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NYC Nursing Home Operators to Pay $45M Settlement, Commit to Reforms After Allegations of Neglect and Fraud
Edited by: TJVNews.com
Executives at a series of New York nursing homes accused of orchestrating an $83 million fraud scheme targeting Medicare, Medicaid, and the vulnerable seniors in their care have agreed to a $45 million settlement with New York State Attorney General Letitia James, according to her office. The New York Post reported that the agreement aims to address years of alleged mistreatment and financial exploitation at the facilities operated by Centers for Care.
Co-owners Kenneth Rozenberg and Daryl Hagler will contribute $35 million to a special fund earmarked for improving resident care and staffing, with an additional $10 million allocated to other penalties and costs. “Residents at these Centers nursing homes endured years of tragic and devastating mistreatment and neglect, while the owners made millions of dollars in profit,” said James in a statement.
As reported by The New York Post, the lawsuit brought by the Attorney General in 2023 targeted multiple facilities under Centers for Care, including the Beth Abraham Center for Rehabilitation and Nursing in the Bronx, the Buffalo Center for Rehabilitation and Nursing, the Holliswood Center for Rehabilitation and Healthcare in Queens, and the Martine Center for Rehabilitation and Nursing in Westchester.
The lawsuit accused the owners of underfunding their facilities to maximize personal profits, resulting in appalling living conditions for elderly residents. For nearly a decade, the duo allegedly engaged in a scheme that prioritized their financial gain over the well-being of the seniors in their care.
The facilities under Centers for Care were described in horrifying detail in James’ lawsuit. Residents and their families recounted instances of extreme neglect, including patients left in soiled diapers and bedding for hours, as was detailed in The New York Post report. Chronic understaffing led to untreated injuries, such as brain bleeds and broken hips, with one instance of sepsis resulting in death after bed sores became ulcerous due to neglect.
The New York Post noted further allegations of rampant theft and meal shortages within the facilities. These conditions, compounded by a lack of adequate medical attention, painted a picture of systemic disregard for the health and dignity of the residents.
James emphasized the human cost of the alleged mismanagement: “The owners’ greed and misconduct caused immense suffering for some of our most vulnerable community members — seniors who deserved better care and compassion,” she said, according to the information provided in The New York Post report.
The Attorney General’s lawsuit also detailed an intricate web of financial fraud. Rozenberg and Hagler were accused of inflating operating costs through self-dealing arrangements, including exorbitant rental agreements between the two owners and payouts to shell companies controlled by themselves and family members, The New York Post report indicated. These schemes reportedly allowed them to siphon tens of millions in taxpayer dollars intended for patient care.
The fraud extended to inflated executive salaries and financial arrangements designed to maximize personal profit at the expense of facility operations, The New York Post report added. The settlement marks an effort to redirect those funds toward correcting the years of damage inflicted on residents.
Under the settlement, $35 million of the $45 million will be placed in a dedicated fund to improve staffing levels, enhance medical care, and upgrade living conditions for residents. The Attorney General’s Office will oversee the allocation of these funds to ensure compliance and transparency.
Attorney General James issued a scathing statement regarding the misconduct, saying, “Centers’ owners operated the nursing homes with insufficient staffing so that they could pocket tens of millions of taxpayer dollars meant for resident care. Now, Centers and its owners will pay for the harm they caused and will continue to make major reforms at their facilities to ensure residents receive the care they deserve.”
“While no amount of money can undo the harm that was done, this settlement will help address the serious failings at these facilities and improve conditions for current and future residents,” James added, according to The New York Post report.
The settlement not only requires the creation of a $35 million fund for resident care but also mandates $8.75 million in restitution to Medicare and Medicaid. To ensure compliance and accountability, an “Independent Health Care” authority and a financial monitor will oversee both patient care and financial operations at Centers’ facilities for the next two years, the report in the New York Post said. These independent monitors were first installed in 2023 as part of a court order stemming from the initial litigation.
A spokesperson for Centers, Maryellen Mooney, expressed satisfaction with the resolution of the litigation, stating, “We are pleased to resolve our litigation, which dismisses all allegations of wrongdoing against Centers.” Mooney further claimed that the company has upheld “the highest standards of care and resident welfare” and remains committed to implementing the reforms agreed upon under the settlement. The New York Post report noted, however, that the allegations paint a starkly different picture of the conditions at the facilities, with accusations of widespread neglect and financial fraud.
The original lawsuit detailed shocking neglect at the facilities, alleging chronic understaffing and mismanagement that left residents in inhumane conditions. Patients were reportedly forced to endure prolonged periods in soiled bedding, and inadequate medical attention led to untreated wounds, brain injuries, and, in some cases, death, as described in The New York Post report. The lawsuit specifically highlighted an instance where a resident developed severe, ulcerous bed sores that ultimately led to fatal sepsis.
As detailed by The New York Post, these conditions were tied to financial practices designed to maximize the owners’ profits. Rozenberg and Hagler were accused of inflating costs by self-dealing, including charging exorbitant rental fees and funneling money to shell companies under their control. These actions allegedly allowed the pair to siphon tens of millions of taxpayer dollars intended for the care of vulnerable seniors.
The Attorney General’s actions against Centers for Care are part of a broader initiative to hold nursing home operators accountable for misconduct. Recent lawsuits and settlements have targeted similar practices at other facilities across New York. As an example, The New York Post report cited a recent $8.6 million settlement addressed allegations of neglect at a Long Island nursing home, while another lawsuit accused the operators of the Village of Orleans Health and Rehabilitation Center in Albion of misappropriating $18 million and subjecting residents to inhumane living conditions.
Attorney General James emphasized the importance of these efforts, stating that the reforms and financial penalties imposed on Centers for Care reflect a commitment to ensuring that seniors receive the care and dignity they deserve.
As part of the settlement, the funds earmarked for resident care and restitution, combined with ongoing oversight, aim to repair years of damage and neglect. With the involvement of independent monitors, the state hopes to prevent further misconduct and set a precedent for accountability in the eldercare industry.
While the settlement resolves litigation against Centers for Care, it calls attention to the urgent need for systemic reform in nursing home operations. The New York Post’s coverage highlighted the critical role of oversight in ensuring that taxpayer dollars are used for their intended purpose — to provide compassionate and competent care for vulnerable populations. By requiring significant financial restitution and imposing independent oversight, the settlement aims to improve the lives of current and future residents at Centers’ facilities and beyond.
As the nursing home industry faces increased scrutiny, cases like this serve as a stark reminder of the consequences of prioritizing profit over patient care. The settlement marks a significant step toward accountability and justice for those who suffered under the neglectful practices detailed in the Attorney General’s lawsuit.
