CHAPTER 1

How Dr. Nguyen Lived (and Kept) the American Dream

Binh Nguyen (pronounced “win”) was born in Vietnam in 1970. He does not know how he lost his parents, other than that they were killed in the war. His only childhood memories are of an orphanage run by an order of nuns. When Binh was eight years old, he was adopted by a family who lived about as far from Bien Hua, Vietnam as one could possibly get: Anaheim, California.

Betty and Jack Brown made two decisions regarding Binh’s name. They decided that his teachers and classmates in Anaheim might have trouble with “Binh,” so he became “Ben.” They also decided that, to honor the memory of Ben’s parents, he would keep his Vietnamese surname. The biggest concern they had on the day they brought Ben home to California was that he would not be able to digest American food. He dispelled that concern the next morning as he dove into a bowl of oatmeal.

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There was nothing remarkable about Ben’s childhood in Anaheim in the 1980s. Jack, a construction contractor, could afford to send Ben to private schools. Ben had a quick mind and a winsome smile; he was five feet two inches tall, and his female teachers wanted to cuddle him. He made friends easily. He was too small and too frail for sports, but he played the clarinet in the band and was president of the Photography Club. When Ben was about 14, he announced that he was going to become a doctor and that was that. Stanford was followed by UCLA Medical School, an internship, and finally his own family practice in Garden Grove, less than a mile from where he had his first bowl of cereal on that first morning in America.

Ben was somewhat apprehensive that first day he opened his family practice clinic. After all, he would be competing with doctors who did not have a strange last name and who were manifestly not Asian. In order to spread the word that he was open for business, he joined everything: the Rotary, the Garden Grove Chamber of Commerce, Toastmasters, any group that had people who might become patients or refer patients. He handed out business cards for “Dr. Ben.” That winsome smile didn’t hurt, either.

Soon Ben realized that if you stayed open for business nights and Sundays and if you treated people with a smile, they would keep coming back and would refer their friends as well. Many of his patients were on public assistance; many were immigrants such as he. The record keeping could be a nightmare, but it was fun and rewarding. “You nice man, Dr. Ben,” he kept hearing them say.

Jennifer McCarthy also thought he was a nice man. The blondest, bluest-

eyed woman who ever attended UCLA rewarded him with two equally blonde,

blue-eyed daughters. “I’m a long way from Bien Hua,” he used to think.

By the time Ben had been in practice for six years, it was more than he could handle himself. So he bought a medical building, hired two associate doctors, and rented the space he wasn’t using to other doctors. He and Jenny were both savers. If something was not absolutely necessary for the practice or the girls, it wasn’t bought, and what was left over went into the stock market.

One of his patients, Mrs. Chan, owned a 20-unit apartment building she

wished to sell. “You buy it, Dr. Ben. You make lots of money on it. I guaran

tee.” And he did. It was enough to move Jenny and the girls into a $2 million

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house on five acres in Anaheim Hills. The best thing by far about the house was the terraced back yard that he turned into an arboretum. He would lead guests through the expanses of flowers, trees, and shrubs, pointing out the varieties. After a long week at the office, nothing was better therapy than being alone with some pruning shears or a water hose. It didn’t get better than that.

Dr. Nguyen was active in the Orange County Medical Society. One night, following a seminar, he and a few other doctors were sitting around chewing the fat. One of the older doctors, Dr. Phil Shohet, mentioned that one of his former partners—an anesthesiologist—had been sued for medical malpractice. A patient had died on the operating table, and his family had sued the surgeon, the hospital, the referring physician, and Dr. Shohet’s partner.

“But why the anesthesiologist?” asked Dr. Nguyen.

“They sue everybody. The more defendants there are, the more is available when they start settling the case,” replied Dr. Shohet.

“What happened?” he asked.

“They settled it. But my partner had to dig real deep. Cost him a cool quarter-million. It put off his retirement.”

“But what about the malpractice insurance? That’s why we buy it,” said Dr. Nguyen.

“Not enough,” said Dr. Shohet. “He carried only the minimum coverage. The dead guy was some big-time investment banker who was only in his forties. They figured that if the jury found that there was negligence, the award could come into the tens of millions. It could have wiped everyone out.”

“They could have taken his home?” asked Dr. Nguyen.

“They would have started with his home,” replied Dr. Shohet.

There was a long silence. Then Dr. Nguyen said, in a very low voice: “Wow. It’s a good thing I’ve never been sued.”

“You’re due, kid,” said Dr. Ray Katz. “Everyone with a little dough becomes a target sooner or later. It’s just a matter of time. That’s why you gotta plan ahead.”

“How?” asked Dr. Nguyen.

“Didn’t you ever hear of the Cayman Islands, or the British Virgin Islands? What do you think those places are for?”

“But you can’t put your home into the Cayman Islands, and I own an

apartment building. I can’t put that into the Cayman Islands,” said Dr.

Nguyen.

“Look,” said Dr. Katz. “I don’t know what they do, but they do it. Trusts.

Limited partnerships. Whatever. But by the time you’re done, they can’t

touch your assets. Why do you think they call it ‘asset protection?’”

“Do you know of such a person?” asked Dr. Nguyen.

“I more than know one,” replied Dr. Katz. “You won’t find my name on

any assets. Anyone who sues me can go pound sand. I’ll fish out the guy’s card

in the morning and call you.”

“Thanks,” said Dr. Nguyen.

On the drive home, all Dr. Nguyen could think of was his garden. He could not imagine that anyone could take it. He had assumed that the painfully high malpractice insurance premiums at least gave him the assurance that no one could touch his home, his investments, or his savings. Now he was not so sure at all.

Two weeks later, Dr. Nguyen met with Frank Gad, an attorney in Santa Ana who specialized in asset protection—the name on the card. For the first hour, Gad did nothing but ask questions. He asked where Jenny worked (she didn’t, since she was still home with the girls), whether there were any pending lawsuits, the state of Dr. Nguyen’s estate planning (he had to admit he did not even have a will), even the strength of his marriage. He then delved into Dr. Nguyen’s assets in minute detail, even asking whether Jenny had also signed the bank guaranty on the medical building (he couldn’t remember).

After an hour, the suspense was killing Dr. Nguyen. “Mr. Gad,” he said, “I understand that we can move my cash and stock portfolio to a foreign country. But you can’t move my home to the Cayman Islands and you can’t move the building my practice is in to the British Virgin Islands or wherever. What can you do to protect the assets that I care about the most?”

“I was just getting to that,” Gad said.

For the next hour, Frank Gad laid out a plan to ensure that if a lawsuit hit,

the plaintiffs could not get at any of Dr. Nguyen’s assets. And before a month

had passed, they had fully implemented the plan.

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At the time of the meeting with Frank Gad, Dr. Nguyen’s clinic had grown to 11 employees. In addition to the two other doctors, Dr. Nguyen employed five nurses and medical technicians, a receptionist, an office manager, and a billing clerk. Just as all of his patients loved him, so did his employees. He paid as well as anyone. Once a year he took the whole office to an Angels game. The Christmas party was a fun event for everyone, including some of his patients who would know no Christmas but for the party. But shortly after the meeting with Frank Gad, he hired a nurse, Angela Venizelos, who seemed a little strange. Dr. Nguyen heard her asking questions about him and Jennifer. She always seemed to be poking around where she didn’t belong. She wasn’t so much a bad nurse as an uninterested nurse. To work in a small family practice, you had to be a “people person,” and she wasn’t. For the first time in his medical career, Dr. Nguyen had to fire an employee.

Dr. Nguyen dreaded the interview in which he had to inform Ms. Venizelos that he was letting her go. His fear of hurting her feelings caused him to make a mistake. Rather than simply inform her that she was not working out, he lied and told her he was downsizing the office.

“I don’t believe that for a second,” she said, with a vehemence that surprised Dr. Nguyen. “I know the real reason you’re firing me.”

“You do?” said Dr. Nguyen, unable to hide how defensive he felt.

“Sure. I’m not like the other nurses around here. For starters, I’m not going to put out for the doctors,” Ms. Venizelos said, referring to the fact that one of his doctors was openly dating one of the nurses. “And another thing: I’m not going to spill out of my uniform just to please the patients.” This was a pointed reference to one of the other nurses. “And I really don’t appreciate Dr. Atkinson’s little jokes and innuendos.” He had no idea what this referred to. “So you can take this job and shove it. But I’m not going to take this lying down.” And with that, she stormed out.

Dr. Nguyen was a little shaken by what he had heard. He thought his office was one big happy family. What else was going on under his nose that he didn’t know about?

If the interview shook him, the certified letter from Miller, Hoskins, Leavitt & Brown, LLP stunned him. In three single-spaced pages, it informed him that the firm had been engaged by Angela Venizelos to represent her in her wrongful termination claim against him, a claim based upon sex and age discrimination, sexual harassment, and “retaliatory firing.” The letter claimed that Dr. Nguyen’s office fostered a “climate of discrimination,” as evidenced by the fact that nurses could advance only if they provided sexual favors to the doctors, and were terminated if they refused. Ms. Venizelos claimed that the discrimination of which she was a victim had caused her pain and suffering, humiliation, depression, anxiety, fear, and apprehension, as well as having damaged her career as a nurse. Her lawyers informed Dr. Nguyen that if they were successful before a jury of Ms. Venizelos’ peers, they were confident that they would be awarded $2 million in compensatory and punitive damages. They informed Dr. Nguyen that, under California law, even if they collected only one dollar on their claim for wrongful termination, Dr. Nguyen would have to pay all of her attorney’s fees, which could run to $200,000. Finally, they reminded Dr. Nguyen of what the publicity involving a sexual harassment lawsuit might do to his reputation and his medical practice.

With all this in mind, Miller, Hoskins, Leavitt & Brown, LLP was willing to let Dr. Nguyen off easy. If he would write them a check for $60,000 within the next ten days in full settlement of all of Angela Venizelos’s claims, they would not file the lawsuit they had already prepared on her behalf, and Dr. Nguyen could resume his life, a little poorer and a lot wiser.

Dr. Nguyen felt as if he had been punched in the stomach. The letter lit

erally took his breath away. The next thing he did was show the letter to his

staff. They could not hide their shock and anger.

“You? Sexually harass anyone? You’re the last person anyone could accuse of that, Dr. Ben,” said one of the nurses.

“Don’t you worry, Dr. Ben, we’re all behind you,” said another. “You’ve

got nothing to worry about. She was a lazy, rotten nurse and we’ll all testify to

that.”

Dr. Nguyen felt a little better. Acting on a referral from another doctor,

he made an appointment to meet with Ronald Fink, a well-known employ

ment lawyer in Los Angeles. But the first thing he learned was something he

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had suspected: he had no insurance coverage for a sexual discrimination claim. He would be paying Ron Fink from his own pocket, at the rate of $400 per hour.

What was worse, Ron Fink asked him some pointed questions for which he had no answers. “Do you maintain an employee manual?”

“A what?” replied Dr. Nguyen.

“A book that all the employees must read informing them that sexual discrimination is absolutely prohibited in the office, and that anyone who suspects that he or she is a victim of it must report it immediately, giving the name of the office administrator to whom all complaints must be reported.”

“No, I don’t.”

“Do you have any rules posted regarding inappropriate conduct?” asked Ron Fink.

“No. We’re a medical clinic, not a locker room.”

“I realize that. But the absence of these things will definitely be used against you. It’s great that all of your employees are willing to stand by you, but it’s not a guarantee of success. Let me tell you about Miller, Hoskins, Leavitt & Brown. They’re the real instigators of this claim, not the gal you fired. They specialize in this. She probably went in there asking if she could collect some termination pay, and they filled her head with stuff about being the victim of age and sex discrimination because one of the other nurses was dating a doctor and she wasn’t. They’ll get at least half of whatever she collects. They’ll be delighted to split sixty grand with her for writing a letter.”

“But I shouldn’t have to pay her anything. I didn’t do anything wrong.”

“Fine,” said Ron Fink. “We’ll fight them tooth and nail. But there are no guarantees as to what a jury could do. You’re a wealthy guy, and sometimes juries like to play Robin Hood. You never know. Just as a precaution, I think you should consult with an asset protection specialist.”

And suddenly, the clouds parted and the sun shone through. “I’ve already consulted an asset protection specialist,” said Dr. Nguyen. “Frank Gad in Anaheim. As far as he is concerned, all of my assets are already protected.”

“That’s great,” said Ron Fink. “It’s all I need to know. I’ll give the slime-balls at Miller, Hoskins and Company a call. I’ll tell them I’m on the case, and that there aren’t any assets to go after even if they win. Maybe we can head this off at the start.”

Unfortunately, Ron Fink was not able to avoid a lawsuit. One of the first things that Miller, Hoskins, et al. did after Angela Venizelos visited them was to conduct an asset search of Dr. Nguyen. They liked what they found: a multimillion-dollar home, a multimillion-dollar apartment building, a successful medical practice housed in a building Dr. Nguyen owned, and cash to an extent they could only imagine. They simply didn’t believe that there were no assets to go after.

Months went by, and Dr. Nguyen heard nothing about the lawsuit. He did have to show up at the Miller, Hoskins offices for his deposition. He was sworn in by a court reporter, and spent the better part of the day answering questions about his employment practices. The only embarrassing thing was having to confess that he lied to Angela Venizelos about why he had fired her. Dr. Nguyen protested that he was only trying to spare her feelings, but it came out sounding like he had something to hide. He had no answer when they said, “You were lying then. How can we be sure you’re not lying now to protect your assets?”

Dr. Nguyen was surprised to learn that investigators were knocking on his current and former employees’ doors at night, inquiring about how he ran his office. They intimated that if the employees had anything against Dr. Nguyen, they too could become plaintiffs in the lawsuit. It wouldn’t cost them anything. If an employee told an investigator that he or she didn’t have anything bad to say about Dr. Nguyen, the investigator became insistent, reminding the employee that there was real money in it for anyone who joined the suit, and they wouldn’t even have to come to court, since the more people who joined, the less chance there was of it going to trial. Some employees were contacted more than once.

More than a year after the case was filed, and approximately six months before the date of trial, the judge ordered that the parties attend a mediation. Ron Fink explained to Dr. Nguyen that a mediation is an informal meeting designed to produce a settlement. The mediator would have no power to order either side to do anything. It was merely an attempt to point out to each

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side the weaknesses in their case, with a view toward getting each side closer to the middle.

After going back and forth all day, Ron Fink said he wanted to meet faceto-face with the mediator and Mike Miller, Angela Venizelos’s attorney.

“Look,” he told Miller and the mediator, “There’s an aspect of this case you really ought to consider. The defendant has no assets. There’s nothing to go after. If you lose you lose, but even if you win, you still lose. You’re looking at an empty pantry.”

“That’s not what my asset search reveals,” said Miller.

“Here’s what your asset search should reveal, if you looked a little closer,” said Fink. “Dr. Nguyen doesn’t own his home. His wife owns his home.”

“It’s still community property, no matter whose name is on the deed,” said Miller.

“Wrong again,” said Fink. “Dr. Nguyen and his wife entered into a transmutation agreement, changing their assets from community property to their separate property. And the house isn’t even in Jennifer’s name anymore. She transferred the house into a qualified personal residence trust.”

“Sounds like a fraudulent conveyance to me,” said Miller.

“Check your files,” replied Fink. “The transmutation agreement and the QPRT were all done well before your client got it into her head to sue Dr. Nguyen. I wouldn’t want to hang for as long as it will take you to prove that this was a fraudulent conveyance.”

“Well, his wife couldn’t take all the assets and leave him with nothing. That would be a fraudulent conveyance,” said Miller, but without much conviction.

“She didn’t,” said Fink. “Dr. Nguyen got the office building and the apartment building. But he doesn’t own those assets anymore either. They’re owned by a limited liability company. Lots of luck getting at those properties.”

“Dr. Nguyen leads a pretty good life. He’s got to have assets. We’ll take a debtor’s exam and find out where the assets are.”

“You don’t have to take a debtor’s exam. I’ll tell you right now where the assets are,” said Fink, warming to his subject. “Dr. Nguyen was the settlor of a trust located in the Cook Islands, which is located in the South Pacific. The trust owns a company that is located on the island of Nevis, which is located in the Caribbean. The Nevis company maintains a bank account in a private bank in Switzerland. You’ve heard of Switzerland, haven’t you, Mike?”

There was a silence. Then the mediator said, “I would like to speak with Mr. Miller privately.”

The mediator reminded Miller that the case was weak on Dr. Nguyen’s liability in the first place. Considering the time that Miller would have to put into preparing the case, and the likely outcome, not to mention the chance of collecting anything if they won, Miller, Hoskins might more profitably devote its resources to another case.

“I’ll tell you what I’ll do for you,” said the mediator. “I’ll twist the defen

dant’s arm to cough up a few bucks so that you can save some face with your

client.”

So Angela Venizelos did not receive nothing, but what she received was considerably closer to nothing than it was to $60,000.

About six months after the settlement, Dr. Nguyen attended another medical society luncheon. During the course of the lunch, he met a young doctor who told Dr. Nguyen that he was starting to make some money and was afraid of lawsuits.

“Write down your phone number,” said Dr. Nguyen. “I’ll call you in the morning. I’m going to give you Frank Gad’s phone number.”

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