Former Cano Well being CEO Marlow Hernandez is dealing with a jury trial this week over allegations of fraud and corruption. The trial, set to start on Monday, will look at claims that Hernandez used his place to illicitly enrich himself and his household — actions the plaintiffs say helped drive Cano out of business.
This would be the first time Hernandez has confronted trial for his alleged misconduct at Cano, which he based in 2009.
The Miami-based firm is a senior-focused main care supplier that went public in 2021 by way of a $4.4 billion SPAC merger. Final 12 months, it filed for Chapter 11 chapter. This submitting got here lower than a 12 months after three of Cano’s board members publicly resigned in protest of its governance technique. They left in March 2023, when the corporate’s inventory had dropped 80% in 12 months.
Most business specialists reacted to the chapter submitting with out shock, believing it to be a direct results of mismanagement, poor market choice and a quixotic development technique.
The plaintiffs within the trial Hernandez is dealing with this week — Onsite Dental and its subsidiary CD Help — are in search of over $72 million in damages.
They allege that Hernandez made a number of fraudulent misrepresentations that led them to enter into two main enterprise offers — the sum of which totaled greater than $30 million.
Based on the grievance, Cano was speculated to associate with Onsite to open dental clinics inside Cano’s main care services — in addition to pay the corporate assured month-to-month charges totaling a whole lot of tens of millions of {dollars} over twenty years.
Hernandez instructed Onsite that Cano was increasing its value-based care choices to incorporate dental companies and that he wished a associate to assist scale these operations nationally, mentioned Joe Mamouna, one of many attorneys representing the plaintiffs.
The plaintiffs allege that Hernandez lied about key details, together with Cano’s monetary well being, inner approval of the contracts and compliance with healthcare rules. They are saying these misrepresentations prompted Cano to later cease paying greater than $5.5 million in invoices.
Their lawsuit accuses Hernandez of fraud, negligent misrepresentation, misleading commerce practices, and unjust enrichment for deceptive enterprise companions after which personally benefiting from the association.
They declare they poured tens of millions of {dollars} into staffing, gear and infrastructure to launch Cano-branded dental clinics, just for Cano to all of the sudden cease paying its invoices. As a result of their settlement assured mounted month-to-month funds, that halt in funding allegedly worn out their money circulation and compelled them to close down operations, lay off workers and abandon dozens of clinics in the midst of constructing them.
Based on discovery, Hernandez allegedly used the Onsite Dental deal to “line his and his spouse’s pockets,” Mamouna acknowledged.
Hernandez didn’t reply to MedCity Information’ request for remark.
Photograph: tiero, Getty Photos
