Ex-CFO's attorney: Sonoma West Medical Center benefactor said ‘cook the books’

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The former chief financial officer at Sonoma West Medical Center said a key hospital benefactor asked him to “falsely portray” the hospital’s finances to show positive net profit for the hospital, according to a whistleblower lawsuit filed this week.

The lawsuit against Sonoma West Medical Center was filed Monday by Douglas Goldfarb, who served as chief financial officer from Nov. 30, 2015 to June 6, 2016. It is the latest legal complaint against the embattled hospital, one that echoes charges made in a lawsuit filed two months ago by the hospital’s former chief nursing officer, Cheri AnDra.

As Sonoma West Medical Center officials said with AnDra’s lawsuit, they could not comment on the legal challenge because it involved personnel matters. Both Goldfarb and AnDra are represented by the same Bay Area attorney, Daniel Bartley.

The suits allege millionaire west county software entrepreneur Dan Smith, the hospital’s largest donor and most consistent financial supporter, is using the hospital as a testing ground for his “defective” tablet-based electronic medical records system called HarmoniMD.

Smith, who is president of the medical center’s board of directors, wrote in an email that he legally was unable to speak about personnel matters cited in a lawsuit. In the past, Smith has dismissed accusations he is seeking to profit from the hospital, citing the millions of dollars he has donated or loaned the hospital over the years, including a $3 million donation earlier this summer.

AnDra and Goldfarb argue the cloud-based electronic medical records system often produced serious errors that “endangered patients lives.” The two executives claim their concerns about the records system led to retaliation and ultimately their forced departures.

But Goldfarb’s complaint went farther. Bartley said Goldfarb was asked to “cook the books” to show the financially strapped hospital was doing better than it was.

The hospital recently announced a 16 percent reduction in its full-time staff. The layoffs were all administrative positions and no patient-focused nurses were affected.

“He objected to unlawful conduct, and as a consequence he was fired,” said Bartley, Goldfarb’s attorney.

Goldfarb did not speak to The Press Democrat for this story. Bartley said Goldfarb has chosen not to speak to the press about his lawsuit.

In paragraph 22 of the 14-page complaint, Goldfarb states that he was “expected to tolerate, and participate” in unacceptable accounting and record-keeping practices.

“Smith attempted to coerce me to understate contractual adjustments to reflect a break-even or positive operating profit and/or losses,” the lawsuit states. “Smith ardently attempted to have me falsely portray the hospital as having a positive operating profit.”

Goldfarb did not acquiesce to pressure to alter the hospital's financial statements, Bartley said.

Jim Maresca, president of the board of directors of the Palm Drive Health Care District, which provides significant financial assistance to he hospital and has oversight responsibilities, also declined to comment on the lawsuit, citing “pending litigation.”

Goldfarb’s lawsuit seeks financial “relief” for lost wages and future compensation, as well as punitive and compensatory damages and court costs. Bartley said the case could be settled by the hospital paying Goldfarb about years’ pay in severance and legal fees, about $250,000. “If they go to court it will be a lot more,” Bartley said.

You can reach Staff Writer Martin Espinoza at 707-521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @renofish.

EDITOR'S NOTE: An attorney for Douglas Goldfarb said his client was pressured to "cook the books." An earlier version of this story incorrectly attributed that quote to Goldfarb. This story has also been updated to clarify that Goldfarb did not speak to The Press Democrat for this story, and, to add his attorney's assertion that Goldfarb did not acquiesce to pressure to misstate the hospital's financial statements.

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