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December 19, 2014

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Desai ordered to federal custody for evaluation

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Sam Morris

Dr. Dipak Desai appears in court for a competency hearing Friday, Jan. 27, 2012.

A former Las Vegas doctor serving prison time in connection with a 2007 hepatitis outbreak has been ordered into federal custody for a mental competency evaluation in a separate health care fraud case.

Attorneys representing Dipak Desai, 65, and prosecutors signed an order on April 14 stating that the evaluation is needed to determine whether Desai can take a plea deal or stand trial on the federal fraud charges, according to court documents.

Desai lost his medical license after investigators discovered the outbreak in 2008. At least seven people were infected, and 40,000 were exposed to the disease due to bad injection practices at his Endoscopy Center of Nevada.

He was convicted of 27 criminal counts — including second-degree murder — related to the outbreak. Desai is at the Northern Nevada Correctional Center serving a sentence of up to life in prison with possible parole after 18 years.

Questions about Desai's mental health contributed to a two-year delay in the state trial. He spent six months being evaluated at the state's secure mental health facility in Sparks before experts found him competent to stand trial. Experts concluded he was exaggerating the effects of strokes he suffered before and after the hepatitis outbreak.

Ronald Lakeman, a nurse anesthetist and co-defendant in the state proceedings, was acquitted of murder but convicted of 16 counts and sentenced to 21 years in prison.

The federal trial is scheduled for Aug. 5 if Desai doesn't take a plea deal.

Desai's former clinic manager, Tonya Rushing, is scheduled to stand trial at the same time if she does not accept a plea deal. Desai and Rushing were indicted in April 2011 on charges that they defrauded insurers, including the federal Medicare program and the state Medicaid program, from January 2005 through February 2008 by inflating the length of medical procedures and overbilling health insurance companies for anesthesia.

Desai will return to state custody once the evaluation is completed, court records said.

The Associated Press contributed to this report.

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