Desai federal case postponed

U.S. Magistrate Peggy Leen has put off the federal health care fraud trial of Dr. Dipak Desai and his office manager until May 22, 2012, in a move that gives Clark County prosecutors the first crack at trying the physician at the center of the hepatitis C outbreak.

District Attorney David Roger said Wednesday he was pleased with Leen's decision despite obstacles the competing federal case presents for his office. The local trial is set March 12, 2012.

"We're happy to have the opportunity to try Dr. Desai first," Roger said. "Based upon Nevada statutory double jeopardy issues, it is important that the state case go first. Federal authorities do not have the same prohibitions as we do in state court."

Federal prosecutors pushed in court papers this week to delay their complex case, which was scheduled to go to trial in July.

"It was our desire to set the federal case following the state's prosecution," U.S. Attorney Daniel Bogden said.

The district attorney's office indicted Desai, 61, and two of his nurse anesthetists in June of last year, 10 months before federal authorities brought their charges against Desai and Tonya Rushing, who ran his endoscopy clinics.

The indictment of Rushing, 43, one of the district attorney's chief witnesses, created friction between local and federal prosecutors in the high-profile investigation.

Roger's office was given only a day's notice of the indictment, and now county officials fear Rushing won't testify at the local trial to avoid incriminating herself in the federal case.

But her lawyer Louis Schneider confirmed Wednesday that he has held initial plea agreement talks with federal prosecutors. If a deal is struck, Rushing would be in a better position to testify in the district attorney's case.

Whether Desai will even be able to stand trial remains to be seen.

At a brief hearing late last week, Desai's lawyer Richard Wright told U.S. Magistrate Lawrence Leavitt that there has been no change in the gastroenterologist's mental condition and that he is expected to undergo another couple of months of evaluation at the state's mental health hospital in Sparks.

Leavitt held off setting Desai's arraignment on the federal charges and ordered another status check on his condition in two months.

Desai was taken to the Lakes Crossing facility in Sparks in March for observation under orders from District Judge Jackie Glass. Two court-appointed medical experts from Las Vegas had found him incompetent to stand trial because of the effects of two strokes.

Glass steps down from the bench on June 10, which means a new judge will have to be appointed to oversee the legal wrangling in the local case over Desai's competency to stand trial.

Desai and Rushing, who is free on her own recognizance, 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.

The case mirrors some of the charges the district attorney filed last year in a 28-count indictment.

Desai and two of his nurse anesthetists, Keith Mathahs and Ronald Lakeman, face an array of 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.

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 reporter Jeff German at jgerman@reviewjournal.com or 702-380-8135.