Michael and Julian Omidi, operating as VCFB Management, agreed to buy Anaheim… (Gina Ferazzi, Los Angeles…)
The brothers behind the 1-800-GET-THIN marketing campaign for Lap-Band surgery are trying to buy a troubled Anaheim hospital, even as they deal with regulatory investigations of their weight-loss business, attorneys for the hospital said in a court filing.
Michael and Julian Omidi, operating as VCFB Management Inc., agreed to purchase Anaheim General Hospital for $11.4 million in August 2011, the hospital said in a lawsuit filed in Orange County Superior Court.
When the deal fell apart, VCFB sued Anaheim General in September 2011 to force the sale through. Anaheim General filed a counter lawsuit, seeking money it says VCFB had agreed to pay but did not. Both lawsuits are pending.
Meanwhile, Anaheim General continues to operate under the ownership of Pacific Health Corp. and is no longer for sale, a Pacific Health spokesman said.
Dan Chambers, an attorney who represents VCFB, said in an email to The Times that the Omidis "have no involvement whatsoever in the management of VCFB, and the allegations in the cross-complaint are false."
Using a catchy jingle and photographs of happy, skinny people, 1-800-GET-THIN advertised Lap-Band weight-loss surgery on Southern California freeway billboards, radio, television and the Internet. The company pulled the ads after receiving a warning letter from the Food and Drug Administration in December 2011 that said they underplayed risks to patients.
Owning a hospital may have appealed to the Omidis because some insurers limit the amount of money they will pay for procedures performed at outpatient clinics, including those affiliated with 1-800-GET-THIN, said Dr. Carson Liu, a Santa Monica bariatric surgeon who does not work for the Omidis.
"I think the Omidis are thinking they can go into the hospital business and have a way of funneling in all those insurance patients they were seeing that needed hospitals," Liu said. "I think it was a good business decision for them, but I think they would have struggled because of all the rules and regulations that go with running a hospital.... Almost every hospital I know is struggling right now."
Anaheim General has struggled for years. The hospital lost its accreditation in 2008 after scores of safety citations by regulators. It regained accreditation but was losing money at the time it agreed to be acquired by VCFB, Anaheim General said in its lawsuit. The lawsuit seeks $900,000 in operating losses incurred after the deal fell through. The hospital reported a $13.6-million loss for the 12-month period that ended in August 2011, according to state records.
The dealings between VCFB and Anaheim General have been tumultuous, with both sides unable to even agree on the Omidis' role with VCFB.
In its counter lawsuit, Anaheim General said that VCFB is a "shell entity" controlled by the Omidis. The hospital also said that VCFB would not have been able to operate a hospital because of the Omidis' disciplinary records. Each of the Omidi brothers has been sanctioned by the Medical Board of California for misconduct, with Julian Omidi losing his license to practice medicine, according to state records.
"VCFB is not and never would have been licensable," the hospital said in the lawsuit, noting that VCFB's "affiliates were under investigation for various misrepresentations and illegal conduct and that the doctors affiliated with the 1-800-GET-THIN program, Julian and Michael Omidi, had been sanctioned and/or suspended from the practice of medicine."
The Omidi brothers did not respond to a request for comment. They operate 1-800-GET-THIN and a chain of affiliated outpatient surgery centers, according to lawsuits and other public records.
Five patients died following Lap-Band surgery at clinics affiliated with the ad campaign from 2009 to 2011, according to lawsuits, autopsy reports and other public records.
The California Department of Insurance, FDA and Los Angeles Police Department have acknowledged investigations related to 1-800-GET-THIN.
Anaheim General is represented in the litigation by Davis Wright Tremaine, a firm that has previously defended The Times in lawsuits the Omidis filed against its journalists. Those lawsuits were dismissed and the Omidis paid The Times nearly $90,000 to cover the newspaper's legal fees.