A former senior executive with Alignment Healthcare is suing the Medicare Advantage insurer, alleging he was pushed out of the company after reporting that it misclassified millions of dollars to inflate profits and trigger bonuses for its executives.
According to the July 7 whistleblower complaint filed in a California federal court, Alignment’s former chief technology officer, Hakan Kardes, PhD, discovered in early 2025 that the insurer had classified day-to-day operational work as capital expenditures rather than operating expenses. He alleges the misclassification totaled $8 million to $10 million in 2024.
Dr. Kardes joined Alignment in January 2019 as its first chief data officer and served in roles that included chief experience officer and chief transformation officer throughout his tenure that ended mid-2025. He also built AVA, the company’s AI and analytics platform.
According to the lawsuit, Dr. Kardes reported his accounting concerns directly to Alignment’s CEO John Kao and President Dawn Maroney in March 2025. Correcting the figure, according to the complaint, would have turned Alignment’s first positive adjusted EBITDA of $1.3 million in 2024 into a loss between $7 million and $9 million. Adjusted EBITDA carried a 35% weight in Alignment’s 2024 annual incentive plan and helped fund a $1.3 million bonus for Mr. Kao, the suit alleges.
In a statement shared with Becker’s, Alignment disputed the accounting claims in the complaint.
“In May 2025, when Mr. Kardes communicated his concerns regarding the accounting treatment for certain 2024 capital expenditures, the Board’s independent Audit Committee promptly retained experienced outside legal counsel and a nationally recognized accounting firm to conduct a review,” the company said in a statement. “The Audit Committee concluded that Mr. Kardes’ concerns were unfounded and that the Company’s accounting was appropriate. Those conclusions are further supported by the clean audit opinions issued by the Company’s independent registered public accounting firm for Alignment Healthcare’s 2024 and 2025 financial statements.”
In the weeks after Dr. Kardes reported his concerns, the complaint alleges that Alignment reversed a planned promotion and canceled or transferred increased responsibilities. Dr. Kardes then gave notice in April 2025 that he intended to resign. The lawsuit says his departure only became final once Alignment publicly announced it, describing his exit as an immediately effective resignation under an earlier title of chief experience officer.
“Hakan Kardes voluntarily resigned from the Company in April of 2025 and more than one year later, he has asserted baseless retaliation and accounting claims that we believe are an attempt to pressure Alignment Healthcare and recoup the value of equity he forfeited when he resigned,” Alignment said in its statement. “Alignment Healthcare believes these allegations are wholly without merit, intends to defend itself vigorously and is confident it will prevail.”
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