Former Partners Accuse Embattled Hospital Owner of Siphoning Revenue For Personal Gain

A $109,751 transfer with the memo line “baptism” wired to a luxurious Beverly Hills hotel. A lease payment to a BMW dealership for a Rolls-Royce, a car that starts at about $370,000. Millions squirreled away to a family trust fund. 

These are among the financial transfers California-based hospital executive Mike Sarian allegedly made from corporate accounts to fund unauthorized personal expenses, his former business partners assert in recent court filings. 

Sarian’s American Healthcare Systems owns Randolph Health in Asheboro, which The Assembly reported on last week, as well as three other hospitals in Illinois and Texas. He is also a majority owner of 14 others in Louisiana, Florida, California, and Texas through two other companies. Earlier this year, Sarian’s former colleagues, Faisal Gill and Dr. Aramais Paronyan, ousted him as CEO from all three companies on suspicion of financial fraud. Sarian challenged his firings, but district judges in Florida and California have blocked him from regaining access to two out of three companies.

Sarian retains majority ownership of all three companies. He has maintained control over American Healthcare Systems, which his former colleagues are contesting in a lawsuit in Nevada, where the parent company is headquartered. 

Sarian accuses his former colleagues of staging an illegal coup to seize his businesses. In a statement on Monday, Sarian said he will vigorously defend himself against the latest allegations, which he said are based on “lies and made-up stuff.” 

Sarian said he’s used more than $5 million in personal funds to help run American Healthcare Systems’ hospitals and meet payroll, and without his support, it would go out of business. He accused Gill of trying to take over his company. “He is trying to attack me and my family,” Sarian said. 

Sarian bought Randolph Health in a 2021 bankruptcy auction for $10.2 million with the help of a $12 million loan from Randolph County. 

The county used a state loan program and intended to pay off the debt as an incentive to buy the distressed hospital. Commissioners forgave $1.1 million of Sarian’s debt in 2024, but they formally asked him last summer for at least $3.3 million back, accusing him of violating key loan terms. 

County Manager Zeb Holden said Randolph is owed $11.3 million in total. While the county could place a lien on the hospital facilities, it otherwise has little leverage to demand repayment, since its ultimate goal is to keep the hospital open. 

As we reported last week, an independent committee warned local and state officials of red flags from Sarian’s past in 2021, but the politicians—including a representative of state Senate leader Phil Berger—quietly lobbied for him to get the money anyway because they were desperate to save the hospital. 

In the state loan application process, Sarian failed to disclose the ownership stake of one of the business partners he is now battling, Paronyan, who initially owned half of American Healthcare Systems. Paronyan was arrested for Medicaid fraud in 1998 and later paid the government $10 million to settle the case. 

Sarian’s former business partners filed more allegations in lawsuits in Nevada and Florida shortly after The Assembly published its findings. The new filings include written testimony from Randolph Health’s former CEO Tim Ford, whom Sarian fired in March. 

Randolph Health was the first hospital Sarian purchased, and Ford served as his first local lieutenant. In a June 12 legal declaration in a lawsuit in Nevada, Ford alleges Sarian directed him to ignore invoices as they became due. Ford says Sarian directed him to transfer money to other hospitals and corporate accounts, in violation of a loan agreement with KeyBank, a national lender. KeyBank sent Randolph Health a $50 million default note in April.

Sarian “continuously refused to invest in capital expenditures for Randolph Health, despite recurring roof leaks and HVAC failures, among many other needs,” Ford wrote in his declaration. The landlord of Randolph Health’s medical clinics threatened to evict them for nonpayment, Ford asserts, and the hospital’s past due bills regularly exceeded $13 million. Randolph Health is American Healthcare Systems’ most profitable hospital because of the government funding it receives, according to recent filings; most patients there rely on government-supported health insurance.

Ford says he was placed on administrative leave in March after he refused to transfer $250,000 from Randolph Health to a corporate parent account after Gill warned him about the “risk of misappropriation of funds” by Sarian. Ford said that he acted in the best interest of the hospital and that Sarian made the transfer after he wouldn’t. 

In an interview with The Assembly earlier this month, Sarian said he fired Ford and another financial executive, who was escorted off the hospital’s property in March, for aligning with his foes. 

“Loyalty is No. 1 with me,” he said. “Anything disloyal, I will not allow it.”

In the interview, Sarian also defended his practice of transferring funds between hospitals within the corporate system, a concern local officials in Asheboro flagged early into his tenure. County commissioners were uneasy that money from Randolph Health was used to purchase another distressed hospital in Missouri, but Ford reassured them in 2024 that the funds “had been returned.” 

“Look, there is nothing illegal about it,” Sarian told The Assembly. “It’s a system, for God’s sake.”

He conceded he grew his company too quickly, but said the financial strains never impacted patient safety or hospital quality. 

In last week’s filings, Bianca Defilippi, the former CEO of Vista Medical Center, a hospital in Illinois, testified that Sarian directed her to ignore invoices from pharmaceutical and blood bank suppliers in January 2024, when supplies were dangerously low. The previous month, he had transferred $1.6 million from Randolph Health to personal bank accounts, his former colleagues allege. They also said he withdrew $125,000 in cash days after telling Defilippi to ignore the invoices.

Defilippi also accuses Sarian of systematically intimidating emergency physicians into admitting more patients and reducing the number of patients under observation, which led to resignations. 

Hospitals receive more money from insurance companies, including the government, when patients are admitted as inpatients rather than observed short-term. When Sarian led hospital operations for Prime Healthcare in California, prosecutors similarly accused the firm of routinely admitting patients beyond medical necessity to boost government payments. The firm settled with the Department of Justice for $65 million in 2018. 

In the latest filings, Sarian’s former business partners included the examples of personal expenses to bolster their claims that his financial transactions were fraudulent. In their previous legal arguments, they tallied the amount they said Sarian siphoned out of American Healthcare Systems into accounts he controlled at nearly $54 million, but they had not offered line-item examples of improper expenses. 

The new filings allege Sarian made financial transfers to relatives who did not work at the firms. They also include emails showing Sarian declining to pay vendors, bank records, and a copy of the wire transfer for the baptism that was sent to the hotel in October 2025. In December 2025, Sarian posted on social media about his baby’s baptism at the same hotel.

Sarian has argued that the contested transfers were ordinary and above-board. He says his businesses provide an essential service of keeping open hospitals that no one else wants.