Harrison James' Money Man Is Controversial Eye Doctor
By: Jean E. Palmieri
Daily News Record
November 27, 1996
NEW YORK - The money man behind Harrison James' shiny new men's wear store here has a controversial reputation.
The store's silent partner is Dr. James Desnick, a Chicago-based eye-care millionaire, DNR has learned.
Desnick, 45, is an ophthalmologist-turned-entrepreneur who was accused in 1993 by the Illinois Department of Professional Regulation of performing unwarranted surgery, aiding and abetting the unlicensed practice of medicine and engaging in false and deceptive advertising.
The state and Desnick reached a settlement in 1995, in which Desnick agreed to have his state medical license placed on probation for five years. He also agreed not to practice medicine for two years and was fined $100,000.
In April of this year, the Illinois Supreme Court ruled that it was constitutional for the DPR to find that Desnick had engaged in false and deceptive advertising. Based on the 1995 settlement with DPR, Desnick will be precluded from telemarketing.
But Desnick continues to make headlines in the Midwest. In September, Chicago attorney Kenneth Moll filed a multi-count class-action lawsuit against Desnick and his former business, alleging false advertising as well as unnecessary cataract and YAG-laser surgery.
Moll said the original suit was amended and expanded last week in order to include additional plaintiffs.
Michael Trucco, an attorney with Stamos & Trucco in Chicago, represents Desnick. Trucco said Moll's complaint "has never been served; therefore, there has been no official response." However, Trucco called the allegations "baseless," noting that "the case will be defended vigorously. And we have other steps planned to address the false charges made by Mr. Moll."
The federal government also reportedly has its eye on the ophthalmologist. According to a story in the Chicago Sun-Times on April 6, 1995, Desnick is under scrutiny in a federal investigation of Medicare and Medicaid billing.
Randall Samborn, a spokesperson for the U.S. Attorney's Office in Chicago, said: "There have been reports of an investigation, but our office doesn't confirm or deny reports unless charges have been filed. And no charges have been made public at this point."
In 1991 the DPR began investigating malpractice allegations as well his company's telemarketing tactics designed to lure patients to his clinics.
According to the DPR, the telemarketing firm contacted potential patients over the age of 65 and reportedly offered them free transportation to Desnick's clinics along with free eye exams. The DPR said this scheme violated a section in the Illinois Medical Practice Act that prohibits doctors from hiring corporations to solicit business.
Reached by telephone, Alan Katzman, who operates Harrison James, grudgingly acknowledged that Desnick was indeed his silent partner. "But I'd prefer you don't mention him," Katzman said.
He said Desnick attended the store's opening party last Thursday night - a fete that drew over 800 people to the 15,000-square-foot townhouse at 5 West 54th Street. "Yes he was there," Katzman said.
He said Desnick was both a friend and "a former client." Sources said the two met during Katzman's days as the general manager of Bijan in New York, where Desnick was reportedly a customer.
Katzman himself has run into some legal problems since announcing plans for the upscale men's emporium. In September, Bijan filed suit against Katzman alleging Katzman used confidential trade secrets to form Harrison James.
Katzman joined Bijan in November of 1989 and served as general manager of the New York store.
Bijan Pakzad, owner of Bijan, which operates a store in Beverly Hills as well as the by-appointment-only boutique on Fifth Avenue, did not return phone calls.
However, Katzman said he was certain that although the lawsuit with Bijan is still pending, "nothing will come of it. It's a waste of money. There are no secrets in this business."
That also holds true for the identity of Harrison James' well-heeled partner. In an earlier interview, (DNR, Sept. 26, Page 4), Katzman declined to identify the person who bankrolled the store, saying: "He prefers to remain anonymous." He would say only that he's "not involved in the fashion industry."
However the store was named, in part, after Desnick. Katzman has said since the beginning that "Harrison" is the name of his three-year-old son and "James" was in honor of his partner.
In addition to his medical practice and eye-care clinics, Desnick was also a Republican candidate for the U.S. Senate in 1994. He dropped out of the race in September of 1995.
The mystery behind Harrison James has done nothing to deter shoppers. According to Katzman, the store pulled in $483,000 in its first half-day of business last week. "We've had a lot of well-wishers," he said.