WASHINGTON, D.C. — Dr. Akshay Desai of St. Petersburg, Florida, a physician turned high profile entrepreneur, who was once upon a time one of the most influential Indian American Republican operatives and fund-raisers in the sunshine state — hobnobbing with governors, senators and the hierarchy of the GOP establishment— till his fall from grace in 2012 when his Universal Health Care Group Inc., went belly up leaving scores of investors, mainly fellow Indian American physicians who had pumped millions of dollars into this HMO (health maintenance organization) in the lurch, died suddenly on Nov. 29 of a massive brain aneurysm. He was 61.
A close friend of the family told India Abroad that a few days before his demise, the Valsad, Gujarat-born Desai, was downstairs in the “man-cave” of his palatial bayfront Snell Isle mansion watching television, when his wife Seema heard a “thud,” and she rushed downstairs and saw him sprawled on the floor and having what appeared to be a seizure, “and she immediately called 911 and he was rushed to hospital, but was already in a coma in the ambulance and died in hospital without ever regaining consciousness.”
During his heady days when he was the toast of the Republican Party in Florida, Governors Jeb Bush, Rick Scott and several other bigwigs in the GOP, were regulars at the lavish fundraising parties he hosted, as were Indian ambassadors to the U.S., including then Ambassador Nirupama Rao.
In an interview with India Abroad when he was governor, Bush said that Desai was important and active “both in terms of fund-raising and policymaking,” and that not only had Desai hosted several fundraisers for him but “he also is on our Education Research Commission, which is a very prestigious and important policy-making group that develops innovative strategies for education reform.”
And just months before the FBI agents on March 28, 2012 raised the headquarters of Universal Health Care Group, Inc., in St. Petersburg, which Desai founded and was the chairman and CEO of, besides being the finance chair of the Florida Republican Party, then GOP presidential candidate Mitt Romney had appointed him co-chair of Asian Americans for Romney and he would constantly fly around with Romney on his campaign plane.
Earlier, Desai, who lived a flamboyant lifestyle with fast cars and his own aircraft, and also served on the President’s White House Commission on Asian Americans and Pacific Islanders from 2005 to 2008 in the George W. Bush administration, had told India Abroad that “my company is now doing business in 20 states and this year, we are expecting revenue of $1.5 billion.”
But then state documents portrayed Universal as a company in deep financial distress and badly mismanaged and Desai and other executives overstating assets and submitting “misleading financial statements” to the state and a major creditor and after the FBI raid, Desai’s influence and clout quickly dissipated and he was considered a pariah by the GOP establishment and those who had been the beneficiary were scurrying to return his political contributions and absolve them from any part of the scandal.
The Indian American investors were also seething with anger after the company filed for bankruptcy and up to the time of his death, many of them who sued him but never recovered their money and the over 1,000 employees who lost their jobs, never forgave him for what they considered his perfidy and he was shunned by many in the community in Western Florida, mainly in the Clearwater and Tampa area.
The Department of Justice also called on the bankruptcy court to appoint a trustee for Universal, which had been a major Medicare and Medicaid provider, and ultimately also left thousands of customers without any medical insurance. Universal had listed its Medicare Advantage membership at over 90,000 and its Medicaid enrollees at more than 64,000.
At the time the FBI raid was carried out, the bankruptcy court trustee had alleged “a pattern of dishonesty or gross mismanagement,” including “side deals” that benefited insiders, and also cited examples where more than $18. 3 million had been transferred to a Universal subsidiary, also founded by Desai and $2.2 million in “bonuses and other compensation” to Desai and other executives, in addition to their salaries, also in 2012.
The trustee also said that even when Universal was knee-deep in financial trouble, Desai had continued to draw a $900,00 salary and another $2.5 million or more in bonuses and other compensation in 2012.
One of those who had sued him at the time was longtime Republican Party stalwart and major fundraiser, Dr. Zach Zachariah, who had mentored him and brought him into the fold of the GOP, introducing him to all of the major players.
In the lawsuit, Zachariah alleged Desai of freezing him out of his board seat at Universal, their jointly-owned company, and diluting the value of his holdings without his knowledge or consent, costing him millions of dollars.
His suit said that Desai not only unilaterally and improperly kicked him off the board of directors at Universal, but that subsequently Desai issued 57 million additional shares of common stock without any shareholders or board meeting reducing the value of his ownership share from 20 percent in the company to about 14 percent.
Zachariah told India Abroad at the time that he was a co-founder of Universal with Desai and that “he owns 78 percent and I own 19.6 percent of the company.”
He said, “Because of my involvement, some of my family members, friends and acquaintances invested in excess of $30 million to acquire shares in the company.”
On a personal level, when reminded that he and Zachariah were close friends at one time and major Republican Party activists and fund-raisers, and how he now felt about Zachariah’s lawsuit, Desai told India Abroad at the time, “It is absolutely saddening and disappointing. This is almost a betrayal.”
In 1989, when after researching the best cities for geriatric opportunities, Desai moved to St Petersburg to take over a geriatric practice, and it was then the likes of then well-seasoned GOP operatives and fund-raisers like Zachariah and Tampa thoracic surgeon, Dr. Raghavendra Vijayanagar, founder and chairman of the Indian American Republican Council, who sensing Desai’s talent not only as a potential fund-raiser but also a well-informed political activist who could lend himself to the Indian American involvement and play in the GOP big-leagues, co-opted him into the Florida Republican Party circles and introduced him to the major players including then the likes of Jeb Bush. Another person who sued Desai, was the late Dr. Raj Gupta, a longtime senior member of the American Association of Physicians of Indian Origin ( AAPI), and was a gastroenterologist in Fort Lauderdale, who told India Abroad at the time that he and his wife Shobha, also a physician specializing in psychiatry, had invested to the tune of over $4 million in Universal — which was essentially their retirement savings and monies they had kept for their children’s education —largely on Zachariah’s recommendation.
Another investor, Abhijit Pandya of Boca Raton, a professor of electrical engineering at Florida Atlantic University, echoed similar concerns about “the status of my investment and the dilution of share-holder value.”
The St. Petersburg Times on Oct. 17, 2011, reported that in addition to the money Desai has bundled from other contributors, “he, his wife and his corporation have donated at least $735,000 to state and federal campaign organization, including about $480,000 to the Florida GOP and $140,000 to the Republican National Committee.”
Desai also flirted for a while in the media business, founding and publishing a glossy magazine in the early 2000’s called The Indian American, which he said at the time he wanted to grow into one as popular and lucrative and boast of a circulation like that of the African American magazine Ebony, with a heady mix of features and news.
But, he relinquished his dream of becoming a media magnate after a few years due to anemic circulation and advertising and gave up on the magazine and launched his attention full-time into devoting all of his energies into growing Universal Healthcare.
Zachariah contacted by India Abroad after the death of Desai, said, “I was so sorry to hear of the news that he had suddenly died,” and added that he was happy “that I had made my peace with Akshay a few years ago.
“I was nice to him even though I lost a lot of my life savings to him, but what can you do? You have to forgive and forget,” and spoke nostalgically how Desai had called him just a couple of weeks before his death “and wanted to come and spend a weekend with me at my ranch (in Punta Gorda, Florida) and I said it would be fine.”