Legal fight, new partner spur Medquest move
Former northwest Wisconsin company caught up in the shadowy world of offshore medical schools
by Paul Lundgren
A Northwest Wisconsin company that owns and manages two offshore medical schools has moved to Massachusetts after an attempted hostile takeover of one school, and an ownership change within the firm.
Medquest Technologies owns Medical School of the Americas-London in England and Medical University of the Americas-Belize in the town of San Pedro on the island of Ambergris Caye.
General surgeon Norman Hans Rechsteiner, MD, and his wife Wendy, of Spooner, continue to own half of Medquest. Rechsteiner has staff privileges at several Northwest Wisconsin hospitals. He owns Surgery Clinic of Spooner, an affiliate of St. Croix Regional Medical Center in St. Croix Falls, WI; Burnett Medical Center in Grantsburg; Indianhead Medical Center in Shell Lake; Spooner Health System; Cumberland Memorial Hospital; and Hayward Area Memorial Hospital. Wendy
Rechsteiner manages Surgery Clinic of Spooner and is Medquest’s chief financial officer.
Both Medquest schools have tumultuous pasts. Rechsteiner said former Medquest partners Jeffrey and Renae Sersland divested their interest last fall to fund their own lawsuit against the former owners of another Belize school — St. Matthew’s Medical University. The Serslands ran the school for four years until a hostile takeover drove them out.
Meanwhile, as Medquest was entering a partnership to take over the troubled St. Christopher’s College of Medicine in Luton, England — which was losing its charter — the school’s founder attempted to regain control of the school. Rechsteiner said Medquest fought off that former owner — Paul Leone — and moved the school to London, where it now operates as Medical College of the Americas-London.
“There are a lot of scalawags and shady characters in this offshore medical school business,” Rechsteiner said. “The federal government doesn’t have anything to do with it because they’re all offshore. It’s like the wild, wild west out there.”
Rechsteiner said David Gill, MD, a Harvard-educated psychiatrist in Gardner, MA, bought the Sersland’s half of Medquest last fall and convinced Rechsteiner to move the company to Gardner. He said a contributing factor in the move was the lack of international banking services in Spooner.
Rechsteiner said two employees were laid off when he closed Medquest’s office in Trego, located in the former Northern Portraits building. Trego is about five miles north of Spooner on U.S. 53.
The Trego office housed student transcripts and handled student recruitment and billing. Prior to its move to Massachusetts, Rechsteiner planned to move Medquest to a tax-increment financing district in Spooner. That plan dissolved when the partnership changed and Gill recommended the move to Gardner, where he could oversee operations.
Medquest was formed in late 2005, when the Rechsteiners invested in Medical University of the Americas-Belize with the Serslands, who have a deeper history with offshore medical schools. Grand Forks, ND native Jeffrey Sersland founded St. Matthew’s Medical University in 1997. It was the first medical school in Belize.
On June 1, 2001 — one week after graduation ceremonies — Michael Harris, MD, then-chairman of St. Matthews’s board of trustees, led a hostile takeover there. Sersland told Belize’s Channel 5 TV news Harris had hired a security team that stormed the school, along with his attorneys, and physically removed key personnel.
Later in the year, Sersland announced he would co-found a new medical school about two blocks from St. Matthew’s called the Medical University of the Americas-Belize.
Shortly afterward, St. Matthew’s relocated to Grand Cayman Island in the British West Indies.
In 2005 a partnership of two private equity firms, Prairie Capital and Equinox Capital, bought St. Matthew’s. After their acquisition, the new owners learned the Serslands had a lawsuit against the former owners claiming 44 percent ownership of the school.
“There’s a lot of money to be made in the offshore medical business,” Rechsteiner said. “That attracts a lot of dishonest people.”
Rechsteiner said last year’s battle with Leone, St. Christopher’s founder, was an expensive, image-tarnishing experience.
“It took us a while to get this guy to go away,” he said. “I’d like to think he’s in prison, but no one’s seen him since.”
The problems at St. Christopher began in late 2005 when a BBC News report revealed the school was not accredited, though it claimed it had received accreditation from the West African nation of Senegal in 2000.
The UK’s General Medical Council quickly suspended its recognition of degrees from the college.
“None of the grades, none of the degrees that the kids were on their way to earning would have any validity at all,” Rechsteiner said.
“They’d have to start all over again. So, we went and we said we have a pretty workable government where we’re from in Belize. We believed we could get a branch charter from Belize to have a school in London. So, we extended our charter and, essentially we were the white knight. But there was nothing left of the other business when we got there. We could have just gone there and established our own school starting from scratch and it would have been easier.”
Rechsteiner said after Medquest took over the school Leone became “deluded,” causing numerous problems.
“He had a computer hacker hack into our computers, he would not allow us access to his computers, all the money from the bank disappeared one day — it was just a like a novel, almost,” Rechsteiner said.
The story — or at least the most recent chapter — is complete with a mysterious escape, he said.
“One of the things we found in going through the files afterward was about two months before the Senegal people pulled his charter he bought a DC-9 (aircraft). Nobody knows what for, but we think he was planning to shovel all the money and everything into that plane and take off for South America or Africa or someplace and escape. We never recovered the asset of the plane,” Rechsteiner said.
Running the school and the legal battle with Leone cost Medquest about $100,000 a month during most of 2006, Rechsteiner said.
“I ended up hugely in debt personally to keep the whole thing afloat. But we did keep both our charters and we’re teaching in both locations.
This fall our classes will be full again. Money will be flowing and everything will be normal,” he said. http://www.businessnorth.com/exclusives.asp?RID=1799