Manoj K. Prasad, the embattled CEO of the failed West Suburban Medical Center, was paid hundreds of thousands extra, in addition to his $90,000 annual salary, in 2023, according to court testimony by his former CEO and chief finance officer.
Irena Dumanis, who was West Sub CEO when Prasad took over in December 2022, left in October 2023 after Prasad demoted her to CFO and denied her access to a key bank account.
Dumanis testified at an evidentiary hearing on May 8 in the lawsuit between Prasad and his business partner and West Sub landlord Rathnaker Reddy Patlola. Wednesday Journal has reviewed the 500-page transcript of that hearing.
Under oath she testified that when she was CEO/CFO in 2023, Prasad was receiving $25,000 every other week in addition to his $90,000 annual salary.
Prasad testified that his salary was $90,000 annually, which would be $7,500 a month. He has emphatically denied Dumanis’s allegations.
Neither Prasad nor Dumanis responded to the Journal’s request for further comments.
Dumanis testified that her duties as CEO involved “day-to-day financial operations of the hospital, vendor management, contract — vendor contract management, budgeting, cash flow projections, bank review, transactions review, transaction initiation and approval, signing of checks, payroll, oversight, just to name a few.”
Dumanis said she also had access to Resilience Healthcare’s bank accounts and statements and routinely reviewed them. Except for one.
She said West Sub maintained two separate “lock box” accounts, with payments from Medicare and Medicaid deposited into one, and payments from commercial insurance companies deposited into the other. The sums in both those accounts were then transferred nightly into an operating fund separate from the hospital’s other accounts, one only Prasad controlled.
Asked if “the hospitals maintained bank accounts at Fifth Third Bank” Dumanis answered, “Yes. Well, the hospitals didn’t, but there was an account,” and identified it as “an account under Westlaw Management Group.”
“Were any payments being made to Westlaw while you were CFO,” she was asked. She answered “Yes.”
“Were there routine payments made,” she was asked, and answered “Yes. There were payments that were made every couple of weeks. For the most part they coincided with payroll and …”
“Were these biweekly payments?”
“For the most part, yes.”
What was the — typically the amount of these payments?
“Those payments were anywhere between 25 to 30,000,” Dumanis said.
“And who told you to make those payments?”
“Dr. Prasad,” she said.
Asked why Prasad told her to make those payments, Dumanis replied, “My understanding is that part of those payments were to cover credit cards.”
“And what did … Dr. Prasad tell you about these biweekly payments?”
“That these payments were to cover some of the credit card payments, and the other portion of those payments was to supplement his payroll.”
“To supplement his payroll?”
“Yes,” Dumanis said.
“Did Dr. Prasad tell you why he wanted the payment set up this way?”
“He said that he was going through a divorce at the time, and he didn’t want his official payroll records to have all of the payroll reflected,” Dumanis testified.
“So for those biweekly payments that we were discussing, did those continue throughout your employment at the Resilience Healthcare entities,” Dumanis was asked. “Yes,” she said.
Later on she was asked if she ever requested to see the account statements for Westlaw and she replied that she had asked.
“Who did you request access from?”
“Dr. Prasad.”
“Did Dr. Prasad ever provide you with those account statements?”
“No.”
“Did he ever provide you with access to the Westlaw accounts?”
“No.”
Asked later, “Wasn’t it your idea to make sure that funds were transferred out of the operating accounts because if it were to stay in the operating accounts, the hospital would spend it?” Dumanis answered, “That was his idea.”
“Your testimony is that was his idea, not yours?”
“Correct.”
Dumanis was later asked, “So you previously testified that Dr. Prasad would be paid at least $25,000 usually biweekly from the hospitals and to the Westlaw account?”
“Yes,” she said.
On re-direct examination, Ramco attorney Scott Kaplan sought clarification of what Dumanis had said.
“…I believe you had testified earlier that Dr. Prasad was receiving compensation through regular payroll, correct,” Kaplan queried.
“I believe so, yes,” she replied.
“But that these transfers, these biweekly payments to Westlaw were in addition to those?” Kaplan asked.
“Correct,” Dumais answered.
Prasad testimony
When Prasad was on the stand, he was asked about his ongoing divorce.
“Were you required to report your income as part of that divorce proceeding process?”
“We are still not there yet,” he answered.
“What was your salary at Resilience?” he was asked.
“I was taking home $90,000 a year,” he replied.
“That was your total compensation at Resilience?”
“Correct,” he said.
“2025?”
“Correct,” he said.
“2024?”
“Correct,” he said.
“Are you still paying yourself?”
“Yeah, the same amount,” Prasad answered.
“And you’ve never taken any other compensation?”
“No, I have not,” he answered.
“So you dispute the testimony that we heard earlier today from your former CFO?”
“Yeah. I totally disagree with that,” Prasad testified.
However, Martin Tasch, the attorney who initially represented Resilience and who later resigned, disclosed in a May 8 court filing that $2 million had in fact been set aside to compensate Prasad.
As part of their effort to have a receiver appointed and Prasad removed, Ramco’s attorney had alleged that West Sub and Weiss Memorial had hospitals closed “because of the gross mismanagement and misappropriation of funds by Dr. Manoj Prasad…”
Ramco alleged a $2 million transfer was part of that misappropriation, and that the money was sequestered in the Westlaw account controlled solely by Prasad.
In refuting Ramco’s allegations, Tasch wrote that “The money was intended to address Prasad’s shortfall in compensation, which has apparently now become an issue.” Tasch also opined that it was money Prasad was justified in taking.
“Prasad testified he only received $90,000 per year, but the parties never explored or took discovery on what he was entitled to,” Tasch wrote. He also suggested that Prasad believed he was entitled to more than $90,000 a year in compensation.
Referring to the AUM Global Healthcare Management LLC Amended and Restating Operating Agreement which Prasad said he and Patlola signed, Tasch said it provided in Section 6.2 that Prasad “shall be paid compensation, including a comprehensive set of benefits, that is similar to compensation paid to CEOs of other similar sized hospitals.”