Desai aide enters plea

A key witness in the district attorney's criminal case against Dr. Dipak Desai pleaded not guilty Wednesday to federal conspiracy and health care fraud charges.

"I'm just shocked," Tonya Rushing said afterwards, with a dozen family members and other supporters huddled around her.

"It angers me and frustrates me that after all of my cooperation, I'm in this position. I'm going to prove myself innocent," she said.

Rushing, 43, who ran Desai's clinics at the center of the hepatitis C outbreak, criticized federal prosecutors last month after they indicted her with Desai.

Rushing said she felt betrayed.

Desai, 61, and Rushing were charged in the federal indictment with one count of conspiracy, 25 counts of health care fraud and a forfeiture count seeking to seize $8.1 million.

The indictment alleges the pair carried out a scheme from January 2005 through February 2008 to inflate the length of medical procedures and overbill health insurance companies.

In an interview last month, Rushing denied participating in the scheme, saying she only did what she was told to do.

"I was just processing the billing," she said. "We relied on ethical physicians to give us appropriate and accurate documentation."

Rushing warned again on Wednesday that her indictment is setting a dangerous precedent, which she said should worry other office and billing managers in similar situations.

U.S. Magistrate Peggy Leen allowed Rushing to remain free on her own recognizance and set a July 12 trial.

At the request of Assistant U.S. Attorney Crane Pomerantz, Leen declared the case complex. The designation is reserved for cases involving large amounts of paperwork and means the judge hearing it will preside from start to end.

Pomerantz told Leen that the government, in its first wave, was turning over 50,000 pages of documents to the defense.

The case, which mirrors some of the charges the district attorney filed against Desai in June, has caused friction between county and federal prosecutors.

The district attorney's office wants to call Rushing as one of its chief witnesses next year at the District Court trial of Desai and two of his nurse anesthetists, Keith Mathahs and Ronald Lakeman. But Rushing's lawyer, Louis Schneider, has advised her not to testify to avoid the possibility of incriminating herself in the federal case.

Desai and the two nurses face several felony charges, including racketeering, insurance fraud and neglect of patients.

The charges revolve around seven people who authorities say were infected with the potentially deadly hepatitis C virus at Desai's endoscopy clinics.

Desai's trial on the state charges remains on hold while officials at Lake's Crossing, the state's mental hospital, determine whether Desai is competent to help his lawyers in court.

An arraignment date has yet to be set for Desai on the federal charges.

In March, under orders from District Judge Jackie Glass, Desai was taken to Lake's Crossing for observation.

Two court-appointed medical experts from Las Vegas had found him incompetent to stand trial because of the effects of two strokes in recent years.

The police investigation began shortly after health officials disclosed the hepatitis C outbreak in February 2008.

Desai came under scrutiny after the Southern Nevada Health District linked cases of hepatitis C to his clinics.

Contact Jeff German at or 702-380-8135.