PEP SPECIAL REPORT (PART II): Beverly Hills 6750 admits to problems, but says it’s not closing down

In a span of two months, Beverly Hills underwent major changes—first, David Bunevacz (right), the former president of the company, was replaced by Dr. Eduardo Santos (left), who's now acting as the clinic's managing director; second, Beverly Hills 6750 is now called BH 6750.

Dr. Eduardo Santos, who took over as managing director after David Bunevacz stopped showing up at Beverly Hills 6750, said he had trusted Bunevacz. Particularly in the first few months of working together, the doctor said he had no reason to be suspicious of their president.

However, he said he did notice a certain looseness in David’s spending habits.“I noticed that he's kinda lax with the way he spends money,” the doctor said cryptically.

The clinic’s general manager, Suzette Lopez, added her own profile of David: “He’s a very smooth talker. He's very nice. He's very generous. He would treat everybody to Starbucks. Very generous.”

PEP asked: Did David’s lifestyle, which included buying a Porsche Cayenne on the same month he would buy his wife a BMW X5, not raise suspicions among his business partners? And what of reports about the couple’s business trips abroad on first-class accommodations, parties in Hong Kong, and expensive pieces of jewelry, which were said to have reached the clinic?

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Dr. Santos said the lifestyle was “higher than what we knew,” but was not cause for suspicion, at first. “You know,” he explained, “David had this thing about being successful with other business investments. [He was] supposed [to have] investments in other business interests, which include his business of consultation, business with LGUs [Local Government Units].

“He was allegedly involved with the mining business. He was also due to make a windfall, stuff like that…So he was able to carry off this lifestyle. And you know, the way [he] and the wife project themselves: They look money. They look money.”

Dr. Abe Marinduque, for his part, made this comment: “When they started coming out with the BMW sa Celebrity Duets, I never had any suspicion. Until a friend of mine said, ‘You should get your company audited. David seems to have a lot of money.’ But [I replied], ‘Bakit niya ‘ko lolokohin, e, I see him every day here. He can make you believe anything.”

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THE LEGAL CASES. Was it the BMW X5 that eventually led to the filing of cases against Bunevacz?

Dr. Santos said yes. “It was triggered by that. You know, in a corporation, usually corporate policies dictate that you should have an external audit on a yearly basis. And it was also about time to have one done. But again, it was kind of postponed. Again, what triggered it was the flamboyant lifestyle, so when that was noticeable, our board of directors called for a rapid external audit. We [did] it already. These are things that are too noticeable.”

The company—represented by one of its directors, Tyrone Ong—formally filed their first estafa case against Bunevacz at the Quezon City Prosecution Office on February 1.

The Complaint-Affidavit stated: “The result of the preliminary audit report was shocking. The auditors flagged down as anomalous several check disbursements of corporate funds that were signed and/or authorized by respondent [David Joseph I. Bunevacz], principally because these disbursements were for purposes not at all related to the operations of the company.”

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Two checks were issued to Klassik Motors: Check Numbers 0001228562-0001228563, dated March 10, 2007, amounting to Php 175, 000 each.

According to the Complaint-Affidavit, since “no motor vehicle” purchased from Klassik BMW was ever listed as a company asset, and the Board of Directors never ratified or approved the disbursement of the specific checks mentioned, Beverly Hills 6750 deemed the transaction “anomalous.”

The company demanded, through a “respondent letter” dated December 19, that David return and pay his disbursements of company funds amounting to “one million eight hundred twenty one thousand five hundred eighty one pesos (PhP 1,821,581.00).”

Dr. Marinduque enumerated the process: “The first demand that we sent him was 1.8 million pesos because that represented the first day of the audit. So there are several checks [discovered on] the first day of the audit. There were several checks amounting to 1.8 million. As far as I know, [these were discovered] if not the first day, the first couple of days. That’s what we sent him [the demand letter to explain those unexplained checks] in the first demand letter.”

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Then the cosmetic gynecologist summed up: “But when we finished our audit, our official audit, there were a lot more [check disbursements]. Voluminous! So we have several others.”

Dr. Santos seconded that: “There were many glaring misappropriation of funds. It’s a very glaring…down payment for the X5, mga 500,000 of the company assets, mga travels—first class—with family and children to Amanpulo…”

The clinic’s second estafa case against Bunevacz was filed on February 11 in Manila. “The substance of the complaint,” according to Dr. Santos, “is basically funds which were used, pay to cash, with no liquidation or no receipt.”

“And marami pang iba,” Dr. Abe picked up. “And we’re trying to audit na nga, ‘no. And we found out that some of the patients directly pay him. [But] in our books, those patients have not paid!”

These patients, Dr. Santos disclosed, were “prominent people. The quotation comes from us, and the payment is made directly to David. It doesn’t really enter the corporate funds. And then he’d come here, ‘Oh, that’s complimentary, that’s complimentary’ [he’d say about those treatments. So now] we try to find out.”

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BETRAYAL, BETRAYAL. PEP asked: Before the clinic elevated its issues against David Bunevacz to the courts, what was it like in the clinic? How was the morale among the top brass? At the question, the atmosphere in the room turned somber.

Dr. Santos said he felt disbelief and betrayal: “Betrayed, that we were deceived, and know, we have thought perhaps the problem started during the latter part of last year when he started to show a more flamboyant lifestyle. But what is very hurting is that, at the very start pala, meron na [betrayal].”

Suzette Lopez, who as general manager dealt with the Bunevacz couple almost every day, confessed: “Up to this time, I am still in denial. Every single day, how could I have not known? It was just totally impossible. Until now, I can’t believe he’s not there [pointing to the seat which David used to occupy]. And we’re all professionals here, we’re not used to that. I am not used to the glaring of the [TV camera] lights…Omigosh! All unbelievable!”

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Dr. Santos recalled telling Dr. Marinduque recently, when they were in a mall: “Tayong mga doktor, hindi tayo sanay na nagsisinungaling. We’re not familiar with this. What we’re familiar with is telling our clients the recommendations, what is good for you, and then we’re very used to thank you’s [from] people who are very grateful for the services that were rendered to them. Pero yung personality na nagsisinungaling, hindi.”

Dr. Marinduque added in a grave tone, “We're very, very disappointed because of the way things turned out. But I'm still very, very hopeful because we're strong as a company and we're here to stay.”

PEP asked: What was it like at the staff level?

“Well, at first, just like all of us, they couldn’t believe it,” Lopez answered for the staff. “But now, especially the people who go daily wage, they’re afraid to lose their job, and they think it’s not stable. You know, we didn’t have a statement for the first two weeks because, even us, we didn’t know what to do, we didn’t know what to say. But now because of Dr. Santos, who holds the group together…”

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A dip in sales began happening during the first week of January, affecting the morale of the staff, the three interviewees admitted.

Dr. Santos put it this way: “Well, it [sales] dipped for a while. But over the past three weeks, it picked up again. As a matter of fact, for the month of January, uh, it was comparable to our previous performance. So, the key to that… as an organization [is] we had to create a management crisis team.”

Part of the work of the “management crisis team” was to put a stop of dangerous office gossip that was fast spreading. Dr. Santos called for an emergency meeting, and soon after that, he said, “things went back to normal.”

Pointing to his colleagues in the room, the clinic’s managing director said: “Again, I thank Suzette and Abe for helping gear [up] our company. Out of that [scandal], we were very much concerned about the organizational health, the [morale] of employees, so we kind of addressed that. Everybody is in good spirits now…especially the sales have picked up over the past few weeks.”

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After David left the company—the clinic said he tendered his resignation; David himself has not said if he resigned or was kicked out—it was Dr. Santos who assumed his responsibilities. Whereas he had been trained as a doctor and could function as head of medical operations, he is now working at managerial and administrative tasks.

“It’s been a challenge for me,” he said, “but I appreciate the strong support that Abe and Suzette, and of course, Mia, who’s our sales director, [have given me]. So we’re now a happy management group of four.”

The new management team says it has the full support of the clinic’s board of directors.

For a business only one year and three months old, issues like misappropriated funds and a spurious affiliate in the U.S. could lead to major setbacks. Add to this the media interest, which means that the company’s problems are doubled by the public exposure.

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“The good thing about it is, everybody is still happy,” the clinic’s general manager said. “The thing about it [is], everybody is intact. All the doctors, no one has left. They’re all intact. The morale is so high. We know customers are still in. That keeps us going.

“It’s just, of course, when there’s bad publicity, especially about these facts nga of this part of the affiliate. You know, that’s really gonna affect us. But our morale is high because no one had left. All the chairmen, all the chiefs of the plastic surgeons, are all still intact. We’re all here!”

MOVING FORWARD. Most important, the management team said, “We are not closing down!”

In fact, all three interviewees said, they have so much work to do. First, they will revise their marketing strategy. The major change is that they have now dropped all references to a “U.S. affiliate” and are going big on the quality of their physicians. Second, the logo has been changed, and so has the website. There will no longer be a focus on Western models and settings. Third, a marketing group has been hired to focus on repackaging the image of the company. Fourth, they are also thinking of relaunching the clinic.

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Dr. Santos noted with a bit more lift in his voice: “The basic strategy is to build on the brand equity being associated with the quality of physicians. Because now, for example, there are two groups out there [Belo Medical Group and Calayan Surgicentre], who are very celebrity-oriented, and therefore, they use that quite strongly. Admittedly, it’s [celebrity-oriented promotions] a little bit strong. So if we come in as the third organization which strives to go to the celebrity route, we might be looked upon as somebody who’s just following that particular trend.”

Which is why, the doctor said, they have focused on selling the clinic on the strength of its medical staff. “The thrust of our marketing group is to create a different brand equity, which is to revolve around physicians. So on February 15, we’re coming up with a print ad featuring the work naman of Dr. Marinduque. So I kind of identified five products for this clinic that I want to create as brands and with the corresponding specialists.”

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Equally upbeat, Suzette Lopez said: “We’re doing so well. We’re doing so much. I was asking, ‘Ganoon ba tayo kadaming pera na hindi natin alam na kinukunan tayo?’ People think we’re gonna close dahil wala na kaming pondo, tinanggal na lahat. But that’s not the case. It’s not the case at all.”

They feel that now is the time to capitalize on their “firsts.” They claim to be at the forefront of cosmetic gynecology in the Philippines, and have coined the word for it: “gynesthetics.” This is Dr. Abe Marinduque’s area of specialization.

Dr. Marinduque himself cited other “firsts”: “Ang daming firsts na hindi na na-market. We never capitalize on our firsts—eye thermage, cosmetic gynecology, laser dentistry…”

When it comes to sales, the new group, however, anticipates a slower run. Dr. Santos said: “David’s projections or computations were, ‘Money back at 1.3 years.’ Right now, the way I look at it, it is, ‘Money back in five years.’ And five years, you know, is a regular business return. It’s not as if it’s really not great. Basta over-promise, under-delivery yung nangyari kay David.”

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Claiming that clinic sales began to go back to their normal levels in the second week of January, the new management is excited at the prospect of sustaining the momentum.

PEP asked: Now that they have confirmed the non-existence of “Beverly Hills Surgical Institute,” do they have plans of dropping the “Beverly Hills” in their company name?

“The name Beverly Hills is a corporate name,” Dr. Santos replied. “Again, as a strategic move, we’ve already taken upon ourselves to slowly drop it. Actually our print ad on [February 17], will already not be Beverly Hills 6750, though we’ve created this brand, which has become quite popular. It’s also going to be the way KFC went—from Kentucky Fried Chicken, it’s KFC. We’re going “BH 6750.” Nakilala na, e. And we don’t want to lose our corporate website which is bh6750 [].”

DAYANARA TORRES. PEP also asked: Who is going to be their endorser when they relaunch? Is it still going to be 1994 Miss Universe Dayanara Torres? Has anyone from the clinic communicated with her yet?

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Suzette answered, “Her contract with the clinic has expired last December.”

Dr. Santos cut in, “That contact was really a contact developed by the [Bunevacz] couple, so, of course, if we make an effort to look for her…I don’t feel naman we should make an effort to communicate with her…to tell what? What do we tell her? But anyway the contract has expired.”

Who’s going to replace Dayanara?

Dr. Santos said, “We’re using some celebrities, in the sense of parang tactical moves, just so we have endorsers on TV. Some newscasters, perhaps. But yung actual big celebrity to be our formal endorser, it has been broached to us by our marketing group.”

During the PEP interview, the clinic said it had not yet made a list, “not even a short list,” of its possible celebrity endorsers.

Finally, PEP asked: After all that has transpired, are you sorry you had been associated with David?

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“You know, yes and no,” Dr. Santos said, thinking things over. “No, because this is still a great concept. He put together this team. He plucked Suzette out of nowhere [Suzette smiles] through his system of referrals. He plucked me out of a referral from a pastor, so I am happy I am here. I have always believed in this concept. And just happy to have the full support of our investors as well, so we’re a solid team. And [yes], because of the deception which had happened and this temporary financial setback.”

Continuing, the doctor said about David and Jessica Bunevacz: “I think also, this business gave them a certain level of, uh, respectability, perhaps. You know, legitimacy, because of, uh, perhaps some previous background that they may have had, or reputation they have had. It was a perfect venue for them to achieve that.”

By interview’s end, the air had turned jovial. Perhaps to humor us, Dr. Santos turned to us and said: “Thank you for opening our eyes.”

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Now all three laugh at the whole mess. “We didn’t know Beverly Hills was associated to a beauty parlor,” Dr. Santos said with wry wit. “Sabi ko sa mga doctor, ‘Ano? Associated tayo sa beauty parlor?’”

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In a span of two months, Beverly Hills underwent major changes—first, David Bunevacz (right), the former president of the company, was replaced by Dr. Eduardo Santos (left), who's now acting as the clinic's managing director; second, Beverly Hills 6750 is now called BH 6750.
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