In a dramatic courtroom reveal, Resilience Healthcare’s CEO, Manoj Prasad, stood accused of diverting millions of taxpayer dollars from a hospital’s operating fund into a private account under his exclusive control. This explosive allegation was made by the landlord, Rathnaker Reddy Patlola, who painted a grim picture of financial mismanagement as vendors and hospital employees struggled to receive payments, leading to a decline in patient care.
Patlola has taken a bold step, urging the appointment of new leadership to revive operations at the beleaguered West Suburban Medical Center. The hospital, a vital private safety net in Oak Park, served thousands of patients annually and provided jobs for over 700 people until its sudden closure on March 25. This facility was not alone in its troubles, as Weiss Memorial Hospital in Uptown, also managed by Resilience Healthcare, faced a similar fate.
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The courtroom showdown between Patlola and Prasad marked the first time the two faced each other directly. Yet, the future of West Suburban remains uncertain, with no clear resolution in sight. The gravity of the situation was underscored by testimony from Resilience Health’s former chief financial officer. She disclosed her lack of access to an account controlled by Prasad, which held $35 million, including a significant $10 million state loan, all transferred from the hospital’s general operating fund. This financial maneuver occurred as both Weiss and West Suburban struggled to cover payroll and other expenses, ultimately leading to their closures.
The irregularity of these financial transactions did not escape the notice of Dr. Vishnu Chundi, a former employee at West Suburban. He questioned the legitimacy of such large transfers, which amounted to $20 million moving to an obscure third bank account, all without the CFO’s knowledge. Dr. Chundi’s observations highlighted the troubling lack of transparency and accountability in the hospital’s financial dealings.
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.
“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.
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