Critical Condition

AIDS researcher of high repute. Proprietor of a glamorous Miami Beach spa. Target of a federal criminal probe. The many sides of Dr. Lionel Resnick.

The scene was, as Mike Wallace would later recall, "most bizarre." The legendary newsman had come to Miami Beach this past June to work on a 60 Minutes segment about David Acer, the Jensen Beach dentist widely believed to have infected six of his patients with HIV before he died in 1990. Suspecting that Acer might have been falsely accused, Wallace was in town to interview Dr. Lionel Resnick, a prominent AIDS researcher who shared this controversial opinion.

After the interview, filmed in Resnick's office off Arthur Godfrey Road, the doctor had a request. Would Wallace say hello to his family? Sure, Wallace said, and the pair descended to the ground floor, cameramen bustling after them, and re-entered the building through another door.

In a tiny, ornately appointed room, Wallace was confronted by a dozen onlookers, all gawking expectantly. Some sipped cocktails from plastic cups, others gnawed at carrot sticks. Several, Wallace noticed, were holding cameras.

An elderly gentleman who shared the AIDS doctor's drooping nose and high forehead immediately pressed close to Wallace and introduced himself as Abe, Lionel's father. The former Miami Beach commissioner spoke of his experiences in World War II, and urged Wallace to visit the nearby Holocaust Memorial he had helped create. Next came Lionel's wife Fern, a petite blonde. Behind her, the guests with drinks milled awkwardly, while those with cameras began timidly snapping photos.

"The whole thing seemed off the wall," Wallace recalls, chuckling at the memory. "Here was this man I had just interviewed in his capacity as a leading AIDS expert, and he was dragging me to the opening of some sort of beauty salon his family had opened. I didn't get it."

Understandably. What Wallace had actually wandered into was a cocktail reception in his honor, a party thrown by Lionel Resnick's publicist in order to lure other journalists to Imagen, the upscale spa the doctor had launched six months earlier. The 60 Minutes star, in other words, had been used as bait.

Had he been aware of this bit of manipulation, Wallace, like the other reporters in attendance, might have been given pause to ponder this fellow, Lionel Resnick. But that is not what happened at all. Instead, Wallace beat a hasty retreat. A few days later, the 60 Minutes piece aired, with Resnick starring as the scientist brave enough to challenge the hasty conclusions drawn about David Acer. "What we see in the field of HIV is that sometimes if you run too fast, you could trip," Resnick warned.

The report spurred a buzz of protest in the AIDS research community (see accompanying sidebar). But in South Florida, Resnick's featured role afforded the 40-year-old doctor the status of local hero. Especially in his hometown of Miami Beach, where the appearance gave a welcome salutary boost to the Resnick family name A a name that had been sullied over the years by repeated allegations of unethical behavior on the part of Lionel's brother Jimmy and millionaire father Abe. This Resnick, it seemed clear, was a man of wisdom and unimpeachable morality.

And like a shred of toilet paper stuck to a movie star's shoe, the bizarre cocktail party was quickly forgotten.

That is, until Lionel Resnick tripped.
The misstep: Resnick, chief of the Retrovirology Research Laboratory at Mount Sinai Medical Center since 1985, had used the publicly funded facility to perform private work for which he was paid hundreds of thousands of dollars. No sooner had that fact come to light than he further aroused suspicion by sneaking into his own lab and attempting to destroy his records before auditors could inspect them.

The imbroglio has led to a flurry of finger-pointing and has cast a pall of doubt over the University of Miami's renowned AIDS research program, which during the past several years has paid Resnick to conduct much of its scientific testing. Three weeks ago, federal prosecutors in Miami opened a criminal investigation and the FBI assigned an agent to the case. The Florida Department of Business and Professional Regulation, which oversees the licensing of physicians, is also looking into the matter. Sources close to the federal probe say a grand jury will likely be convened within several weeks to determine whether Resnick should be indicted for fraud. Investigators are also trying to determine what role was played by other Mount Sinai officials and by Dr. Margaret Fischl, UM's leading AIDS researcher.

Resnick has resigned from the staff of Mount Sinai and given up his adjunct status at UM. The university has initiated a scientific-misconduct investigation, concerned that dubious billing may mean dubious science.

Through his two attorneys, Resnick admits that he erred but maintains that the entire affair is a misunderstanding, that he is being made the scapegoat by two image-conscious institutions. "When the dust clears, investigators will not find a shred of evidence pointing toward any criminal conduct," declares Richard Sharpstein, a prominent criminal defense attorney. Sharpstein also points out that his client has agreed to make restitution and is cooperating with all investigating agencies.

Beneath all the damage control, a more revealing story remains to be told about Lionel Resnick, a story consistent with the surreal cocktail-party interlude with Mike Wallace. For in addition to being a famous AIDS researcher and a man dedicated to healing the afflicted, Resnick is also a dermatologist with financial ambitions and a flair for self-promotion. And while his virology has come under scrutiny only recently, some things he did as a dermatologist have raised questions before.

In 1990, for instance, at the dermatology clinic where he worked, Resnick sidestepped scandal after the death of another doctor's patient who had received ultraviolet light therapy. And then there is his latest venture. According to more than a half-dozen former employees and clients at Imagen, Resnick has been known to misrepresent the services rendered at the spa in order to collect additional money from insurance providers.

Defense lawyer Sharpstein says such allegations are nonsense concocted by disgruntled ex-employees and other enemies.

But even some of Resnick's defenders concede there is a sad logic to all the accusations: The family legacy of attracting controversy has finally caught up with the youngest, quietest Resnick.

If officials from UM, or Mount Sinai, or even the FBI want evidence that Resnick used his publicly funded lab for personal reward, they won't have to look hard. The doctor freely admitted as much three years ago, in a sworn deposition taken after David Acer's insurance company CIGNA hired Resnick to testify in a civil lawsuit filed by Richard Driskill, one of the dentist's HIV-infected patients.

"Tell me the parameters of what you were to be paid for this research," Driskill's attorney asked Resnick during the December 1991 deposition.

"One hundred and fifty dollars an hour," Resnick replied.
"Describe for me more specifically how your group was to be paid by CIGNA."
"Wasn't really a group that was to be paid by CIGNA per se. It was based on $150 an hour [as] my rate, and the group itself was performing as part of a research project, funded by my own research."

"So do you have people that work under you in your lab?"
"Yes. I have a number of people who work under me."
"Are they also paid $150 an hour by CIGNA if they're working on this case?"
"No. No one else in my lab is paid by CIGNA."

In fact, the equipment in Resnick's lab, and the employees he supervised, were funded with public monies, primarily federal grants. Though the money was explicitly earmarked for specific research projects, by his own admission Resnick was using these resources to pursue private research for which he alone was paid.

When Driskill's lawyers showed Resnick's statement to their own experts, the reaction was immediate. "I saw something in there that just blew my mind," recalls one, a highly respected AIDS researcher. "This guy was openly admitting that tens of thousands of dollars were going straight to his pocket, based on work being done with federal research money. When you receive a grant from the government, that's for the betterment of mankind. You're not allowed to take that money and subvert it into a private endeavor."

Resnick did not actually subvert money into a private endeavor; what he did was more complicated. The lab at Mount Sinai was funded by a system known as "direct cost reimbursement," which meant that whenever Resnick needed money A to pay for staff salaries, equipment, et cetera A he submitted a form to Mount Sinai, detailing the specific grant projects for which the outlay was needed. Mount Sinai would pay the money, then pass on the information to the grant provider for reimbursement.

By failing to note that he also was devoting lab staff and equipment to private projects for which he was paid, Resnick was not complying with federal regulations. "What he should have done was note every time he used those resources for his own business," Resnick's civil attorney Alan Kluger acknowledges. "He simply didn't realize he had to do that."

But federal investigators say Resnick's actions may amount to fraud, because when he signed off on the reimbursement forms, he was misrepresenting to the government how the public funds were being spent.

All this was obvious to the scientist who reviewed Resnick's deposition three years ago. He was so furious, he says, that he called officials at the National Institutes of Health (NIH), one of the entities that had funded Resnick's lab. But after faxing them the relevant pages of the deposition, he says, he never heard back from them.

Resnick, meanwhile, continued to conduct research, both private and public, at the Mount Sinai lab. A lot of research.

According to a preliminary audit Mount Sinai officials ordered after they discovered Resnick was using the lab for private work, the doctor billed hundreds of thousands of dollars to a variety of entities over the past five years. He conducted numerous blood tests and clinical studies for companies hoping to develop AIDS medications. Last year, for instance, he billed $105,000 to a California company called Applied Immune Sciences Inc. The audit also includes the prospectus for a proposed study for Hoffmann-LaRoche, with an estimated budget of $875,000. Additional documents indicate Resnick was working with Searle, Abbott, and other pharmaceutical firms. He also charged lawyers for providing expert testimony, often based on work performed at the Mount Sinai lab. In the Driskill case alone, he billed $182,400. The City of Miami Beach paid Resnick $43,000 for a pair of high-tech DNA tests later used to defend a suit against the city. Mount Sinai's audit shows that Resnick's biggest customer was the University of Miami. Since 1989 UM has paid him more than $600,000, most of it in federal grant money, to conduct complex blood tests and other research for Dr. Margaret Fischl.

In each case, payments were not sent to Mount Sinai or to Resnick. Instead they went to Vironc Labs, Inc. As attorney Richard Sharpstein explains it, Vironc is not a lab at all, but a private company Resnick set up in 1989 to administer his private work.

UM officials say they first grew suspicious this past April, when a bookkeeper noticed that Vironc's address was the same as Resnick's northeast Dade home. Before that time, university staffers had always assumed that the work they farmed out to Resnick was performed at the Vironc lab. After he learned that no such lab existed, Bernard J. Fogel, dean of the UM School of Medicine, called Mount Sinai president and CEO Fred Hirt to report the financial irregularity. Fearing Resnick had used the Mount Sinai lab for private business, Hirt sealed off the area and ordered the internal audit.

Early in the morning of September 22, the day the audit was scheduled to begin, Lionel Resnick and a female assistant entered the lab, broke open his computer, and jammed a screwdriver into its hard drive. They also hid several logbooks containing scientific data. With the help of computer specialists, the data was later recovered, but Mount Sinai officials were irate.

Sharpstein characterizes the break-in as a "reaction to a very stern and inappropriate action taken by the hospital against one of their noted doctors. They came in like a bunch of storm troopers and shut off his lab without giving him any idea what they wanted." The attorney maintains that Resnick's intent was not to conceal data but to protect patient identities. (Mount Sinai officials say the recovered records included no names.)

Within weeks of the ransacking, Resnick resigned as chief of the lab and as an adjunct professor at UM. He agreed to cooperate with investigators, eventually consented to reimburse Mount Sinai A which in turn will reimburse its public funding sources A for his private use of the lab, and placed $500,000 in escrow. But no one knows the exact amount owed. Resnick's attorneys put the figure at $250,000; Mount Sinai officials claim it is at least double that. Federal auditors are attempting to pinpoint the figure by reconstructing exactly what work was done in the lab.

In determining Resnick's restitution, Sharpstein maintains, his client should be credited for helping to raise $250,000 in donations for Mount Sinai through a nonprofit foundation. Sharpstein says a portion of that money was used to fund the hospital's virology lab and "should be mitigated against what they say he owes."

More interesting than the financial minutiae has been the public relations campaign waged by all sides. A scandal of this magnitude could ruin reputations and jeopardize public funding. Officials from the Inspector General's Office of the Department of Health and Human Services (HHS) are investigating the case along with federal prosecutors. HHS oversees the National Institutes of Health, the federal agency that provides the lion's share of AIDS research monies.

With professional futures and millions of dollars at stake, officials from both Mount Sinai and UM have scrambled to portray themselves as blameless victims. Privately, staffers from both entities have stressed their status as whistle blowers and blamed the other for not minding the store.

Despite protests from Dr. Margaret Fischl, who ordered and approved Resnick's work and who insists his science was sound, UM has launched an investigation into possible scientific misconduct that will eventually be forwarded to the NIH for review. UM spokesman Chris Dudley downplays the inquiry, calling it "a matter of course."

According to sources familiar with the case, however, the investigators who reviewed Resnick's records found discrepancies between the raw data entered in logbooks and the figures later entered into the computer.

"Those differences mean nothing," says Alan Kluger, Resnick's civil attorney. "As lead investigator, the doctor has the responsibility to check his data. On some of the tests, he simply disagreed with the paraprofessionals who did the original work and made a change."

More generally, criminal defense attorney Sharpstein says his client never intended to defraud anyone. "Lionel simply believed the Mount Sinai lab was his. He had built the thing with his blood, sweat, and tears. He ran it, and he generated the business. Everyone knew what he was doing there. It wasn't as if he was hiding in a dungeon. What everyone's overlooking in this frenzy to accuse is that all the work Lionel did was in the service of finding a cure for AIDS. His contributions, on that level, go beyond dollars and cents."

And if Resnick did something wrong, Sharpstein concludes, he should not shoulder the blame alone. "If all these officials were so concerned about Lionel's lab, they should have set up a more defined understanding between all the parties as to financial arrangements. I'll tell you this, everyone benefited from his work, and no one more so than Sinai and UM."

Which has not escaped the attention of federal investigators. Though their probe is just getting under way, the feds are already struggling to understand how Resnick could bill so much money to his home address, for so long, without anyone noticing. "We're looking at all the parties involved here, Fischl and Sinai included," says one investigator, who requested anonymity. "The obvious question is: 'Did Resnick have any help?'"

Federal sources say they know of no evidence to suggest that anyone at Mount Sinai or UM acted in collusion with Resnick. The evidence that supervision by both institutions was virtually nonexistent, however, is ample. Resnick's 1991 deposition in the Driskill suit is a case in point.

At one point he was asked, "Who is your supervisor at Mount Sinai right now?"

"I'm my supervisor," Resnick replied.
"Is there anybody that works or that you report to? Do you have a boss?"
"No."

Later in the deposition, Resnick discussed his billing practices. "Do you keep a logbook of how many hours you spent on this case?" he was asked.

"Not specifically."
"How do you bill CIGNA?"
"We extrapolate how much time we've kept on this case."
"How do you do that?"
"Based on the amount of time that I feel we've devoted."

Through their attorney, Joel Stocker, Mount Sinai officials refused to answer specific questions from New Times. Instead, Stocker released a blanket statement asserting that Mount Sinai "has acted diligently, appropriately, and swiftly in the matter involving Dr. Lionel Resnick" and is cooperating with all the investigating agencies.

Key UM personnel, including Dr. Margaret Fischl, initially agreed to interviews with New Times. Through the school's PR department, they later refused, citing the federal prosecutor's criminal investigation.

The university's supervision, though, appears to have been as lax as the hospital's. University officials told the Miami Herald they discovered the alleged fraud because two Vironc bills amounting to more than $50,000 were inadvertently stuck together, prompting a closer examination of the company. But the Mount Sinai audit indicates that Vironc has billed UM large sums of money A from $25,000 to $65,000 per bill A for the past four years without inspiring such scrutiny. The audit also reveals that in July 1991, a check for $25,500 intended for Vironc was sent to the wrong address. The error was eventually corrected and the check sent along to Resnick's home with no further question.

In fact, when UM accountants delved into their records, they discovered that Resnick had personally profited from work done at the Mount Sinai lab before Vironc even existed. Sharpstein confirms that Resnick deposited $30,000 to $40,000 in checks from UM into a personal account, even though the research in question was performed at the federally funded lab.

Dr. Margaret Fischl, one of the world's foremost AIDS scientists and the woman who assigned the work to Resnick, told the Herald she knew nothing about the details of his pay. Despite the fact that her name appears on the bills he sent, she said, it was the school's purchasing department that was responsible for checking into Resnick's lab before authorizing payment.

Fischl also told the Herald that several years ago she visited a Miami Beach lab Resnick led her to believe was Vironc. That lab, the Herald reported, was actually Stratogen Health, an AIDS treatment clinic Resnick helped found. Investigators are having trouble making sense of Fischl's account. State licensing records reveal that the lab at Stratogen, which opened in mid-1992, lacks the equipment needed to conduct research of the sort Fischl assigned to Resnick. Specifically, it is not licensed in virology. Investigators have also obtained a 1993 letter in which Resnick invited Fischl and her staff to a meeting at Stratogen and gave directions to the clinic. Given this exchange, they say it appears unlikely Fischl could have continued to mistake Stratogen for Vironc.

"I have to assume that Dr. Fischl was misquoted [in the Herald]," Richard Sharpstein says. "I can't imagine that she thought the work was being done anywhere other than Mount Sinai, because she was very familiar with the research."

Rather than indicating a conspiracy to commit malfeasance, the scandal seems to portray a system that is ripe for exploitation.

"When you get to the highest echelons of medical research, there's a lot of mingling of private and public money and nobody really keeping track," observes Linda Quick, president of the South Florida Hospital Association, a nonprofit trade group that represents 35 hospitals in Dade, Broward, and Palm Beach counties. "If you're a famous researcher, you may be receiving money from grants, drug companies, and foundations, all for the same basic data. So there isn't the accountability people assume there is. Especially with AIDS, because so much of the research is confidential."

Quick says noted researchers are also likely to be given a long leash by administrators, specifically because they bring prestige to the hospital or university where they work.

"I'm sure that some administrative issues were overlooked in Lionel's case," Sharpstein asserts. "Not owing to some sinister motive, but because of his unique position."

That unique position, in all likelihood, is gone. The current controversy and its attendant publicity have branded Dr. Lionel Resnick with infamy, a dubious distinction he now shares with his father and older brother.

From 1986 to 1994, during his eight-year stint on the Miami Beach Commission, Abe Resnick often found himself facing questions about his ethics. About the substandard conditions of the apartment buildings he owned. About the fact that he rented out subsidized-housing units, a violation of federal housing regulations that forbid commissioners from doing so. About his willingness to accept campaign contributions from a suspected drug dealer. Most of all, about his relentless attempts to manipulate city policy to favor his economic interests as a millionaire landowner. (Resnick, a Holocaust survivor who fled to Cuba in 1947, then settled his family in Miami Beach in 1960, was the subject of a 1989 New Times cover story.)

Jimmy Resnick has also been publicly chided for his role in the family business. In 1993, after the Miami Beach Housing Authority discovered he had been collecting federal rent subsidies in the name of a tenant who had been for dead a year, Jimmy Resnick was ordered to pay nearly $6000 in restitution. Last year state prosecutors investigated him after it was learned that for months he had received federal subsidies for an apartment he was renting to tenants at full market value. Again, he agreed to make restitution.

To those who know the Resnicks -- and that includes nearly all of Miami Beach's old-line aristocracy -- news of Lionel's troubles came as both a supreme irony and a surprise. He was seen as the one Resnick who had never even flirted with wrongdoing. Certainly, nothing in his past would have predicted the controversy that has ensnared him.

The youngest Resnick attended college and medical school at the University of Miami. He completed his residency in internal medicine at Mount Sinai, then switched his focus to dermatology. His interest in AIDS research began after he treated a number of patients with AIDS-related skin problems, and was stoked by a year spent as a researcher at NIH headquarters in Bethesda, Maryland, where he studied under Dr. Robert Gallo. (Gallo would later became mired in a scandal of his own, involving allegations that he stole credit for the discovery of the HIV virus from a group of French researchers.)

When Resnick returned to Miami in 1985, he joined a private dermatology clinic at Mount Sinai but spent much of his time pursuing AIDS research. Unlike some researchers, the young dermatologist quickly sensed the opportunity that existed in the booming world of AIDS research. He was instrumental in securing a million-dollar state grant that allowed him to set up a virology lab at Mount Sinai, and with the lab in place, his work multiplied.

Resnick's endeavors have run the gamut, from studies of how saliva inhibits HIV to how the virus affects the brain. He has also overseen clinical trials to test new AIDS medications. His curriculum vitae lists page after page of accomplishments and identifies him as the author of dozens of scholarly papers. In the media, he is almost invariably referred to as a virologist and an AIDS researcher.

Even amid the recent questions about his billing, it has been easy to forget that Dr. Lionel Resnick is, first and foremost, a dermatologist.

Ted Homer is not likely to forget.
Five years ago, Homer's father visited a dermatology clinic at Mount Sinai. Though remarkably robust for a man of 90, Henry Homer suffered from psoriasis and was being treated with ultraviolet light therapy, which requires patients to spend brief periods of time exposed to UV rays in a specially designed box.

Henry Homer was supposed to spend twenty seconds in the box during his February 16, 1990, visit to the clinic. But the technician overseeing the procedure forgot about him. Homer spent an estimated twenty minutes inside before exiting the booth himself, complaining that he was tired and overheated.

Homer had been prescribed the treatment by another doctor at the clinic, but the staffer on call that day was Lionel Resnick, who was serving as acting head of the department because dermatology chief Phillip Frost was out of town. When Resnick was called in and saw Homer, he ordered the patient to remain in the hospital for further observation.

Homer was soon covered from head to toe with burns. The only parts of his body that remained white, as Dade medical examiner Bruce Hyma later noted, were the bottoms of his feet. He developed septic infections, went into a coma, and died March 9, 1990. Hyma determined the cause of death to be sepsis, a general infection "caused by complications from first- and second-degree burns" over 90 percent of Homer's body.

Homer's three sons, who kept a vigil by their father's bedside during his decline, contacted the Miami Beach Police Department, which opened an investigation.

The day Homer died, Det. Paul Scrimshaw visited the clinic. According to Scrimshaw's report, Resnick told him the light booth was "homemade, having been built in the hospital" and that Maria Fajardo-Stewart, the technician who oversaw Homer's treatment, had received no special training.

The detective returned the next day to interview Fajardo-Stewart and to ask Resnick more questions. He noted that in the time since his first visit, someone had replaced the timers in the two light-therapy boxes and made other improvements. Scrimshaw also wrote in his report that Mount Sinai officials were careful to distance themselves from the clinic, pointing out that it was an entity separate from the hospital.

Scrimshaw paid Resnick one more visit, a week later, along with medical examiner Hyma. During this interview, Resnick described the UV treatment as a "benign therapy" and admitted there was no procedural manual covering its administration. "Resnick also advised that the victim did not avail himself of the 'Safety Button' in the light booth," Scrimshaw wrote in his report.

At the mention of this device, all three men returned to the light box in question. "No Safety Button could be found within the booth," Scrimshaw subsequently wrote. "An off-white wire was located in the upper right rear corner of the booth, leading to an outlet in the wall. It is possible that this is the button and it was obscured, hanging over the exterior rear of the booth."

The next day, the Miami Herald ran a front-page story about Homer's death. The only doctors mentioned in the piece were Frost and Jay Herbst, another physician who worked at the clinic. As might be expected, the television stations, too, descended. One former flack recalls that staffers in Mount Sinai's PR department began referring to Homer's demise as "the crispy critter incident." Still, Resnick's name never came up.

The media furor soon died down, but Detective Scrimshaw continued to investigate. Though Resnick may not have known about the incidents since the victims involved weren't his patients, Scrimshaw found that two additional patients had suffered severe burns from the "benign" UV therapy. Ten-year-old Jenny Bouchard had been treated in September 1989. The next day, she told Scrimshaw, her hands and feet were so heavily blistered she could not walk. Likewise, 93-year-old Marge Zucker had suffered blistering burns serious enough that she had to check into a hospital, where she later died.

In April 1990, Scrimshaw met with Assistant State Attorney Sally Weintraub and turned over his report to her. Weintraub investigated further, filling two boxes with case material, but she eventually submitted a close-out memo noting that she could find no "facts or circumstances which would support the filing of a manslaughter charge against Maria Fajardo-Stewart, the individual doctors, or Mount Sinai Medical Center."

The case file has been subsequently lost. But the tragedy remains a raw subject to Ted Homer and his relatives. They are especially bitter about Resnick's role.

"He was the one that tried to cover everything up," alleges Ted Homer, a retiree who winters in Boca Raton. "Resnick was supposed to be in charge and he did absolutely nothing but lie. He would tell us that Dad was going to be okay, that the burns weren't that bad. Not an honest statement came out of that man's mouth. That's why we're so angry."

Ted Homer's sister-in-law Sandra Homer also came away angry: "My husband was a dentist, so we knew that mistakes sometimes happen in health care. All we wanted was for someone to apologize and level with us about what happened. But Resnick was so unfeeling and pompous. He kept telling us Dad was going to be fine, and refused to have him airlifted to the burn unit at Jackson Hospital. It was obvious he was in terrible shape. For God's sake, the man looked like raw roast beef."

Family members say they eventually reached an out-of-court settlement with the clinic regarding Ted Homer's death, but they decline to discuss the terms. Richard Sharpstein says unequivocally that Resnick's role did not figure in the matter.

Sharpstein believes the family members are misdirecting their rage. "Mr. Homer was not Resnick's patient, and he had nothing to do with his treatment," Sharpstein points out. "I think there's a misperception here, based on emotional trauma. Lionel did everything he could in a difficult situation."

In fact, Sharpstein continues, Resnick was so upset by Homer's death that he broke his relations with Frost and left the clinic. Frost later abandoned medicine and low runs a prosperous drug company.

Within a couple of years, Resnick himself would launch a private business, though one of an entirely different sort.

The item appeared on December 10, 1993, atop Tara Solomon's weekly nightlife column in the Miami Herald's "Weekend" section:

"The week began rather tamely, with the Thursday opening party for Imagen, a luxury medical day spa just off Arthur Godfrey Road in Middle Beach. While harpist Roberto Perera entertained and celeb guest MTV hostess Daisy Fuentes graciously posed with an obscene number of people, local aesthetes mingled, toured and cocktailed. The crowd included entertainer Kitty Meow; Tatiana Packer, Miami correspondent for Woman magazine; fashion photographer Silvio Fittipaldi...among a bevy of Miami Beach old-guard socialites in glittering ensembles with coordinating cocktail hats toasting Imagen founders Dr. Lionel Resnick and Fern Resnick."

To regular readers of Solomon's dispatches, the cast of characters was all too familiar A save for the two proud proprietors. But then, most readers probably were unaware that Solomon is a good friend of the Resnicks, and that eventually she would be the beneficiary of hundreds of dollars' worth of free services from Imagen, according to two former Imagen workers.

The item must have been more jolting still to anyone who knew Lionel Resnick in his previous incarnation as a meek viral researcher.

With the opening of Imagen, Resnick's life entered a new phase. Where previously he had been content to oversee his lab and maintain a private dermatology practice, his new focus was on promotion and glamour. That was the way to attract an upscale crowd to Imagen, people who'd be willing to lay out $95 for a facial or $75 for an aromatherapy massage. After all, he'd put a lot of money into this venture.

Or, as former employees say he liked to joke, his wife Fern had. A former nurse, Fern Resnick had spared no expense in her role as Imagen's aesthetic director, from the golden chandelier that graced the foyer to the handpainted mural in the relaxation lounge. There were also the miscellaneous expenses of running the spa A supplies, plumbers, publicists, the opening-night gala. And Resnick had other financial obligations, as well. The couple had three children, and as Fern boasted to clinicians, they were planning a new family mansion in an exclusive Bal Harbour neighborhood where they'd paid $789,000 for a plot.

Former employees relate such recollections with no lack of irony. Because Imagen, they say, had actually begun as a down-to-earth concept.

"It was supposed to be this whole family attitude," says one ex-staffer who, like several other former employees interviewed for this story, requested anonymity. "We were working toward a common goal: to promote alternative health. There were going to be classes and seminars for us to learn from the doctors on staff. We were going to be full-time employees, with insurance benefits and everything. But none of that came to pass. The Resnicks just wanted do skin care and make money."

One of the ways Lionel Resnick made money, say former employees and clients, was to bill insurance providers for office visits or procedures that never took place, an allegation that Resnick, through his attorneys, vehemently denies.

Jean-Claude Simon is one patient who has taken issue with Resnick's billing. In early 1994, Simon went to Imagen for a massage. He says Resnick told him the procedure would be covered by his insurance because Simon suffered from a skeletal ailment. Upon arriving at the spa, Simon says, he was told he would have to see the doctor. "I didn't want to, but I said, 'Fine. Whatever,'" he recalls. "After examining me, Resnick told me he wanted to take biopsies of two small areas on my back. I didn't think it was necessary, but I allowed him to and went off to get my massage."

When Simon received his benefits statement from Medicare, he was shocked to find Resnick had billed $265 for the visit and had listed two procedures, "electrocautery of skin tags" and "destruction of skin lesions," which Simon says were never performed. "The only thing I wanted was my massage, and that wasn't even listed on the bill," he notes.

On his second visit for a massage, Simon remembers, Resnick was not at the spa and the receptionist demanded a cash payment. Simon protested. Rather than argue, Simon says, Fern Resnick told him his massage would be complimentary. "But lo and behold, my next Medicare statement included a charge for $75 for an outpatient visit to Lionel Resnick," he complains. "That's when I knew something bad was going on, and I never went back."

Although they don't want their names published, several other former patients tell similar stories. One man says he came in for a $45 facial and wound up receiving a statement indicating his insurance company had been billed $320. "I had no idea what the charges could be, because I never even saw the doctor," he says.

An elderly woman claims she grew suspicious of Resnick's bills after receiving statements showing dozens of charges for lesion removal. "I only had five lesions removed in all my visits," the client asserts. "The reason I went to Imagen was for glycolic peels [a facial treatment]." The woman says she notified her insurance company of her concern but has heard nothing back.

Former employees say it was a common practice for Resnick to refer his dermatological patients to Imagen.

"I was going to see Dr. Resnick for acne-medicine prescriptions and special injections but he kept urging me to come to the spa," recalls one former patient. "He told me not to worry, that it would be free. Then I started getting these invoices back from my insurance with charges for things like flat wart removal. Well, I've never had flat warts."

New Times also has obtained a number of pages from Imagen appointment books that list "medically indicated" services, meaning those which are billable to insurance companies. These include a number of procedures that are generally considered to be cosmetic, such as facials, body wraps, massages, and something called "Vichy exfoliation."

Through his attorneys, Lionel Resnick disputes any wrongdoing in his billing for Imagen. "The insurance-fraud allegations are insane," says Richard Sharpstein. "They are a figment of someone's overactive imagination, probably goaded by disgruntled former employees who were terminated because of their own incompetence. It's obvious that, in light of the Mount Sinai situation, the worms are coming out of the woodwork to besmirch the good name of Lionel Resnick."

For those who have known Resnick over the years, however, the most striking aspect of his decision to launch Imagen was his coincident social metamorphosis.

"Lionel was always this quiet fellow, and in the last couple of years he and Fern have undergone this Hollywood transformation," observes one longtime acquaintance. "Their names show up in the social columns. I see Fern on the cover of these upscale magazines looking like Ivana Trump or something. And they've got this wall at Imagen covered with celebrity photos. Them posing with Fabio and that kind of thing. I guess it's all promotions, but I wonder if they haven't gotten a little caught up in the glitz."

Abe Resnick has taken his youngest son's downfall pretty hard. So have his wife Sara, and son Jimmy, who used to proudly and frequently refer to Lionel as "my brother, the doctor."

"This whole thing has thrown the family into emotional turmoil," says attorney Richard Sharpstein. "To see his youngest son and his own name smeared in the paper has killed Abe. Here's a man who survived World War II and the political turmoil in Cuba, who's had to build his life up from scratch twice. He's a very proud man. And he feels a great amount of pride in Lionel, who went out there and made his name on his own."

The situation is all the more difficult for the family, Sharpstein adds, because Lionel has always been the least public Resnick, an introvert whose pioneering research has been forgotten amid his humiliating departure from Mount Sinai. "They're confused, and understandably," Sharpstein says. "Because Lionel is being treated like a criminal when he has done nothing illegal. Not one thing."

Ultimately, federal investigators will make their own determination about that. But no federal probe is likely to reveal why Lionel Resnick allowed himself to engage in behaviors that have jeopardized all he has accomplished.

Money would be one obvious answer. But as everyone knows, the Resnick family has plenty of that.

Sharpstein suggests it was simply a matter of naivete, that Lionel Resnick had no idea he was doing anything wrong. That would explain why he didn't conceal the huge payments sent to his home, care of Vironc Labs.

But his critics assert that it was the very pride Sharpstein speaks of that may have led the young researcher to run too fast and trip. That in acquiring his father's immigrant drive for success, Lionel Resnick disregarded the rules that govern others.

The doctor himself has reportedly pondered the matter in more scientific terms. In the midst of his troubles A troubles that could grow much worse in the days to come A he is said to have mused forlornly about his public disrepute, "Maybe it's genetic.

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