Allegations Against Former Owners Of HRC Medical - NewsChannel5.com | Nashville News, Weather & Sports

NC5 Investigates: Consumer Alert

Allegations Against Former Owners Of HRC Medical

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by Jennifer Kraus
Consumer Investigator

NASHVILLE, Tenn. - Stunning new allegations have been made against the former owners of HRC Medical which once claimed to be the world's largest hormone replacement company.

The Tennessee Attorney General sued the company last fall for putting patients' lives in danger after NewsChannel 5 Investigates exposed how some had been overdosed on hormones and experienced serious side effects.

The state has accused the owners of HRC of cleaning out the company's bank accounts and leaving nothing for the victims of HRC.

In an unsealed amended complaint, the Tennessee Attorney General said brothers Don and Dan Hale not only raided HRC Medical's accounts last year with their families, but also transferred all of its assets to other entities they still controlled and intentionally left the company insolvent.

The state said the Hales took almost $2 million from the company -- money the state had hoped to use to compensate patients who suffered serious health complications from HRC's hormone replacement therapy.

Former patients, like Roger Wyatt, told NewsChannel 5 Investigates back in November of 2011 how his personal doctor told him, "By their own laboratory standards, you've been severely overdosed with testosterone."

According to the state's lawsuit, it all began after NewsChannel 5 Investigates' first report more than a year and a half ago when patients described how they'd been overdosed with hormones at HRC.

A female patient who had asked us to hide her identity told us, "My voice is deeper and now I have hair, stubble on my chin and my upper lip."

Not long after, the state launched its own investigation and eventually sued HRC for misleading customers and putting their lives in danger by failing to warn them of serious health risks associated with hormone replacement therapy.

The attorney general alleged the fraudulent transactions started as soon as the Hales got wind of the investigation and picked up significantly in the days before the case went to court last fall.

According to the complaint, on October 15, 2012, one week after the state's lawsuit was filed against HRC, the company paid $392,000 each to both Don and Dan Hale, and $459,000 to each of their wives.

On November 14, 2012, two days before the case went to court, HRC wired $30,000 to Bonnie Hale, Dan's wife, and another $30,000 to an account shared by Don Hale and his wife, Dixie.

And the day before another court hearing in December, HRC paid Bonnie Hale another $35,000. In all, $1,797,00.

The lawsuit also alleged that a $400,000 loan used to buy Don and Dixie Hale's $1.5-million home in Brentwood, was written off while $490,000 went to a trust set up for Dan Hale, and that HRC's bank accounts were also used to pay "numerous personal expenses" including the Hales' homeowners' association dues, traffic tickets, dental bills, and satellite and cable TV bills.

Last March, after NewsChannel 5 Investigates reported that the A.G.'s office had opened its investigation of HRC, the company suddenly announced that its founder, Dan Hale, had retired and no longer had any ties to HRC. But, the A.G said that wasn't true.

After learning of the state's investigation into HRC, the complaint said Dr. Hale set up a special trust to intentionally hide his continued role with the company and the fact that he was still being paid some $27,000 a month.

Then last fall, HRC announced it had sold its 37 clinics around the country.

Charlie Cannata and his wife, both former HRC managers, told NewsChannel 5 Investigates they'd bought the Nashville office which became Bella Vita Medical.

"Bella Vita is not HRC. We operate differently," Cannata explained.

However, the attorney general has maintained the only thing that changed was the name at the Nashville office and other former HRC clinics.

The A.G. said the Hales did not sell the clinics, but instead simply transferred them to hide the fact that there were still involved in running the company and receiving part of the profits.

According to the attorney general, HRC stopped paying most of its bills last year and is in the hole more than $1.5 million.

The state just got a temporary restraining order freezing all personal accounts of the Hales and their wives, and hopes to recover any money that belongs to HRC which could eventually go to HRC patients.

Both sides will go before the judge next week.

NewsChannel 5 Investigates did reach Dan Hale Friday by phone, and he said he had no comment.

Criminal charges have not been ruled out in this case.

To see HRC's Amended Complaint click here.

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