
`various individuals and entities are set forth in detail below. The schemes include
`selling useless assets to Borrego Health at inflated prices, entering into one-sided
`agreements with Borrego Health to its detriment, committing and/or covering up
`healthcare fraud though improper billing of dental services, entering into leases with
`Borrego Health that were many times fair market rates and terms, paying themselves
`above-market salaries and benefits, hiring friends and family members to work for
`Borrego Health and paying them above-market salaries, and attempting to use
`Borrego Health to purchase a country club. Those same individuals and entities
`worked tirelessly to cover up their misdeeds, and, until recently, were successful is
`doing so.
`The insiders were motivated by various forms of personal benefit.
`3.
`First, they used the excessive revenue generated by the schemes to set over-market
`
`1 As outlined below, on February 14, 2024, Borrego Health’s plan in the bankruptcy
`court became effective. As a result of the plan, the BCHF Liquidating Trustee is
`now assigned Plaintiff’s rights to this litigation. Should the Court deem appropriate,
`we request this Court approve amendment of the Plaintiff to the “BCHF Liquidating
`Trust” pursuant to Federal Rules of Civil Procedure Rule 25(c).
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`8
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5092 Page 9 of 789
`
`salaries for themselves and create other forms of compensation, such as automotive
`benefits, retirement benefits, and free healthcare goods and services from Borrego
`Health. Second, they used the excessive services and attendant revenue from Medi-
`Cal to justify employing friends and family members at Borrego Health, also at
`inflated salaries. Third, on information and belief, the insiders allowed the outsiders
`to participate in the fleecing of Borrego Health in exchange for kickbacks and/or
`other benefits to the insiders. For instance, Bruce Hebets and Karen Hebets set up a
`sham “consulting” company which entered into a sham agreement which paid them
`$2 million of funds that had been previously stolen from Borrego Health. Each and
`every one of the Defendants received one or more improper benefits and/or
`payments as a result of the schemes described below, and were incentivized to act in
`furtherance of those schemes, actively sought to conceal those schemes and/or
`breached their duties to prevent or stop those schemes.
`4.
`The false and fraudulent billing of dental services resulted in Borrego
`Health’s suspension by California’s Medicaid Program, Medi-Cal. The schemes
`perpetrated by the Defendants also resulted in state and federal government
`investigating Borrego Health for tax issues audits non-profit status, among many
`other things.
`5.
`Borrego Health has been severely damaged and this action seeks to
`illuminate the various schemes, seeks financial compensation to recoup funds
`wrongly siphoned away from Borrego Health, and to hold the wrongdoers
`responsible for their actions.
`II.
`JURISDICTION AND VENUE
`6.
`Jurisdiction is proper pursuant to 28 USC section 1331.
`7.
`Venue is proper in this District pursuant to 31 USC section 3732(a) and
`28 USC section 1391(c). During the relevant time period, a substantial portion of
`the events complained of that give rise to Borrego Health’s claims occurred in this
`District.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`9
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5093 Page 10 of 789
`
`III. CAST OF CHARACTERS
`A.
`BORREGO COMMUNITY HEALTH FOUNDATION
`8.
`Plaintiff Borrego Community Health Foundation (“Borrego Health”),
`was a nonprofit 501(c)(3) Federally Qualified Health Center (“FQHC”). Borrego
`Health provided high quality, comprehensive, compassionate primary health care to
`the people in their communities, regardless of their ability to pay, by partnering with
`licensed medical professionals across Southern California. Borrego Health operated
`33 clinics, primarily in underserved desert and inland communities throughout San
`Diego, Riverside, and San Bernardino counties. Borrego Health provided essential
`services in Family Practice, Pediatrics, OB/GYN, Internal Medicine, Podiatry,
`Dermatology, Cardiology, HIV/Hepatitis C and Covid-19 related testing and
`vaccinations to over 200,000 patients, most of whom could not obtain affordable
`comprehensive primary care from other sources. During the recent pandemic,
`Borrego Health tested tens of thousands of Californians for Covid-19 infections, and
`vaccinated tens of thousands of people against Covid-19. Borrego Health’s
`operation was in the public interest and, despite the harm it suffered and the way it
`was manipulated by its former executives and trustees, it continued to deliver
`quality health care to people who needed it.
`9.
`Much of the services Borrego Health provided to the community were
`funded by grants, including without limitation grants from the U.S. Health
`Resources and Services Administration (“HRSA”). Borrego Health received its first
`HRSA grant in 2003.
`10.
`Following the initial HRSA grant in 2003, Borrego Health experienced
`massive growth, expanding its services to what they are today, inclusive of dental,
`mental health and chiropractic services. The majority of these services are provided
`through Borrego Health’s internal programs, including brick-and-mortar medical
`and dental clinics and mobile units. Borrego Health also operated a contract
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`10
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5094 Page 11 of 789
`
`medical program in which it contracted with private practice providers to serve
`members of the community.
`11. As a non-profit public benefit corporation, Borrego Health did not have
`individual shareholders, but rather was operated by a Board of Trustees, all of whom
`were supposed to serve on a volunteer basis.
`B.
`FORMER BORREGO INSIDERS
`12. Bruce Hebets was a longtime resident of San Diego County and had
`been a Sergeant with the San Diego Harbor Police Department prior to becoming
`CEO of Borrego Health Foundation in or around 2004. Bruce Hebets served as
`Borrego Health’s CEO beginning in 2004 until his retirement in September 2018.
`Following a decline in Bruce Hebets’ health, Borrego Health’s Executive/Finance
`Committee – with Bruce Hebets’ approval – appointed the then Chief Legal Officer,
`Mikia Wallis, as President of Borrego Health in December 2017, and later as interim
`CEO following Bruce Hebets’ decision to take an extended medical leave, effective
`June 28, 2018. Following Bruce Hebets’ retirement, effective September 1, 2018,
`Mikia Wallis was appointed to the position of Borrego Health’s CEO. Bruce Hebets
`passed away in January 2019. In light of his death and the settlement of his estate,
`Bruce Hebets is not named as a defendant in this action though he would have been,
`if possible.
`13. Defendant Karen Hebets is an individual with her place of residence in
`Borrego Springs, California. Karen Hebets was the Vice President of Business
`Services at Borrego Health. Karen Hebets was also the wife of Bruce Hebets.
`14. Defendant KBH Healthcare Consulting, LLC was a California Limited
`Liability Company with its principal place of business in Borrego Springs,
`California. Bruce Hebets and Karen Hebets were its only members, sharing a 50-50
`interest.
`15. Defendant Mikia Wallis, Esq. is an individual with her place of
`residence in Julian, California. Mikia Wallis is an attorney. She graduated from the
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`11
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5095 Page 12 of 789
`
`University of San Diego School of Law, and was admitted to the California Bar on
`or about June 1, 2007. Mikia Wallis was Chief Legal Officer of Borrego Health,
`and was named interim CEO in June 2018 and CEO in September 2018. Mikia
`Wallis was also on Borrego Health’s Board of Trustees until October 2, 2020.
`Mikia Wallis was placed on administrative leave from Borrego Health on October 9,
`2020, and terminated by Borrego Health on December 15, 2020.
`16. Defendant Diana Thompson, formerly Diana Troncoso, is an individual
`with her place of residence in San Diego County, California. Diana Thompson was
`Borrego Health’s Chief Financial Officer beginning March 2013, and was
`terminated as of March 2021. Diana Thompson’s brother is married to one of Bruce
`Hebets’ and Karen Hebets’ children.
`17. Defendant Harry Ilsley is an individual with his place of residence in
`Sheridan, Wyoming. Harry Ilsley also owns or owned a house in Borrego Springs
`(near the De Anza Country Club golf course). Harry Ilsley was a member of
`Borrego Health’s Board of Trustees and was the Chair of the Board until 2017. He
`was also on the Board’s Executive/Finance Committee.
`18. Defendant Dennis Nourse is an individual with his place of residence in
`Cedarburg, Wisconsin. Dennis Nourse was a former administrator of Borrego
`Health, and later hired Bruce Hebets to be CEO. Dennis Nourse was a member of
`Borrego Health’s Board of Trustees from mid-2012 until his resignation, and was a
`member of the Board’s Executive/Finance Committee.
`19. Defendant Mike Hickok is an individual with his place of residence in
`Borrego Springs, California (near the De Anza Country Club golf course). Mike
`Hickok was a member of Borrego Health’s Board of Trustees, and was a member of
`the Board’s Executive/Finance Committee.
`20. Defendant Chuck Kimball is an individual with his place of residence
`in Julian, California. Chuck Kimball was a member of Borrego Health’s Board of
`Trustees starting in approximately 2011, and was the Chair of the Board from 2017
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`12
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5096 Page 13 of 789
`
`to mid-2019 and Secretary from 2019 until his removal. Chuck Kimball was also a
`member of the Board’s Executive/Finance Committee.
`21. While some may have described themselves as volunteers, Board
`members Harry Ilsley, Dennis Nourse, Mike Hickok, and Chuck Kimball were
`compensated for their service on the Board, including with free medical care and
`other benefits. Moreover, the Harry Ilsley, Dennis Nourse, Mike Hickok, and
`Chuck Kimball are being sued not only for their negligent acts and omissions, but
`their intentional misconduct, including fraud, and their breaches of their fiduciary
`duties to Borrego Health.
`C.
`PREMIER, PRIESTS AND OTHER PRIEST-RELATED
`ENTITIES
`22. Defendant Premier Healthcare Management, Inc. (“Premier”) is a
`California corporation with its principal place of business in El Cajon, California.
`23. Defendant Summit Healthcare Management, Inc. (“Summit”) was a
`California corporation with its principal place of business in El Cajon, California.
`Summit merged with Premier in 2019.
`24. Defendant Daryl Priest is an individual with his place of residence in El
`Cajon, California. Daryl Priest is the owner of Premier. Prior to starting Premier
`Daryl Priest had no material healthcare experience.
`25. Defendant Nicholas (“Nick”) Priest, Esq. is an individual with his place
`of residence in San Diego, California. Nick Priest was the Chief Executive Officer
`of Premier. Nick Priest is the son of Daryl Priest. Nick Priest is also an attorney.
`He graduated from California Western School of Law and was admitted to the
`California Bar on or about June 21, 2016. Prior to working at Premier Nick Priest
`had no material healthcare experience.
`26. Defendant Travis Lyon is an individual with his place of residence in
`Alpine, California. Travis Lyon was the President and Chief Operating Officer of
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`13
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5097 Page 14 of 789
`
`Premier. He is also currently the President of Real Estate Operations at Priest
`Development Corporation.
`D.
`DEFENDANT DENTISTS
`27. Defendant Husam E. Aldairi, D.D.S. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. Dr.
`Aldairi, both individually and through his company Defendant Aldairi DDS, Inc.,
`operated several private dental practices, including 40/30 Dental Inc., located at
`6175 El Cajon Blvd., San Diego, CA 92215 and 40/30 Dental 2, located at 1166
`East Main Street, El Cajon, CA 92021. Husam Aldairi resides in San Diego County.
`Aldairi DDS, Inc., is a California corporation with its principal place of business in
`El Cajon, California.
`28. Defendant Ayed Hawatmeh, D.D.S. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. Dr.
`Hawatmeh, both individually and through his company Defendant Hawatmeh
`Dental Group, P.C., operated several private dental practices, including Bravo
`Dental Group of Corona located at 1185 Magnolia Avenue #K & #L, Corona, CA
`92879, and White Smile Dental, located at 3495 East Concours Street, Suite A,
`Corona, CA 91764. Ayed Hawatmeh resides in San Bernardino County. Hawatmeh
`Dental Group, P.C. is a California corporation, with its principal place of business in
`Ontario, California.
`29. Defendant Alborz Mehdizadeh, D.D.S. is a licensed dentist in
`California with whom Borrego Health partnered through its contract dental program.
`Dr. Mehdizadeh, both individually and through his company Defendant Alborz
`Mehdizadeh, Inc., operated several private dental practices, located at 15080 7th
`Street, Suite 7, Victorville, CA 92395 and 286 N. San Jacinto Street, Hemet, CA
`92543. Alborz Mehdizadeh resides in San Bernardino County in Victorville,
`California. Alborz Mehdizadeh, Inc., is a California corporation with its principal
`place of business in Long Beach, California.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`14
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5098 Page 15 of 789
`
`30. Defendant Jilbert Bakramian, D.D.S. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. He
`operated as a sub-provider (i.e., though an arrangement with Dr. Aram Arakelyan
`but without a direct agreement with Borrego Health). Jilbert Bakramian resides in
`Glendale, California.
`31. Defendant Mohammed Al Tekreeti, D.D.S. is a licensed dentist in
`California with whom Borrego Health partnered through its contract dental program.
`He operated as a sub-provider under Dr. Husam Aldairi. Mohammed Al Tekreeti
`resides in San Diego, California.
`32. Defendant Magaly Velasquez, D.D.S. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. Dr.
`Velasquez, both individually and through her company, Defendant Magaly M.
`Velasquez DDS Professional Dental Corp., operated a private dental practice, called
`U-First Dental Care, located at 9130 Foothill Blvd., Rancho Cucamonga, CA 91730.
`Magaly Velasquez resides in Rancho Cucamonga, California. Magaly M.
`Velasquez DDS Professional Dental is a California corporation with its principal
`place of business in Rancho Cucamonga, California.
`33. Defendant Aram Arakelyan, D.D.S. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. Dr.
`Arakelyan, both individually and through his company, Defendant New Millennium
`Dental Group Of Aram Arakelyan, Inc., operated several private dental practices,
`including practices located at 19523 E. Cypress Street, Covina, CA 91724 and
`10917 Paramount Blvd., Downey, CA 90241. Aram Arakelyan resides in Rancho
`Cucamonga, California. New Millennium Dental Group Of Aram Arakelyan, Inc. is
`a California corporation with its principal place of business in Rancho Cucamonga,
`California.
`34. Defendant Michael Hoang, D.M.D. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. He
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`7496429.4
`
`15
`SECOND AMENDED COMPLAINT
`
`

`

`Case 3:22-cv-01056-L-SBC Document 217 Filed 04/15/24 PageID.5099 Page 16 of 789
`
`operated a private dental practice, located at 13672 Hawthorne Blvd., Hawthorne,
`CA 90250. Michael Hoang resides in Long Beach, California.
`35. Defendant Waleed Stephan, D.D.S. is a licensed dentist in California
`with whom Borrego Health partnered through its contract dental program. Dr.
`Stephan, both individually and through his company, Defendant W.A. Stephan, a
`Dental Corporation, operated a private dental practice, called Stephan Family
`Dental, located at 860 Jamacha Road, Suite 201, El Cajon, CA 92019. Waleed
`Stephan resides in El Cajon, California. W.A. Stephan, a Dental Corporation is a
`California corporation with its principal place of business in San Diego, California.
`36. Defendant Santiago Rojo, D.D.S. is a licensed dentist in California with
`whom Borrego Health partnered through its contract dental program. Dr. Rojo, both
`individually and through his company Defendant Santiago A. Rojo, D.D.S., Inc.,
`operated a private dental practice, called Family Dentistry Inc., located at 22435
`Alessandro Blvd., Suite 106, Moreno Valley, CA 92553. Santiago Rojo resides in
`Orlando, Florida. Santiago A. Rojo, D.D.S., Inc., is a California corporation with its
`principal place of business in Moreno Valley, California.
`37. Defendant Marcelo Toledo, D.D.S. is