Resilience Healthcare CEO accused of moving millions from hospital fund to private account

CHICAGO (WLS) -- There were explosive accusations in court as the landlord for Resilience Healthcare accused CEO Manoj Prasad of moving tens of millions of taxpayer dollars from a hospital operating fund to a private account controlled solely by Prasad.

Landlord Rathnaker Reddy Patlola says this happened as vendors and hospital staff were struggling to get paid and patient care declined.

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Patlola is asking for a third party to restart operations at West Suburban Medical Center under new leadership.

Patlola and Prasad faced off in court for the first time with no clear path forward for the future of West Suburban, a private safety net hospital in Oak Park that served tens of thousands of patients a year and employed more than 700 people before it abruptly closed its doors March 25. Resilience Healthcare also runs the now-closed Weiss Memorial Hospital in Uptown.

The former chief financial officer for Resilience Health testified she had no access to an account run by Prasad that had $35 million, including a $10 million state loan, transferred into it from a general operating fund. This came as both Weiss and West Sub were barely making payroll and paying bills. Both eventually closed.

"You know, we're listening to all the financial transactions. And they're highly irregular, going to a third bank account. And you're not talking about $1,000. You're talking about $20 million being transferred, and the CFO has no knowledge of what's happening with that money," said Dr. Vishnu Chundi, who formerly worked at West Suburban.

Patlola testified he met with state health officials and the Illinois Office of the Inspector General after West Suburban closed to try to save the hospital, asking them to investigate where those state funds went. The I-Team previously reported investigations by state authorities are underway.

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"This is public funding. This is not, you know, the owner is putting money into it and doing what they want. This is money that you and I pay in taxes, and there's no accountability," Dr. Chundi told the I-Team.

Patlola said under oath he was only informed recently that he is a co-owner of the account where millions were transferred by Prasad but still has no access to it and no knowledge of where the money has gone.

"I'm hearing the dollar amounts that he allegedly received. We don't see that those were put into the hospital, you know, elevator service, the HVAC system, cardiac monitors that were, you know, beyond repair," said Sylvia Williams, West Suburban's former nursing director.

Prasad has argued all money transferred was used for hospital operations.

Prasad claimed he and Patlola had adjoining offices. Though Patlola's role was only advisory in nature, Prasad said they were partnering to save the hospitals, telling the court under their lease agreement, the hospital cannot be evicted. He also said Patlola should have paid for more repairs.

Prasad claimed he never denied access to his account for Patlola or hid transfers. From the stand, Patlola called for the FBI to investigate what happened to state loans to Resilience Healthcare and said a third party taking over is the only way to reopen hospital services.

Prasad maintains he can reopen West Suburban in phases this summer.