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Trustee turns down doctors' plea for debt relief
(Cape Cod Times (Hyannis, MA) Via Acquire Media NewsEdge) Nov. 9--A U.S. trustee says two Hyannis physicians attempted to defraud creditors and lied to bankruptcy officials while seeking relief from millions of dollars' worth of debt.
In a complaint filed Oct. 30 in U.S. Bankruptcy Court, U.S. Trustee Phoebe Morse said she was denying Drs. Rahul and Neena Chaturvedi's request for bankruptcy relief.
The physicians filed for bankruptcy in October 2007, saying they owed $15 million in debts and liabilities to hundreds of creditors.
The Chaturvedis, who owned a large office building at 100 Independence Drive, seemed to have experienced a run of bad luck.
Patient complaints over missing medical records and unprofessional conduct, among other things, led to their licenses being pulled by the Massachusetts Board of Registration in Medicine within the past two years, and the couple faced a raft of lawsuits.
In one of the biggest cases, former business associate Dr. Rose Ann Berwald was awarded $1.1 million by a Barnstable Superior Court judge who said Rahul Chaturvedi had defrauded Berwald in a business deal regarding an electronic medical records system known as Nuspeech.
While Berwald said she hasn't seen a dime from the May 2007 court judgment, U.S. Trustee Morse said the Chaturvedis have continued to make money off Nuspeech.
Only now they are calling it Total Care Network PVT Ltd. (TCNPL), which Rahul told bankruptcy officials was a new entity formed by his mother in India in which he had a 2 percent stake, Morse said.
"Rahul Chaturvedi testified that the software being sold by TCNPL was 'developed under TCN Systems by me and some other subcontractors in India,'" she wrote. "This testimony was false."
The software and other intellectual property belonged to Nuspeech, according to Morse. She said that in attempt to "hinder, delay and defraud the creditors of Nuspeech" the Chaturvedis -- with the help of live-in employee Eva Purkarova -- transferred Nuspeech assets to TCN.
Purkarova also helped the Chaturvedis move money between their personal and corporate entity bank accounts before the bankruptcy petition date, Morse wrote. "Ms. Purkarova facilitated the movement of money via wire transfers between Nuspeech and entities controlled by the parents of Rahul Chaturvedi in India."
The allegations don't surprise Berwald and another creditor, Hyannis restaurateur Narinder Thind.
Berwald, a physician in Brockton, said she will be happy with "whatever the justice system chooses to do with him, because fraud is criminal.
The amount of money he defrauded out of me has changed my life forever."
Thind, who owns the Pavilion and Roo Bar restaurants in Hyannis, says Chaturvedi and his sister, Seema Chaturvedi, have purchased a high-rise building in a city near New Delhi. That infuriates Thind because Rahul Chaturvedi owes him $165,000 for defaulting on a house mortgage he co-signed for the physician.
"He's playing with the American system," Thind said. "This guy should be in the jail."
In an e-mail, Rahul Chaturvedi said he intended to respond to inquiries from the Times after he had a chance to review the bankruptcy court document. "I would appreciate working with you collaboratively to let your readers know the full truth," he wrote.
U.S bankruptcy court officials won't comment on the Chaturvedi case, which is likely headed toward a civil trial on whether the debt should be discharged.
There is a possibility that a federal prosecutor could end up conducting a criminal investigation.
The Chaturvedis already are being eyed by other government agencies.
A representative of the Labor Department has attended bankruptcy proceedings. At least six employees say the Chaturvedis owe them thousands of dollars in unpaid wages.
One former employee said she took her complaint to the state Attorney General's Office, but the state agency declined to comment on the status of its investigation.
The Chaturvedis' creditors include the IRS and the state Department of Revenue, and they are still being pursued by patients who say they can't get medical records more than a year after the couple closed their practice, Physicians Medical Center.
"I even had a lawyer try to get them," former patient Kirsten DeBeradinis said.
As infuriating as the Chaturvedis' actions are to their creditors and objects of their lawsuits, their actions bemuse outside observers such as attorney George MacKoul, who formerly represented Hyannis businessman Stuart Bornstein, one of the Chaturvedis' creditors.
"He is a very intelligent man, and he knows how to manipulate the legal system, with and without the help of an attorney," MacKoul wrote in an e-mail. The Chaturvedis have used the services of three attorneys since filing for bankruptcy last year and at times represent themselves.
Wherever the Chaturvedis go, a flurry of legal papers and complaints seems to follow.
They've attempted to sue attorney Stephen Shamban, the trustee assigned to represent the couple in U.S. Bankruptcy Court, and have called the Barnstable Police Department on landlord Francis Kennedy, the new trustee of their former office building at 100 Independence Drive.
Chaturvedi is "very, very, very familiar to us," Barnstable police Sgt.
Sean Sweeney said. "It's mostly because of that building."
In the meantime, bankruptcy officials are wondering what has happened with $117,000 worth of personal property the Chaturvedis listed in a 2006 personal financial statement. The list includes household artifacts, jewelry and a coin collection, Morse wrote.
More than a year later, without explanation, the couple told bankruptcy officials their personal property had a value of $6,364.38, Morse said.
"I suspect that his title as a physician gave him instant credibility in most people's eyes," MacKoul said. "He used this to his advantage."
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Copyright (c) 2008, Cape Cod Times, Hyannis, Mass.
Distributed by McClatchy-Tribune Information Services.
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