Mike Sarian, founder and majority owner of multiple hospital companies spanning more than a dozen hospitals across several states, is facing a widening series of lawsuits alleging he diverted millions of dollars from hospital operating accounts, shifted funds among facilities and used corporate money for personal expenses.
The allegations, outlined in recent court filings in Florida and Nevada, paint a picture of centralized financial control that plaintiffs allege left several hospitals struggling to pay vendors, physicians, payroll taxes and employee benefits while millions of dollars were transferred to accounts controlled by Mr. Sarian or his family trust, The Assembly reported June 19. He was ousted as CEO earlier this year on suspicion of financial fraud.
In an interview with Becker’s, Mr. Sarian has denied all allegations, calling them false and part of an effort by former business partners to seize control of his companies.
The legal battle now spans courts in Nevada, Florida and California and involves governance disputes at multiple healthcare organizations, including Glendale, Calif.-based Healthcare Systems of America, American Healthcare Systems and NOR Healthcare Systems.
According to a complaint filed June 11 in Miami-Dade County Circuit Court, HSA and five affiliated Florida hospitals allege Mr. Sarian abused his authority as chair and CEO by transferring hospital operating funds to personal accounts, the Sarian Family Trust and related entities while hospitals faced mounting financial pressures.
The complaint alleges Mr. Sarian diverted at least $14 million from HSA corporate accounts between September 2024 and January 2026. Plaintiffs allege those transfers impaired hospitals’ ability to meet payroll, pay vendors, purchase supplies and satisfy regulatory obligations.
Among the examples cited in the complaint is a $109,751 wire transfer allegedly used to pay for a family baptism celebration in Beverly Hills, Calif., along with numerous transfers to personal and family trust accounts. Plaintiffs also allege Mr. Sarian transferred more than $1.2 million to personal accounts within one day of the company receiving acquisition financing intended to support hospital operations.
The Florida lawsuit seeks damages, restitution and an accounting of the funds. The allegations have not been proven in court.
Separate litigation filed in Nevada by American Healthcare Systems shareholders Faisal Gill and Aramais Paronyan, MD, alleges similar financial misconduct involving American Healthcare Systems, which operates Randolph Health in Asheboro, N.C.; Gateway Regional Medical Center in Granite City, Ill.; Vista Medical Center East in Waukegan, Ill.; and Sherman Medical Center in Sherman, Texas.
According to court filings, plaintiffs allege Mr. Sarian required personal approval for virtually all payments exceeding $5,000, creating bottlenecks that delayed payments to physicians, vendors and taxing authorities while directing hospitals to transfer operating funds into a centralized corporate account that only he controlled.
The filings allege that after funds reached the corporate account, substantial sums were transferred to accounts associated with Mr. Sarian, including his family trust. Plaintiffs cite bank records they allege show repeated transfers from Randolph Health into the corporate account followed by same-day transfers to the Sarian Family Trust.
Former Randolph Health CEO Timothy Ford, who was fired by Mr. Sarian in March, according to The Assembly, alleges in a court declaration that Mr. Sarian routinely directed hospital leadership to transfer millions of dollars from Randolph Health to other hospitals within the system, the corporate parent and, in some cases, HSA entities while limiting payments to vendors and deferring maintenance. Mr. Ford alleges Randolph Health’s accounts payable eventually exceeded $13 million and that he was placed on administrative leave after refusing to authorize another transfer from the hospital.
Former Vista Medical Center CEO Bianca Defilippi alleges Mr. Sarian’s centralized approval process delayed payments for blood products, pharmaceuticals, physician coverage, payroll taxes, employee health benefits and medical malpractice insurance. She alleges those financial decisions contributed to Illinois Department of Public Health findings that placed the hospital in immediate jeopardy and preceded Vista Medical losing its Level II trauma designation in February 2024. The hospital later regained the designation.
Court filings also allege Illinois supplemental funding intended to support hospital operations was redirected to other purposes, including a proposed acquisition of Prospect Medical Holdings hospitals in California, while payroll tax obligations remained unpaid.
Plaintiffs further allege hospital funds were commingled with Mr. Sarian’s personal finances, citing payments for a Rolls-Royce lease, transfers to family members and repeated transfers between corporate accounts and his family trust.
The lawsuits also describe broader governance disputes among Mr. Sarian, minority shareholder Dr. Paronyan and former general counsel Faisal Gill over control of the companies. Court filings indicate Mr. Gill and Dr. Paronyan removed Mr. Sarian from leadership roles at HSA and NOR Healthcare Systems after alleging financial misconduct. Litigation continues over whether similar actions involving American Healthcare Systems were valid under Nevada corporate law.
Mr. Sarian strongly disputes the allegations.
In an interview with Becker’s, Mr. Sarian characterized the lawsuits as an attempt by former business partners to wrest control of companies he said he founded and financed.
“There’s absolutely no truth to what they’re saying,” he said. “It’s just a pure attempt by them to steal the company away from me.”
Mr. Sarian said moving funds among hospitals was a common cash management practice for a rapidly growing health system operating distressed hospitals and denied taking money improperly.
“We did move monies around from different hospitals. There’s nothing wrong with that,” he said.
He also said he has personally contributed millions of dollars to keep hospitals operating and meet payroll obligations, including recent funding for hospitals in Illinois.
“I put in more money than I took out,” Mr. Sarian said. “The company still owes me money.”
Mr. Sarian also said compensation previously approved by the board remains unpaid and that he personally guaranteed loans used to acquire several hospitals.
The governance dispute has expanded beyond Nevada and Florida.
Attorneys representing Mr. Sarian filed an amended complaint on June 23 in California alleging Mr. Gill and Dr. Paronyan orchestrated an unlawful effort to seize control of his businesses through coercion and corporate misconduct. That lawsuit alleges diverted insurance payments, unauthorized financing transactions and other actions after Mr. Sarian’s removal from leadership.
“I built these hospitals over decades, and I have done everything in my power to protect them, the patients and employees who depend on them, and my family,” Mr. Sarian said in a June 25 news release shared with Becker’s. “These allegations are now before the courts, and I am confident the facts and the records will speak for themselves.”
Several courts have issued temporary orders affecting corporate control while litigation proceeds. None of the courts has issued findings on the merits of the competing allegations.
The litigation comes as hospitals involved in the dispute continue operating across North Carolina, Illinois, Texas, California, Florida and Louisiana.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
