Former
Cano
Health
CEO
Marlow
Hernandez
is
facing
a
jury
trial
this
week
over
allegations
of
fraud
and
corruption.
The
trial,
set
to
begin
on
Monday,
will
examine
claims
that
Hernandez
used
his
position
to
illicitly
enrich
himself
and
his
family
—
actions
the
plaintiffs
say
helped
drive
Cano
into
bankruptcy.
This
will
be
the
first
time
Hernandez
has
faced
trial
for
his
alleged
misconduct
at
Cano,
which
he
founded
in
2009.
The
Miami-based
company
is
a
senior-focused
primary
care
provider
that
went
public
in
2021
through
a
$4.4
billion
SPAC
merger.
Last
year,
it
filed
for
Chapter
11
bankruptcy.
This
filing
came
less
than
a
year
after
three
of
Cano’s
board
members
publicly
resigned
in
protest
of
its
governance
strategy.
They
left
in
March
2023,
when
the
company’s
stock
had
dropped
80%
in
12
months.
Most
industry
experts
reacted
to
the
bankruptcy
filing
without
surprise,
believing
it
to
be
a
direct
result
of
mismanagement,
poor
market
selection
and
a
quixotic
growth
strategy.
The
plaintiffs
in
the
trial
Hernandez
is
facing
this
week
—
Onsite
Dental
and
its
subsidiary
CD
Support
—
are
seeking
over
$72
million
in
damages.
They
allege
that
Hernandez
made
multiple
fraudulent
misrepresentations
that
led
them
to
enter
into
two
major
business
deals
—
the
sum
of
which
totaled
more
than
$30
million.
According
to
the
complaint,
Cano
was
supposed
to
partner
with
Onsite
to
open
dental
clinics
inside
Cano’s
primary
care
facilities
—
as
well
as
pay
the
company
guaranteed
monthly
fees
totaling
hundreds
of
millions
of
dollars
over
twenty
years.
Hernandez
told
Onsite
that
Cano
was
expanding
its
value-based
care
offerings
to
include
dental
services
and
that
he
wanted
a
partner
to
help
scale
those
operations
nationally,
said
Joe
Mamounas,
one
of
the
attorneys
representing
the
plaintiffs.
The
plaintiffs
allege
that
Hernandez
lied
about
key
facts,
including
Cano’s
financial
health,
internal
approval
of
the
contracts
and
compliance
with
healthcare
regulations.
They
say
these
misrepresentations
caused
Cano
to
later
stop
paying
more
than
$5.5
million
in
invoices.
Their
lawsuit
accuses
Hernandez
of
fraud,
negligent
misrepresentation,
deceptive
trade
practices,
and
unjust
enrichment
for
misleading
business
partners
and
then
personally
benefiting
from
the
arrangement.
They
claim
they
poured
millions
of
dollars
into
staffing,
equipment
and
infrastructure
to
launch
Cano-branded
dental
clinics,
only
for
Cano
to
suddenly
stop
paying
its
invoices.
Because
their
agreement
guaranteed
fixed
monthly
payments,
that
halt
in
funding
allegedly
wiped
out
their
cash
flow
and
forced
them
to
shut
down
operations,
lay
off
employees
and
abandon
dozens
of
clinics
in
the
middle
of
building
them.
According
to
discovery,
Hernandez
allegedly
used
the
Onsite
Dental
deal
to
“line
his
and
his
wife’s
pockets,”
Mamounas
stated.
Hernandez
did
not
respond
to
MedCity
News’
request
for
comment,
but
in
court
filings
has
denied
the
allegations.
Photo:
tiero,
Getty
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