$83 Million in Taxpayer Money Embezzled in Nursing Home Scheme

According to the lawsuit filed on the 28th of June 2023 by New York State Attorney General Letitia James, Kenneth Rozenberg and Daryl Hagler, the owners of a nursing homes group are being charged with years of neglecting and harming patients while illegally misusing funding for personal benefit. The nursing homes, owned and operated by Centers for Care LLC, siphoned over $83 million, while their facilities remained chronically understaffed, and patients suffered the consequences.

Filed in the State Supreme Court of Manhattan following an investigation by the Office of the Attorney General’s Medicaid Fraud Control Unit, the lawsuit names four facilities, all of which are run by Centers Health Care: Holliswood Center for Rehabilitation and Healthcare in Queens, Beth Abraham Center for Rehabilitation in the Bronx, Martine Center for Rehabilitation and Nursing in White Plains, and Buffalo Center for Rehabilitation and Nursing in Buffalo.

Mr. Rozenberg and  Mr. Hagler are charged with pocketing government funding intended to maintain the facilities and ensure adequate staffing through a number of fraudulent transactions such as faulty, interest-free loans and hyper-inflated invoices in a complicated network of family members and business associates, dating back to 2013.

At the news conference, several victims’ family members described the horrific conditions their loved ones endured, standing with the Attorney General. They described an ever-present odor of human feces, being unable to contact their family members, patients sustaining serious injuries requiring surgery, and in one instance, bedsores that progressed into sepsis and causing death. According to the suit, all four nursing homes failed to follow COVID-19 protocols throughout the pandemic, leaving sick residents unquarantined and failing to provide staff with adequate protective equipment.

The suit alleges that when administrators requested more employees and salary raises for the overworked staff that remained despite the difficult conditions they were working under, Rozenberg and Hagler denied their requests, choosing instead to force employees exhibiting COVID symptoms to report for their shifts. Given the extreme vulnerability of their elderly nursing home residents to COVID-19, this is especially egregious. Further, the lawsuit outlines Holliswood reported nearly a quarter of its patients dying due to COVID in the first two months of the pandemic alone, while in 2020 across all of the homes, around 400 patients died as a result of it.

AG James seeks to implement a financial and healthcare monitor which would be paid for by Centers Health Care and would oversee the facilities’ operations while the case remains open. Additionally, the nursing homes would not be permitted to enroll any new patients, preventing any possible further mismanagement of funds. Should these allegations be proven true, Centers Health Care would be responsible for reimbursing the misused funds in a massive win for the elderly and nursing home residents across New York.

Given the sizable threat posed by COVID-19 and the enormous trust families seeking full-time care for their loved ones place in these kinds of facilities, it is more important than ever that the elderly be advocated for. At Meenan and Associates, we offer a range of legal services, including elder and guardian advocacy. We encourage anyone concerned about facility conditions, abuse, or neglect to report them and seek legal counsel, whether it be with our attorneys or the office of the Attorney General and we commend their courageous and necessary efforts at nursing home reform.

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