NY nursing home execs settle for $45M after stealing nearly twice as much through patient neglect, wretched conditions: AG

Warning: Distressing Content

Executives at a series of New York nursing homes accused of an $83 million scheme to fleece Medicare, Medicaid and the seniors in their care have agreed to a settlement with state Attorney General Letitia James, her office announced.

The co-owners of Centers for Care, Kenneth Rozenberg and Daryl Hagler, will be on the hook for a total of $45 million, $35 million of which will be secured in a special fund to directly pay for “improved resident care and staffing,” James said on Thursday.

“Residents at these Centers nursing homes endured years of tragic and devastating mistreatment and neglect, while the owners made millions of dollars in profit,” James said.

The AG’s Office sued Centers in 2023, accusing the owners of skimping on staffing and forcing seniors to endure horrific conditions — leading to ghastly injuries — all so they could line their pockets with tens of millions in taxpayer dollars.

For roughly a decade, Rozenberg and Hagler ran the twisted and complex scheme to ensure that they got rich while seniors suffered, the suit claimed.

Numerous residents and family members claimed Centers’ facilities were so substandard that patients were left to lie in their own feces and urine for hours at a time. Theft and missing meals were also alleged to be rampant.

Chronic understaffing resulted in untreated wounds, brain bleeds and broken hips from falls — and sepsis that led to death in at least one instance, where a resident’s bed sores were allowed to become ulcerous due to severe neglect, James’ suit claimed.

The financial fraud scheme involved Rozenberg renting from Hagler, who charged exorbitant amounts, as well as pocketing inflated salaries and making payouts to fake companies owned by themselves and family members, according to the suit.

“Centers’ owners operated the nursing homes with insufficient staffing so that they could pocket tens of millions of taxpayer dollars meant for resident care,” she said. “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.”

The facilities in the initial lawsuit included the Beth Abraham Center for Rehabilitation and Nursing in the Bronx; the Buffalo Center for Rehabilitation and Nursing; Holliswood Center for Rehabilitation and Healthcare in Queens and Martine Center for Rehabilitation and Nursing in Westchester.

In addition to the $35 million resident care fund — plus $8.75 million paid as restitution to Medicare and Medicaid — an “Independent Health Care” authority and a financial monitor will oversee both the care of seniors as well as the financial transactions at Centers for the next two years.

Both independent monitors were installed in 2023 as part of a court order.

“We are pleased to resolve our litigation, which dismisses all allegations of wrongdoing against Centers,” said strategic communications executive Maryellen Mooney on behalf of Centers, who claims the company has maintained “the highest standards of care and resident welfare,” and reiterated the company’s commitment to implementing the court-agreed investment in care and resident welfare — which will be overseen by the independent monitor. 

The AG has filed other similar lawsuits against nursing homes, including a recent $8.6 million settlement on Long Island, and another that accused the owners of the Village of Orleans Health and Rehabilitation Center in Albion of stealing $18 million and leaving residents in inhumane conditions.